Land and Industrial Zones

Question 1: What are the governing authorities for land and industrial zones?

Answer:

In Taiwan, industrial land is divided into three categories: urban development industrial zones, Type III land for construction purposes according to investment incentives, which is not included in non-urban land designated for the development of industrial zones, and those industrial zones which are earmarked under the Statutes for Upgrading Industries. The aforesaid urban development plan and non-urban lands designated as industrial zones fall under the jurisdiction of Construction and Planning Administration, Ministry of Interior, while the latter, as regulated under Item 4 of the Statutes for Upgrading Industries, fall under the jurisdiction of the MOEA at the central level, and city government's Bureau of Construction at the city level, and county and municipal governments at the county and municipal city areas.

Detailed information can be obtained from IDB wbesite.

Question 2: How is the development of industrial zones in Taiwan categorized?

Answer:

The supply of land for industrial purposes is divided into:

• Urban development industrial zones
• Type IV land for building purposes, which are not included in the non-urban land designated for the development of industrial zones
• Three industrial zones categorized under the Statutes for Investment Incentives and Statutes for Upgrading Industries.

The MOEA, based upon the Statutes for Investment Incentives or Statutes for Upgrading Industries has earmarked a total of 178 areas, with a total area size of 43,596 hectares, while there is a total of 57 industrial zones which have been planned and developed by the Ministry. Out of the 57, seven of them are developing industrial zones, which are the Li Tzu Industrial Zone, the Nan Kang Software Park, the Changhua Coastal Industrial Zone, the Yunlin Offshore Basic Industrial Area -- New Area, the Yunlin Science-based Industrial Park, the Tainan Science-based Industrial Park, and the Hoping Industrial Zone.

Detailed information can be obtained from Industrial Development Bureau's wbesite.

Question 3: What are the costs of water, electricity and land at Taiwan's industrial zones and science-based industrial parks?

Answer:

Water and Electricity

Industrial zones have already set up basic public infrastructure facilities for water, electricity and telecommunications. After hiring workers to build factories, a company can apply to the water, electricity, and telecommunications companies; fees and expenses will be calculated based on rates set up by the respective companies. Detailed information on rates can be obtained by clicking on the Related Content links on the right.

Industrial Zone Land and Construction Costs

The costs for industrial land, construction, or rental fees at the industrial zones at the Ministry of Economic Affairs' (MOEA) Industrial Development Bureau will be determined based upon the cost of development and will then be finalized by the Evaluation Committee for Construction and Industrial Land Costs. When buying property in the industrial zone, apart from paying for the land, the company should also pay fees to the Management Fund for the Development of the Industrial Zones (which is calculated as 1% of the purchase price). When applying to purchase or rent land or buildings within the industrial zone, the company should also pay 3% of either the annual rent or the selling price of the property as a security deposit. If the purchase or rental is approved, the guarantee fund will be calculated as part of the rent without interest, while the money will be returned -- interest-free -- if the purchase or rental proposal is rejected.

Detailed information can be obtained from IDB wbesite.

Question 4: How can foreign investors acquire land in Taiwan?

Answer:

The relevant laws governing the acquisition of land by foreign companies in Taiwan are stipulated in the Land Law and Procedures Governing the Acquisition of Land When Foreign Nationals Invest in Major Infrastructure Projects or Other Agricultural or Dairy Related Projects. The key points are summarized below.

1. The following types of investment projects are eligible to acquire land in Taiwan:

   1. Residential
   2. Business operations center, office, shop and factory
   3. Churches
   4. Hospitals
   5. International Schools
   6. Embassies/Foreign Missions and Charity Groups
   7. Cemeteries
   8. Projects which will help local infrastructure, the overall economy or the agricultural and dairy business, and those approved by the central competent Authority, include:
      • Major infrastructure projects which are approved by the central competent authority or accorded with the major infrastructure project status by the Executive Yuan in accordance with relevant laws.
      • Investment in the Overall Economy: Tourist hotels, tourist entertainment facilities, the development of sports stadiums, development of residential buildings; Development of industrial factories; industrial zones, commercial areas, high-technology industrial parks and the development of other specialized areas; Re-development of ocean land; public infrastructure projects; new cities and townships, the development of the new areas and urban renewal; investment areas announced by the central competent authority.
      • Investments in agriculture and farming intensive industries that conform with the Council of Agriculture's agricultural and capital standards and categories.

2. Restrictions on the acquisition of land

   The following types of land may not be transferred, may not create encumbrances, or may not be rented to foreign nationals: forest lands, fishing ponds, hunting areas, salt areas, mining areas, water source areas, and military zones or border areas.

