Incentives

Question 1: What incentives does the ROC offer to those foreign companies coming to ROC to invest in technology research and development?

Answer:

Foreign companies when coming to invest in Taiwan may apply, according to the regulations, to the Ministry with proposals for R&D funding.

The Ministry's Industrial Technology Task Force is set up to encourage businesses to conduct business innovation, applied research, strengthening business R&D capabilities and mechanisms as well as promoting the development of the knowledge service sector. The Ministry also, from time to time, updates its various funding plans based on the changes among domestic companies.

For further explanation, please visit the Multinational Innovative R&D Centers in Taiwan Program, also more information and various application forms (mostly Chinese).

Question 2: What kind of financial funding services does the ROC provide to foreign firms?

Answer:

To help businesses gain easy access to capital, the Executive Yuan has proposed several projects to provide low-interest loans such as Purchase of Automatic Machinery, Loans to Help Upgrade Small-and-Medium-Sized Enterprises, Loans to Help Anti-Pollution Machinery for Local Businesses, and Loans to Help Promote Traditional Sectors. All companies interested in these loans should consult local or private banks. Loan interest rates will remain within the Chunghwa Post Office's public rates for two-year fixed deposits of 2.175-2.45%.

In order to encourage companies to upgrade technology service capabilities or engage in R&D, and to raise the added value of products or services, the Executive Yuan Development Fund is providing low-interest loans for manufacturing, Internet, and technology service companies engaging in R&D or investment projects. Loans rates are range between 1.5-2.5% (which includes yearly loan interest paid to the Development Fund and bank guarantor fees at 0.5-1.5%); if a Small-to-Medium Sized Enterprise is needed as a guarantor, then an additional processing fee is charged at 0.75% of the loan amount.

For more information, please refer to the website of the Executive Yuan Development Fund.

The government has also set up the Mid to Long Term Loan Program using the government's new postal savings account. Any private investment worth over NT$100 million can apply to its Competent Authority to submit a loan proposal to the Executive Yuan's Council of Economic Planning and Development. Other loan rates are mid-to long term fund use interest rates (currently 1.83%) including the banks raising quotas (limited to 2%)

For more information, please refer to the website of the Council for Economic Planning and Development.

Question 3: What incentives does the government provide for foreign companies setting up their regional operational headquarters in Taiwan?

Answer:

All companies which have been established in accordance with the ROC Company Law, comply with operations headquarters requirements, and hold an 'Operations Headquarters Certificate' issued by the Industrial Development Bureau are entitled to the following incentives if they establish their regional operational headquarters in the ROC.

The following types of income are exempt for those foreign companies with their regional headquarters in the ROC:

• Income that a regional headquarters generates from its management services and R&D services provided to its overseas affiliates.
• Commission income earned by regional headquarters from its overseas affiliates.
• Investment income and gain from the disposal of investment via its investment in its overseas affiliates.

Incentives for the acquisition of land by a company's regional headquarters:

• Restrictions are being relaxed for land use devised for industrial zones and regional operation centers so as to provide them with convenience when setting up their operations headquarters.
• Restrictions are being relaxed with regards to the use of urban industrial zones and making them fit for operations headquarters so as to convenience those companies setting up their headquarters.
• Businesses will be allowed, under special projects, to re-allot the land adjacent to non-urban areas and urban areas, and will be allowed to use the existing neighboring land for their operations headquarters.
• Prices will be adjusted for areas within operations headquarters so as to lower the cost of setting up an international or regional headquarters.

Incentive Measures for Operations Headquarters Personnel

• Companies may now hire foreign nationals with a bachelor's degree or above to engage in professional or technical work. Foreign nationals working at an operations headquarters are not subject to requirements that stipulate previous work experience as a prerequisite for employment.
• Companies may apply to bring mainland Chinese personnel to Taiwan for related business and trade activities.

For more information please refer to Industrial Development Bureau's website and the descriptions on Incentives in the Enterprise Operational Headquarter section on the website of the Industries Assistance Center.

Question 4: What are the incentives for foreign nationals to invest in logistics centers in Taiwan?

Answer:

In order to promote the development of high-tech and emerging industries, to build a fine domestic investment environment, and nurture a strong and competitive domestic investment environment, the government is providing the following incentives so as to encourage investment in the sector with the hope of facilitating the smooth development of the domestic logistics sector industry.

• Incentives for Private Participation in Infrastructure Projects

  Logistics centers that comply with Article 3 of the Law for Promotion of Private Participation in Infrastructure Projects and Article 17 of the Enforcement Rules of the same law can receive government assistance in obtaining land or arranging for changes in land use; projects that fall within the scope of major infrastructure projects can also receive financing and credit incentives, 5 year exemption on profit-seeking enterprise tax, reductions on profit-seeking enterprise tax for investment expenditures, reduced customs tariffs on imported machinery and equipment, and reductions on land taxes, housing taxes, contract taxes, and payable income taxes for investment shares in profit-seeking enterprises.

• Preferential Loans for the Logistics Industry

  Preferential loans for the wholesale, retail and logistics companies include funds for land purchases, buildings, transportation vehicles or machinery and equipment; needed funds for building an information technology infrastructure; intellectual property such as trademarks, corporate secrets, copyrights, patent and technical skills); and necessary operating funds. Each company applying for loans is limited to NTD 100 million.

Please check the Regulations for Encouraging Foreign Profit-Seeking Enterprises to Establish International Logistic and Distribution Center in Taiwan on the website of the Industrial Development Bureau for more information.

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