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The logistics industry includes transportation, warehousing, cargo handling, packaging, distribution, processing, information, and other fields. Cross-border logistics form the core of the development of global trade. The e-commerce industry value chain can be roughly divided into two sectors including support service activities and platform services. The international logistics and e-commerce industries have created immense business opportunities due to the restructuring of the global supply chain and the impact of the COVID-19 epidemic. Foreign companies can invest in Taiwan to manage global operations and develop business opportunities in the digital economy.

Advantages

  • Taiwan is a 1.5-to 5- hour flight from major cities in Asia

  • High degree of acceptiveness of local consumers to innovation and international content makes Taiwan an ideal site for pilot projects

  • A complete upstream-to-downstrem industry chain and talent to develop the echnology services industry

  • Taiwan has ranked 15th in Ease of Doing Business in 2020 among the 190 economies covered

  • A strong manufacturing newtwork favors the development of peripheral service industries

  • The COVID-19 epidemic has accelerated the rapid growth of global e-commerce and international logistics, and related industries in Taiwan have prospered. International e-commerce and logistics companies can invest in Taiwan, adjust and innovate their business models based on the unique characteristics of the industry and market, and use Taiwan as a stepping stone for entering other Asian markets.

  • As emerging service companies mostly focus on ICT and Internet applications, multinational e-commerce and logistics service providers can work with related industries in Taiwan. In addition to making use of Taiwan's ICT technologies and smart group operations, they can also use Taiwan as testing grounds for the development of e-commerce, new retail, FinTech, value-added data applications, electronic payment (including mobile payment) solutions, and other new forms of services to jointly pursue business opportunities in global markets.

  • The stay-at-home economy has expanded rapidly with the spread of the COVID-19 epidemic across the world. Fueled by the spread of epidemic, e-commerce operators focused on "zero contact" and maintained continuous growth. Even if the epidemic gradually draws to a close in the future, people are expected to have grown accustomed to the current consumption and lifestyle and the stay-at-home economy will continue to grow and expand. In addition, Taiwan's advantages in high market acceptability, high-quality Internet environment, smart logistics and warehousing, and active commitment to R&D will help foreign companies in market development and trials of new business models in Taiwan.

  • Taiwan's position as an Asia-Pacific hub, long-term support of free trade zone policies, the escalation of trade disputes between the United States and China, and the COVID-19 epidemic are favorable factors for foreign companies to set up global logistics or distribution centers in Taiwan. Foreign companies that only operate procurement, import, storage, or transportation services in free trade zones are exempted from the profit-seeking enterprise income tax for both domestic sales or exports. They can also make use of the taxation agreements signed by Taiwan with other countries for outsourced processing, testing, and other business models without any concerns about double taxation issues.

Focus of Policy

  • Free Trade Zones
    Taiwan has set up "free trade zones" at six seaports and one airport. Companies setting up operations in the free trade zones may engage in businesses such as trade, warehousing, logistics, container (cargo) terminal operations, transshipment, transit, freight forwarding, customs clearance services, assembly, sorting, packaging, repair, fabrication, processing, manufacturing, inspection, testing, display, and technical services.
    Free trade zones are subject to minimal regulation and granted a high degree of autonomy to allow for convenient movement of goods and people.
    The customs duties, commodity taxes, business taxes, trade promotion service fees, and port dues are exempted for goods, machinery, and equipment imported into a free trade zone from foreign countries. A zero tax rate for business tax applies to goods, machinery, equipment, or labor that are sold in domestic taxed areas or bonded areas zone, or are used for operations in free trade zones. In addition, profit-seeking enterprises which engage only in preparatory or auxiliary business activities within the territory of Taiwan and have applied for and obtained qualifications are exempted from paying the profit-seeking enterprise income tax for both domestic sales and exports of their products.

