New Investment Advantages in Taiwan

2011 IBM Corporation

April, 2013

New Investment Advantages in Taiwan

Taipei Representative Office in Singapore

MOEA

MOEA

Outline

Taiwan at a Glance

Top 10 Reasons to Invest

in Taiwan

Investment Opportunities

Page 2

MOEA

Taiwan at a Glance

Size 36,190 Square kilometers

Population 23 million

Economic Growth 4.03% (2011)

1.25% (2012)

Per Capita Income US$20,374 (2012)

Unemployment Rate 4.39% (2011) 4.18% (2012)

Foreign Trade

(2012)

Total: US$ 571.82 Billion (-3.03%)

Exports: US$ 301.10 Billion (- 2.32%)

Imports: US$ 270.72 Billion (- 3.81%)

18th largest trading economy in the world

Page 3

MOEA

Top 10 Reasons to Invest

in Taiwan

Page 4

MOEA

2012 Investment Environment

Rating:

4th

in the world

2nd

in Asia

Business Environment Risk

Intelligence

2012 Index Rankings:

7th in the world

3rd in Asia

IMD World Competitiveness Ranking

Global Competitiveness

Index (2011-2012):

13th in the world

4th in Asia

World Economic Forum

Top 10 Reasons to Invest in Taiwan

1. Investment Environment and Global Competitiveness

Page 5

MOEA

18 agreements, including the ECFA and Intellectual

Property Rights Agreement, were signed between Taiwan

and China over the past 2 years

Economic Cooperation Framework Agreement (ECFA) was

signed on June 29th and took effect on September 12th,

2010

The signing of ECFA clearly shows the willingness of the

two sides to further improve bilateral trade and investment

relations, which is beneficial for economic prosperity and

development across the Strait


2. Gateway to China After Signing ECFA (1/2)

Page 6

MOEA


2. Gateway to China After Signing ECFA (2/2)

Page 7

Expected to establish 15 large-scale stores in Taiwan; Signed contract with the Taichung City Government to set up operational headquarters in Taichung.

First flagship store opened in Taichung Eighth-period Redevelopment Zone in 2012.

Decathlon (France)

Already has eight branches in Taiwan; 3 out of 8 are within top 10 in the world. the Neihu store is the 3rd most profitable in the world.

5-6 new branches are planned to open in northern Taiwan (Sanchong, Xindian, Xinzhuang) and central Taiwan.

Costco (USA)

Pingtung Agricultural Biotechnology Park Branch upgraded into a subsidiary, Compass Biotech Co., Ltd.

Current annual output of 1,120 tons; second factory being built an annual output of 2,100 tons. The company produces cultivated edible mushrooms for the Taiwan and Mainland China markets.

Currently investing in Taiwan to build Mirasol Display (reflective display technology) factory for mass production.

Mirasol Display is an emerging display technology, with bistable e-paper features, ability to be clearly seen in sunlight, and energy saving benefits.

Expected to begin production at end of 2012 with a first- phase investment of US$1bn.

Houston (Japan)

Increasing Taiwan investment due to optimism about Taiwan's consumer market

Qualcomm (USA)

Using Taiwan's location and industry clusters to develop the Asian market

MOEA

Business Income Tax 25%

17%

Income Tax Act revised on May 28,

2010.

Company tax burden reduced with

business income tax cut from 25% to

17%.

The reduced rate is more favorable

than China (25%) and Korea (22%).

Item Taiwan China Singapore South Korea

Corporate

Income Tax 17% 25% 17%

22%

(201220%)

Value-added

Business Tax 5% 17% 7% 10%

Tax Incentive

Policy

R&D

investment

High- and

new-tech

enterprises,

R&D

investment

Emerging

industries operations,

R&D

investment

Foreign

investment,

R&D investment


3. Tax Environment and International Competitiveness

Page 8

MOEA

Awards won by Taiwan in Top International Design Competitions, Including 52 Gold Awards

Year

Award 2005 2006 2007 2008 2009 2010 2011 2012 Total

IF, Germany

(Called the

Design Oscar)

37

(1 gold )

72 (3 gold)

56

(1 gold)

99 (2 gold)

66

(1gold)

105

(5 gold) 116

109

(16 gold)

679

Red dot, Germany

design award 20

(1 first)

37

(2 first) 45

66

(5 first)

71

(5first)

101

(3 first)

136 (3 1st )

41 (3 1st)

519

IDEA, U.S.

