2023: Doing Business in Taiwan
Part 1: Doing Business in Taiwan
What is the current business climate in your jurisdiction, including major political, economic, and/or legal activities on the horizon in your country that could have a big impact on businesses?
Although the outbreak of COVID-19 has had considerable impacts on most people in Taiwan and on local industries, the overall business environment in Taiwan remains transparent and sound.
Taiwan is one of Asia's major exporters of technology goods. With COVID-19 accelerating shifts in global supply chains, Taiwan and the US have engaged in cooperation under the auspices of the new Economic Prosperity Partnership Dialogue launched in November 2020. Both sides recognize semiconductors as the top mutual priority in supply chain cooperation, in addition to other areas including, healthcare, renewable energy, 5G, and telecommunications.
Taiwan was one of the few economies in the world to register positive growth in 2020. Real GDP expanded by 2.98%, boosted by strong export performance, and the official growth forecast for 2021 is 5.4%. Taiwan’s business environment is expected to continue to score highly in several rankings.
From what countries do you see the most inbound investment? What about outbound?
Inbound investment: Japan is one of the top investors in Taiwan, particularly in the manufacturing sector, wholesale and retail trade, financial services, and technical services. The US, Hong Kong, and Denmark are also top investors in Taiwan.
Outbound investment: Investment from Taiwan tends to go into the US, Southeast Asian Nations, Europe, and China.
In what industries/sectors are you seeing the most opportunity for foreign investment?
The Taiwan Government has been actively promoting the innovative industries, including semiconductors, biomedicines, smart machinery, green energy, and circular economy industries.
Apart from traditional sectors, such as manufacturing, we believe that the growth of investment in the semiconductor industry, solar photovoltaic systems, the offshore wind power industry, and IP will continue to create opportunities for foreign investment in Taiwan.
What advantages and pitfalls should others know about doing business in your country?
Taiwan’s Ministry of Economic Affairs ("MOEA”) announced on December 30, 2020 a tightening of the regulations for investments from China, due to national security concerns, following in the steps of several countries around the world. The MOEA also strengthened its control over the sale or licensing of Taiwanese technology or IP to China, including via third countries, which will now be considered "technical cooperation", and which must be approved in advance.
Even so, Taiwan still has many attractive aspects for investors. With the exception of funds or capital sourced from China or investments in a relatively few industries regulated by the Government based on national security concerns, there are no restrictions against foreign investment in other industries in Taiwan, as long as said foreign investment can obtain approval from the relevant authorities.
In addition, Taiwan's exceptionally high degree of economic freedom is greatly recognized and appreciated internationally. According to the 2023 Index of Economic Freedom published by the Heritage Foundation, Taiwan is ranked 4th among the 184 economies of the world.
What is one cultural fact or custom about your country that others should know when doing business there?
Generally, Taiwanese are friendly and kind to their business partners. Most Taiwanese entrepreneurs place tremendous value on long-term relationships for business and other collaborations.
Part 2: About Your Firm
What distinguishes your firm from others in your market?
Formosa Transnational (FT) has long been recognized as one of the most prestigious law firms in Taiwan. For more than 45 years, FT has represented many multinational conglomerates in international and domestic legal matters and has earned a strong reputation for excellence. FT has the strongest alumni network in Taiwan. From leaders of judicial reform and scholars to heads of government, the legal community is strongly connected through FT. In particular, several of FT's Founding Partners, Partners, and senior attorneys, after leaving FT, have served or are serving in such capacities as Grand Justices of Taiwan's Constitutional Court and many other high-ranking officers in different branches of the Taiwan Government. There are many outstanding law professors and in-house counsel who are also FT alumni. This thriving network of FT attorneys marks FT as a trustworthy and extremely competent firm positioned at the pinnacle of the legal community in Taiwan.
FT has three practice groups: 1) Litigation and Arbitration; 2) Transactions and Commercial Matters; and 3) IP and Technology. Each group is composed of competent and experienced attorneys and experts. Most FT attorneys have law degrees from universities in foreign countries, such as the US, Japan, and the UK. FT also has engineers who assist with patent prosecution and provide litigation support. The diverse educations and professional specialties of our attorneys and engineers afford our clients a dynamic specialization in the services we provide. With highly specialized attorneys and staff members, FT has always stood at the forefront of industry development, assisting companies, entrepreneurs, and organizations, whether domestic or foreign, to resolve the various problems that have arisen as a result of technological improvements and economic growth.
What are three words that describe the culture of your firm?
"Integrity, Diligence, and Gratitude"
How does your firm participate in Corporate Social Responsibility (CSR) and/or Environmental, Social, and Governance (ESG) initiatives?
As a first-tier law firm in Taiwan, FT has continuously endeavored to focus on and carry out our social responsibilities. FT has donated to and initiated the establishment of the "Formosa Transnational Legal Foundation" to encourage legal research and to improve Taiwan's legal system, such as by issuing the bi-monthly periodical "FT Law Review" in 1981. FT holds summer camps for children in rural areas. FT actively participates in the bar associations, judicial reform foundation/association, legal aid, and human-right protection associations. Also, FT provides pro bono legal services for the disadvantaged. FT has been counseling a social enterprise platform in Taiwan and also provided free legal consultation and services for start-ups. Since 2020, FT established an internal research group, focusing on issues related to corporate social responsibility. FT's management has also keenly explored possibilities that may help FT carry out its social responsibilities. This year (2023), FT has held and will continue to hold seminars, addressing the issues of corporate governance and corporate social responsibility.
Are there any new and exciting initiatives, practice areas, or industry focuses in your firm?
In recent years, FT has been active in the fields of proxy contests, environmental and energy law, entertainment law, trade secrets, privacy law, and digital platforms.
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