DOIS Promoting Multinational Investment in Taiwan Service Industries

July 6, 2006

According to statistics by the MOEA's Investment Commission, Foreign Direct Investment (FDI) this year from Jan. to the end of June totaled NTD 6.847 billion, an increase of 582.35% over the same period in 2005. The top three industries receiving investment are electronic components, financial and related services, and wholesale/retail.

Taiwan's service industry comprises 73.56% of Gross Domestic Product (GDP), but makes up only 64.65% of the overall economy. Service industry employees make up only 58.27% of the nation's overall workforce – a sign that there is ample room for the service industry to grow in Taiwan.

In order to effectively expand FDI in Taiwan's service industries, the Department of Investment Services (DOIS) has adopted the following measures:

1. Focusing on attracting foreign investment in "Strategic Service Industries":
The DOIS is establishing a 'cross-agency strategic service industry' contact window to keep abreast of the latest developments in the service industry and to mediate business opportunities for Taiwan and foreign companies.

2. Research cross-border merger and acquisition trends, and actively develop investment resources:
Mergers and acquisitions (M&A) among service industries are emerging as a prominent model for FDI worldwide. In order to effectively expand M&A investment among foreign nationals and overseas Chinese in Taiwan, the DOIS is researching financial services, telecommunications, and media industries. By examining past M&A models used by foreign companies, the DOIS will narrow its focus to particular companies and draft strategies for bringing these companies to Taiwan. Meanwhile, MOEA agencies aborad will actively campaign and promote Taiwan as an investment destination. For example, Standard Chartered Bank has been actively engaging in cross-border M&A as it establishes a presence in Asia (the bank recently performed a M&A with the First Bank of Korea). Such cases could encourage other companies to come to Taiwan for M&As with Taiwan financial companies and would in effect introduce advanced operating technologies, market distribution networks and new products to Taiwan, thereby raising the competitiveness of Taiwan's service industries and expand FDI.


3. Contacting and participating in groups and networks for cross-border M&A in the service industries:
The DOIS will establish contact channels, provide information, and act as a mediator in cross-border M&A among investment banks, consulting organizations, and law and accounting firms. The DOIS will also dedicate a portion of its website to providing M&A information, as well as links to other international M&A websites. In addition, the DOIS will introduce and promote the best of Taiwan's industry environment while providing suitable information on industry, laws and regulations, and mediation mechanisms for foreign companies to engage in M&A. In doing so, the DOIS hopes to help promote foreign investment in Taiwan through M&A while providing whatever assistance is necessary.

4.  Accompanying other agencies in bringing foreign investment to Taiwan:
From now on, the DOIS will accompany the Financial Supervisory Commission and the Public Construction Commission on overseas investment delegations. With the integration and division of tasks across government agencies, the DOIS hopes to effectively implement strategic action to bring foreign investment to Taiwan in the service industries.

5. Orienting goals towards service industry investment:
The DOIS is planning to hold the Taiwan Business Alliance Forum on Oct. 12, 2006. The event is aimed at the service and manufacturing industries, and in addition, discussion forums and 'mediated business opportunity meetings' will also facilitate business opportunities in the financial services and logistics industries. In addition, the DOIS is organizing an overseas investment delegation to promote Taiwan as an investment destination among service industry companies worldwide.

6. Strengthening the functions of MOEA offices abroad:
The DOIS is strengthening knowledge of service industries and cross border M&A among MOEA personnel abroad, and is directing its efforts at attracting investment from countries that show good development such as the US, the UK and Germany. MOEA offices abroad have been asked to invite service industry companies with potential to Taiwan to inspect and research the possibility of investment. Also, in order to provide a grasp of the latest trends and developments in the service industries of all countries, as well as information on cross-border M&A, the DOIS has already set a timetable for MOEA offices abroad to report relevant information as part of a general strategy for attracting foreign investment in the service industry.

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