(industrial design award)

5 (2 silver,

3 bronze)

1 (1 gold)

4 5

(2 silver, 3 bronze)

2

6

(4 silver,2 bronze)

5

(2G /1S/2B)

5 (2S/1B)

34

G-Mark, Japan

product design award

38 38 28 31 21 48 26 - 277

Total 100 148 133 201 160 260 283 155 1509

Source: Industrial Development Bureau, Ministry of Economic Affairs


4. Strong Design Capability

Page 9

MOEA

150 local R&D centers 54 international R&D centers (2012)

North: 106

Center: 15

South: 29


5. Innovation in Taiwan

Page 10

MOEA

Culture

Traditional

culture

Infinite

choices of

cuisine

Food

Daily Life

Convenience store

on every corner

Shopping

Xinyi shopping

area

Medical Service

Providing the best

medical treatment in

the world

Transportation

HSR

MRT


6. Pleasant Living Environment

Page 11

MOEA

Beijing

Shanghai

Seoul

Tokyo

Hong Kong

3:30

1:40

3:00

2:20

1:40

Taiwan offers the shortest

average flying time to major

Cities in Northeast Asia :

2 hours and 26 minutes

Direct air and sea links with China: Direct flight destinations: 41 Direct flights: 558/week Cargo charter flights: 48/week Sea transport: 12 harbors in Taiwan,

70 harbors in China


7. Hub of Northeast Asia

MOEA

Nankang Software Park

IC design Digital Content Biotechnology Foreign investment 30%

(IBM, Siemens, Philipsetc.)

Hsinchu Science Park IC manufacturing Optoelectronics Biotechnology

Central Taiwan Science Park,

Taichung Precision Park

Semiconductors, optoelectronics Biotechnology Precision Machinery

Changhua Coastal

Industrial Park

Metal products, metal surface treatment

Recycling, green energy

Tainan Technology, Liouying, Yongkang

Technology Industrial Parks

Optoelectronics Environmental technology Automobile parts Precision machinery

Kaohsiung Linhai, Da-Fa and

software industrial parks

Petrochemicals, iron and steel industry Metal processing, precision machinery IC, optoelectronics, communications,

environmentail technology


8. Well-Developed Industry Clusters

Page 13

MOEA


9. Skilled Workforce

43.32% of the workforce with college, university, or higher education background.

Every year, 320,000 students are graduated from college, university, or higher

education, supplying an abundant workforce for industry.

Lower labor wages than Hong Kong, Macau, Japan, Korea, and Singapore. Workers are highly motivated and productive.

Page 14

MOEA

Extensive

Infrastructure

Highly-developed sea, air, and

land transportation

Well-developed ICT facilities

Comprehensive industrial

land zoning

Convenient freight and

logistics

Fully integrated transportation network

High-speed rail enables same-day travel between

Taipei and Kaohsiung.

Over 10,000 domestic/overseas

sea/air/land freight and

warehousing companies

form a comprehensive and

efficient transportation

network.

Taiwan has a well-developed ICT infrastructure with

97.56% penetration for fixed

line, 76% penetration for

household Internet use, and

92.5% penetration for mobile

phones.

There are currently 181 industrial zones, 3

science parks, 10

export processing

zones, and 5 free trade

zones.

International logistics companies based out of key

Taiwanese and foreign cities

effectively reduce

import/export/transshipment

times for cargo, enabling rapid

flow of goods and information.

Comprehensive legal system and

IP protection

Taiwan has a comprehensive legal system and IP

protection legislation is

backed by an IP court.

Source: MOEA Department of Investment Services, compiled by ITRI IEK (2010/10)


10. Extensive Infrastructure

Page 15

MOEA

Investment Opportunites

in Taiwan

MOEA

6 Emerging Industries

Six Emerging

Industries

High-end

Agriculture

Culture &

Creation

Healthcare

Green

Energy

Tourism

Biotech

Government Investment:

2.9 Billion USD


0.6 Billion USD

Private Investment:

0.2Billion USD


0.8 Billion USD


2 Billion USD

Private Investment:

1.6 Billion USD annually


1 Billion USD

Private Investment:

6.6 Billion USD


0.83 Billion USD

Trigger Private Investment:

