New regulations to provide more incentives to enter Taiwan's Free Trade Zones

March 19, 2007

New regulations are being drafted to bring more businesses to Taiwan's free trade zones (FTZs), according to a recent announcement by the Council for Planning and Economic Development (CEPD).

The CEPD is currently working with the Ministry of Economic Affairs (MOEA) and the Ministry of Transportation and Communications (MOTC) to draft new regulations based on the Statute for Upgrading Industries that would provide incentives to target businesses, said said Ye Ming-feng, Vice Chairman of the CEPD.

The target businesses include international logistics companies, manufacturers, and technical service providers. The government is also considering conditional five-year tax incentives for businesses entering free trade zones, according to Ye.

The CEPD believes that the new regulations will bring considerable investment, employment opportunities, and transport-related business opportunities to the FTZs.

Ye also said that the government is considering a five-year tax exemption with conditions for businesses in FTZs, and a fair number of domestic companies have inquired about entering the zones.

The CEPD, MOEA, and MOTC have already decided to hold a series of meetings with domestic and foreign companies, and plan to invite 108 domestic companies and 230 foreign companies to enter the FTZs.

Ye said that the government will also be placing advertisements in international publications to raise the profile of Taiwan FTZs, while the MOEA will concentrate on creating a detailed plan for recruiting internationally renown companies. Meanwhile, the MOTC and the CEPD will organize and form overseas delegations as part of the investment recruitment effort.

According to CEPD statistics, as of the end of Jan. this year, there were a total of 93 companies operating in Taiwan's five FTZs, Kaohsiung Harbor, Taichung Harbor, Taipei Harbor, Keelung Harbor, and Taoyuan International Airport.

As of the end of 2006, a total of NTD 9.995 billion was invested in the FTZs, which employed 634 people and saw an import/export goods capacity of 736,880 tons. The FTZs handled over a total of NTD 15 billion in import/export volume. These figures show that although Taiwan's FTZs are maturing slowly, a trend is emerging where companies are seeking to enter the zones, said the CEPD.

The CEPD said that international logistics providers stand to benefit from Taiwan's FTZs. The council predicts that yearly business revenues could rise by 10% and with high value-added operations, the benefits of the global logistics services chain can be harnessed at the FTZs.

Multinational freight companies such as American President Lines (APL), Korea's Hyundai Merchant Marine Co., and Orient Overseas Container Line of Hong Kong have already started to establish operations at Taiwan's FTZs. APL's warehouse and storage capacity is already full after just a half year at one of Taiwan's FTZs.

With a favorable outlook for Taiwan's FTZs, future additions will include services to accommodate suppliers of clothing, chemical products, and electronics, said the CEPD.

(Central News Agency)

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