  • Promotion Plan for Strengthening Investment in Strategic Service Industries
    The National Development Fund (NDF) of the Executive Yuan allocated a budget of NT$10 billion for investment with its partner, a professional investment management company, to execute the Plan. The main investees include the information service industry, Chinese-language e-commerce, digital content, cloud computing, the convention and exhibition industry, smart retail, gourmet food internationalization, international logistics, healthcare, health promotion, design services, chain and franchise businesses, tourism and travel, energy service companies, and other "strategic service industries" identified by the program.
    The Plan provides information on strategic cooperation, technologies, and business opportunities for companies and it also offers customized and in-depth fundraising advisory services based on the unique characteristics of each company. It also refers companies to other advisory services or programs based on requirements to help companies increase investment performance and reduce investment barriers.

Tax Incentives

  • The profit-seeking enterprise income tax rate is 20%.
  • Up to 15% of the company's R&D expenditures may be deducted from its profit-seeking enterprise income tax for current year; or up to 10% of such expenditures may be credited over three years against the profit-seeking enterprise income tax payable by the company.
  • Royalty payments to foreign companies for imported new production technologies or products that use patents, copyrights, or other special rights owned by foreign companies is, with the approval of the Industrial Development Bureau, MOEA, exempt from the corporate income tax.
  • Imported machinery which local manufacturers cannot produce are eligible for duty-free treatment.
  • Investment in smart machinery/5G: For investments of no less than NT$1 million and no more than NT$1 billion, either "5% of investment spending deducted from profit-seeking enterprise income tax (current FY)" or "3% of investment spending deducted from profit-seeking enterprise income tax, if total spending spread over three years" may be selected, but the total amount deducted may not exceed 30% of corporate income tax that year. The applicable period is expected to be extended to December 31, 2024.
  • A company employee who has obtained stock compensation worth a combined total of less than NT$5 million and continuously held the stock while remaining in the company's employ for at least two years may choose to be taxed on the market price of the stock at either the time the stock was obtained or the time the stock is sold, whichever is lower.
  • Foreign special professionals who meet criteria are eligible for a 50% deduction of total income tax for amounts exceeding NT$3 million.
  • Companies that set up operations in export processing zones, science industrial parks, or free trade ports are eligible for exemptions on import duties, commodity tax, and business tax for the import of machinery and equipment, ingredients, fuel, materials, and semi-finished products for their own use.
  • Companies that use undistributed earnings to engage in substantive investments may exclude the amount when calculating their profit-seeking enterprise income tax.

Research and Development Subsidies

 

成功案例

Success Stories

Logistics and Transportation Services
  • The German company DHL established a service center in Taoyuan in 2019. The service center will be used to strengthen the connection between its operations in Taiwan and the supply chains of the Group in more than 220 countries/regions. The American company UPS expanded its investments in Taiwan and inaugurated a logistics center in February 2020. The logistics center will boost the Group's smart logistics network and strengthen the links and competitiveness of customers and the Company's supply chain.
E-commerce Services
  • Japan's largest e-commerce platform, Rakuten Group, established Taiwan Rakuten Ichiba, Inc. in Taiwan in 2008. This represented Rakuten's first step in its expansion into overseas markets. Due to the impact of the pandemic, many brick-and-mortar stores have sought to shift their operations to e-commerce. Taiwan Rakuten formed the "E-commerce Advisory Team" to provide online instructions and other resources to help businesses make the digital transition.
  • SGH Global Japan of SGHoldings Group and the e-commerce operator PChome signed a Memorandum of Understanding (MOU) in February 2021 to jointly launch one-stop cross-border e-commerce services. Japanese company ITOCHU Corporation announced an increase of its equity stake in Taiwan Pelican Express in March 2021 to expand the scale of e-commerce operations in Taiwan. It also invested in the deferred payment service "Paidy" and established Tri-Link Asia Inc.
 

Source: InvesTaiwan

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Key Innovative Industries in Taiwan - International Logistics and E-commerce (9.81MB)

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