3. Application Procedure

   Applicants should fill out their application form and prepare their application along with their related documents (see Section D). The application procedure is subject to city or county government approval for those land transfer issues which do not include land rezoning or land inheritance. If the investment area comes under Section A item 8, then applicants should, for land acquisition, first apply to the central competent authority while the city (municipal) and county governments should decide whether to accept or reject the application within 14 days; upon approval, all related documents should be sent to central and local government authorities for reference.

4. Related Documents

   • Identity card documents of the applicant. If the applicant is a foreign corporation, it should provide proof of identity recognized under ROC law.
   • Investment Plan. The investment plan should stipulate the name of the plan, the address of the land and other items required by the central competent authority.
   • Land Registration Documents and Land Graph Documents. For land designated for urban planning, the application must attach the Certificate Allowing Land Use for Urban Planning. With land for farming purposes, the application must attach the Certificate allowing Land Use for Agricultural Purposes or an equivalent certificate allowing land use for such purposes.
   • Certificates of Reciprocity and Equality verified by ROC missions, representatives, offices or other organizations authorized by the ROC Ministry of External Affairs abroad. Countries included on the list of countries with whom the ROC has signed land use reciprocity agreements are exempt from the above requirements.
   • Other Documents. Other documents provided for in applications filed earlier during evaluation are not required.

5. Additional Notes

   • The right to own land by foreign nationals will be determined by ROC law or are regulated in line with relevant treaties and also similar to the rights enjoyed by ROC citizens in that country.
   • The location of the area is under jurisdiction of the laws and regulations of the city or the local governments which govern the place.
   • Foreign nationals, when applying to acquire land under Article 1 of Item 8, should use it for the duration stipulated in the agreement and for purposes agreed upon in the agreement. If they are unable to use the land, for whatever reason, for the duration and for the purposes agreed upon, then they should apply, by clearly stating the reasons, to the central competent authority for a time extension. If they are still unable to utilize the land as agreed upon, then the city or county government shall notify the ownership of their intent to sell the land within three years after they receive the notification. If they are unable to sell it within the period, then the land will be auctioned and the proceeds given to the ownership. Any objects on the land, if they are any, will also be auctioned as part of the land.
   • Foreign nationals who purchase or rent land will enjoy the rights and shoulder the responsibilities stipulated under the laws after the registration process is completed.
   • For the land acquired, usage which may involve environmental assessment, maintenance of land and water, land utilization areas and land rezoning and the land development will all be processed according to the relevant laws and regulations.

Detailed information can be obtained from IDB wbesite.

Question 5: Are there any related tax incentives when renting or buying land or factories within industrial zones?

Answer:

When applying to rent or purchase land or buildings within industrial zones, investors should pay a security deposit amounting to 3% of either the annual rent or the selling price. When the rental or the sale project is approved, the security deposit fund will be withheld at a rate with no interest, from either the rent or the purchase price. If it is not approved, the money will be returned without interest. When making a purchase, the investor also pays a fee to the Industrial Zone development fund (which is 1% of the purchase price).

Refer to the Rents and Land Prices for more details on rent and land prices in industrial parks and zones.

Incentives for renting and purchasing land in industrial zones:

Sale Incentives

Tax Incentives

When applying to purchase land in industrial zones, buyers don't need to pay capital gains tax on land value appreciation or land taxes, and can also enjoy a preferential tax rate on industrial land.

Public Auction of Land

The selling prices of land in industrial zones will be determined, according to the cost of the development, by the Land and Building Price Evaluation Committee for Industrial Zones of the Industrial Development Bureau, MOEA. Prices will conform to the general market.

Installment Payments

When selling land or buildings, the authorized sales units or management organizations are required to set up installment payment methods and payment periods according to the actual situation.

Leasing Incentives

Rent Incentives

Under the current plan to expand upon rental incentive schemes in industrial zones, companies renting space in industrial zones are exempt from rental expenses for the first two years. In the third and fourth year of the lease, companies pay only 60%, while in the fifth and sixth year, they pay only 80%. When the company decides to purchase the building during the period of the lease, all the rent paid during the period will be deducted from the amount.

Renewal of the Lease

The term of the lease for a building or land in an industrial zone should not exceed 20 years. Tenants who follow the lease's stipulated agreements in good faith shall be given priority if they wish to renew their lease and therefore shall apply in writing to the authorities three months before the expiry of the original lease.

Deducting the Rent and Guarantee Deposit From the Selling Price

Tenants who have not violated any leasing agreements during the lease period and are interested in purchasing the rented land given the good operating conditions of the company should apply to purchase the land before the lease ends. On approval by the Competent Authority, the company's rent and guarantee deposit during the lease period will be deducted from the purchase price.

Detailed information can be obtained from IDB wbesite.

E-mail this page.