2024 Regional Roundtable Update: Taiwan
2024 Taiwan Regional Update
Firm Name: Formosa Transnational
Authors: Georgia Chang, Chung-Yun Lee, Han-wei Lin, Christina Tseng, Morher Wu
1. How is the political environment impacting business in or with your country?
After eight years in power, the Democratic Progressive Party (DPP) won the presidential election again in January of 2024. President-elect Lai Ching-te is a physician, while vice president-elect Hsiao Bi-khim is the former de facto Taiwan ambassador to the United States. Both hold advanced degrees from overseas. Their victory in the election symbolized the support of the Taiwanese people for current President Tsai Ing-wen's efforts to safeguard Taiwan's democracy and sovereignty. It also reflected expectations for a new era under a president with a medical background in contrast to the previous three presidents, who all held law degrees from National Taiwan University.
During the past eight years since President Tsai's election, official interactions between Taiwan and China have decreased while cooperation between Taiwan and USA, Japan, Europe, and Southeast Asian countries has strengthened. These trends are expected to continue under President Lai's administration. In particular, President Lai will continue Taiwan's New Southbound Policy to promote economic, trade, technological, and cultural ties between Taiwan and other countries in the region.
Taiwan's semiconductor industry is the jewel in its manufacturing crown. The world's largest chip maker, TSMC, known domestically as "the sacred protector of the country," is responsible for 55% of the world's chip supply and has expanded by building new production facilities in the US, Japan, and Germany. Its global expansion is expected to drive overseas
2. Which countries have you previously collaborated with and do you see potential for future collaboration with on cross-border matters within the region?
Our firm is celebrating our 50th anniversary this year. As a founding member of WLG, we have worked with almost all of the ARC members on investment, bank loans, real estate, management of multinational corporations, and dispute resolution. We have recently been instructed by or have instructed firms in South
Korea, Hong Kong, Japan, Malaysia, and Thailand. We also help Taiwanese enterprises apply for patent or trademark registration in Korea, India, Vietnam, USA, Canada, and the European Union. We are well-known in Taiwan for our work with Japanese clients and firms.
Following the expansion of TSMC abroad, we foresee that Taiwan's semiconductor supply chain will likely follow TSMC overseas. This is likely to generate new outward business for us. We expect to need to instruct regional firms on cross-border matters for our clients in the semiconductor supply chain. Their immediate needs will likely include real estate, joint venture, investment, and technology transfer services.
In addition to TSMC's new global role, Taiwanese businesses are continuing to shift from China to Vietnam, India, and other countries in Southeast Asia. Taiwan's relationship with India is just beginning and has enormous potential. We expect to work with firms there extensively in the future.
To mark our 50th anniversary, Formosa Transnational plans to hold seminars and issue publications regarding urban renewal and family offices to serve the changing needs of Taiwanese clients.
3. What legislation has recently changed or is changing that a potential international client should be aware of?
Taiwan's Gender Equality in Employment Act was amended in 2023, with some articles coming into effect on March 8, 2024. International clients should be aware that Employers hiring over 10 employees must establish a complaint channel (employers hiring over 30 employees are already required to establish a sexual harassment prevention policy). In certain circumstances, an employee may file a harassment complaint directly with the local regulator instead of the employer. These circumstances include: (i) the harasser is the person with the highest authority at the employer, (ii) the employer has not addressed the complaint, or (iii) when the complainant is dissatisfied with the employer's disposition of the complaint.
Taiwan plans to levy carbon fees from 2024 per its Climate Change Response Act (enacted in 2023). The regulator says that the businesses will be subject to carbon fees (probably USD10-17 per ton) if they emit more than 25,000 metric tons of carbon dioxide annually. The goal is to achieve the "net zero" in 2050. Integrated e-commerce platforms, third-party payment providers, information service providers, software publishers, and large-scale integrated retailers are now required to formulate plans for management, planning, and notification of data security incidents. The maximum penalty for non-compliance is USD 70,000.
According to Taiwan's Personal Data Protection Act, communications enterprises (since 2012), social work offices (since 2022), and human resource agencies (since 2023) are not allowed to personal information to China. Taiwan will establish a data protection authority in 2025.