6.6 Billion USD

MOEA

Investment Opportunities in Six Major Emerging

Industries

Industry Est. Production Value Investment Opportunities

Biotechnology US$9 billion (2012) Development of new drugs, biopharmaceutical manufacturing,

medical equipment, lab testing, agricultural biotechnology, health

foods, biotech services

Tourism US$19 billion (2012) Promotion of themed tours, development of Taiwanese leisure

and recreation, bringing in international hotel chains, nurturing

Taiwanese tourist hotels, developing the MICE industry, medical

tourism, and cultural exhibitions and performances

Green energy US$400 billion (2012) Solar cells, LED lighting, wind power, biofuels, hydrogen fuel

cells, energy information communication technology (EICT),

electric vehicles

Health care US$12 billion (2012) Medical care, long-term care, wellness and health maintenance,

intelligent medical care services, cross-border medical care

services, national health security

High-end

agriculture

US$5.5 billion(2012) Organic agriculture, agricultural biotechnology, orchids,

groupers, ornamental fish, plant nurseries, livestock and poultry

breeding, in-depth agricultural tourism, high-end agricultural

products

Cultural and

creative industries

US$24.5 billion (2013) The six flagships: television, cinema, popular music, digital content, design, handicrafts

MOEA

4 Emerging Smart Industries

Four Emerging

Smart Industries

Cloud

Computing

Industrial

Application of

Invention

Patents

Smart

Green

Buildings

Intelligent

Electric

Vehicles (Evs)


0.4 Billion USD


0.67 Billion USD

Est. Output (2016)

60,000 Vehicles

Est. Output (2020)

1,200,000 Vehicles

( 1 M. for export)


0.8 Billion USD


3.3 Billion USD


0.11 Billion USD


0.95 Billion USD

MOEA

Ten Key Service Industries Sectors Vision Target (2013)

Gourmet Taiwan

Bring international cusine to Taiwan

Promote Taiwanese cuisine internationally

Promote US$0.07 billion in private investment

Add 3,500 outlets in Taiwan and abroad

International Medical Tourism

Achieve inbound clients and outbound medical services

Raise medical quality and improve Taiwan's image as a provider of quality medical services

Attract US$0.14 billion in private sector investment.

Create international medical industry worth US$0.37 billion

Music and Digital Content

Raise the production and distribution of Taiwanese pop music

Promote Taiwan as an advanced country with creative music and multimedia industries

Pop music industry production targets (2010-2014):

Combined production value for the five year period reaching US$1.67billion

Attract US$5.83 million in private sector investment

Digital content (Targets):

Industry production value of US$26 billion

Increased investment of up US$3.3 billion

Chinese language electronic commerce

Promote Taiwan as a secure, sophisticated and dynamic location for Chinese-language e-commerce operations centers catering to international businesses

2015 targets:

Increase revenues to US$33.3 brillion

Have at least eight Chinese-language e-commerce

businesses with annual revenues exceeding US$0.33 billion

Global Logistics

Establish Taiwan as a hub for value-added logistics and supply-chain integration

Initiate US$0.097billion in private sector investment

Logistics industry achieves a scale of US$0.33

billion

MOEA

Ten Key Service Industries (cont.) Sectors Vision Target (2013)

MICE Establish Taiwan as Asias top MICE location

Target (2012)

Bring in US$0.43 billion in investment

Achieve direct and peripheral benefits worth US$8.3 billion

Urban renewal Speed up the promotion of urban

renewal and create an urban

renewal industry

2011-2014 Targets:

Building construction investment totaling US$7.5 billion

Creating economic production value of US$38.1 billion

WiMAX Making Taiwan a global wireless

broadband service demonstration

island and solution exporter

Stimulating US$1.67 billion in private investment

Increasing the value of WiMAX equipment output to US$4.3 billion

Export of higher

education

Strengthening Taiwans higher education brand and attracting

larger numbers of high-caliber

foreign students

Overseas student in Taiwan for continuing or advanced study:

95,000 students by 2015, or 7.48% of the total college and university student population

150,000 students by --2020, or 10% of the total university and college student population

Fund-raising

platforms for

high-tech and

innovative

industries

Attracting overseas high-tech and

innovative companies seeking to

list on Taiwans stock exchange or over-the counter; establishment

regional fund-raising platforms

tailored to specific industries

Increasing the number of new listed companies to 330, out of which 194 will be in technology and innovative industries

The market capitalization of listed high-tech and innovative firms will increase to US$560 billion

Increasing fund-raising in Taiwan several fold to US$8.9 billion

MOEA

Thank You for Your Attention

Page 22

Contact us

TEL: (65) 6500-0120

FAX: (65) 6271-9885

E-mail : [email protected]

Address: 460 Alexandra Road #23-00

PSA Building, Singapore

119963

Web: www.roc-taiwan.org/SG/

Taipei Representative Office in Singapore

Documents

New Investment Advantages in Taiwan