Industrial Park Land Lease and Sale

Incentives for Industrial Park Land Lease and Sale

Rent and Land Purchase Incentives

In consideration of the fact that manufacturers earn no revenue during plant construction and start-up investment phases, the Industrial Development Bureau, MOEA, introduced enhanced lease and sales incentives for industrial park land, effective May 1, 2002, to encourage plant investment by manufacturers. The new measures exempt firms from land lease fees for the first two years, require payment of 60% of full lease fees during the third and fourth years, payment of 80% of full lease fees during the fifth and sixth years, and payment of full lease fees starting in the seventh year. If a company applies to purchase the land before the lease period expires, the firm's guarantee deposit and lease fees already paid during the lease period may be subtracted from the required price.

The response to these incentive measures has exceeded all expectations, after the entire NTD 45 billion originally allotted for the program had already been spent, companies continued to express their interest in the program. Thus, in order to bring about continued investment from industry, the MOEA increased the funds to NTD 60 billion in May 2004, added NTD 30 billion in December 2004, and approved an extension of preferential measures until December 31, 2006.

As of April 28, 2005, 637 companies were renting 375 hectares of land worth NTD 58.8 billion. The total investment amount is approximately NTD 245.2 billion, and has created NTD 364.3 billion in output value while providing 43,746 job opportunities.

Timeframe and Eligibility

• Period of Implementation: January 1, 2005 to December 31, 2006
• Lease Period: Under this incentives program, lessees renting land in industrial parks must do so for a minimum of six years, while lessees renting buildings in industrial parks must do so for a minimum of three years. The longest allowable rental period is 20 years.
• Eligibility: Corporations or government enterprises founded according to law may apply to rent land under the program.

Locations

These incentives apply to the following industrial parks under development by the MOEA:

• Northern Taiwan: Ilan-Litse, Wugu (standard factories), Nangang Software Development Park, Taoyuan-Chungli (land and standard factories)
• Central Taiwan: Taichung (standard factories), Changhua Coastal Industrial Park, Yunlin Technology Industrial Park, Touliu Expanded, Taichung Youth
• Southern Taiwan: Tainan Technology, Kaohsiung Linhai, Kaohsiung Tafa
• Eastern Taiwan: Hualien, Hoping

Lease and Sales Incentives at Various Industrial Parks

The following lease incentives are available at these industrial parks: Litse, Changhua Coastal, Yunlin Technology, Touliu Extended, Tainan Technology, Chungli, Taichung Youth, Kaohsiung Linhai, Kaohsiung Tafa, Kaohsiung Gangshan, and Hoping.

• 1st, 2nd years: exemption from lease fees
• 3rd, 4th years: lease fees set as 60% of full amount
• 5th, 6th years: lease fees set as 80% of full amount
• 7th year and after: full lease

Incentives for the Nankang Software Development Park, Wugu Standard Factories, and Taichung Technology include:

• 1st, 2nd years: lease fees set as 60% of full amount
• 3rd, 4th years: lease fees set as 80% of full amount
• 5th year and after: full lease

Standard plant at Jungli Industrial Park -- Annual rate of 4%

Information for Lessees on Purchasing Land

If a lessee applies to purchase industrial park land being rented during the renting period, all rental fees which have already been paid may be counted, interest free, towards the purchase of the land. However, lessees are limited to 70% of the total purchase cost when using rental fees towards purchase of the land (actual rate limit may vary according to publicly announced rents of each industrial park).

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