June 6, 2005
Business Environment Risk Intelligence (BERI) released their first Business Environment Risk Report for 2005, in which Taiwan tied with Norway for 5th place with a Profit Opportunity Recommendation score of 72. Taiwan's score and ranking remain the same from the last report, placing behind only Switzerland, Singapore, the Netherlands, and Japan in the global rankings.
Taiwan once again received a 1A rating in the report, indicating that it is a low-risk country suitable for investment. According to the report, BERI believes that the risk of a military threat from China is decreasing, with society showing signs of stability. The report also noted that investors continue to hold confidence in Taiwan, with Foreign Direct Investment expected to continue growing.
In the Asian region, Taiwan remained in 3rd place behind Singapore and Japan while ranking ahead of China, Malaysia, and South Korea.
BERI's Business Environment Risk Report contains three major ranking indicators to evaluate a country's business environment: the Operations Risk Index, Political Risk Index, and Remittance and Repatriation Factor Index. The report is seen by multinational companies as an indicator of profitability and investment risk in various countries.
Taiwan ranked 3rd globally in the Operations Risk Index, and 2nd amongst Asian nations, trailing behind Singapore and placing ahead of Japan and Malaysia. BERI believes that Taiwan's operations risk continues to stabilize; according to the American Legacy Foundation, Taiwan's economy is the 27th freest in the world and with continued reforms, its international image will improve.
Taiwan fell 2 places on the Political Risk Index to number 15, and its score dropped by one point. Amongst Asian nations, it ranked 3rd behind Singapore and Japan, while placing ahead of Malaysia and China. BERI predicts that Taiwan's Political Risk Index will eventually improve.
Taiwan retained the same ranking from the last report on the Remittance and Repatriation Factor Index, at 3rd place. In Asia, Taiwan tied with Singapore for 2nd place, behind only Japan and ahead of South Korea and China. BERI believes that Taiwan's remittance and repatriation risk is higher because of the large amount of current account surpluses and foreign exchange reserves; however, growing external debt from the private sector may present future problems.
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