AicA | Alliance of Inter-Continental Accountants

Global member - Taiwan


Area : 36,000 square kilometers
Population : 23 million (July 2011 est.)
Language : Mandarin / Taiwanese / Hakka / Indigenous Languages
Religion : Buddhism / Taoism / Christianity / Islam

Taiwan, also known as Formosa, is the largest island of the Republic of China. The island group has been governed by the Republic of China (ROC) since 1945 when the ROC acquired Taiwan from Japan as a result of World War II. Japan had originally acquired Taiwan from the Qing Empire in 1895. Taiwan's rapid economic growth in the decades after World War II has transformed it into an advanced economy known as one of the Four Asian Tigers. This economic rise is known as the Taiwan Miracle. It is categorized as an advanced economy by the IMF and high-income economy by the World Bank. Technology industry plays a key role in the global economy. Taiwanese companies manufacture a large portion of the world's consumer electronics, although most of them are made in their factories in mainland China.

The location of Taiwan makes it a perfect place for international corporations to establish their headquarters in Asia Pacific region. As the hub that connects Europe, the United States, Japan and the emerging Asian markets, Taiwan is very crucial in terms of its high economic and strategic value. Taiwanese enterprises have been aspiring to integrate manufacturing and service industries. They have fostered a good collaborative relationship with some famous European and American enterprises. Taiwan now plays a central role in the supply chain of IT industry. It has also become the center for high-tech OEM/ODM as well as the center for product R&D and testing in the Chinese market. Since the cross-strait relations have normalized and trade between the two sides continues to grow, Taiwan is definitely the best choice for enterprises to enter into the Chinese market and to further expand their business in the world.

Operations Hub in Asia-Pacific

Taiwan is located at the heart of the Asia-Pacific region. The average flying time from Taiwan to the seven major cities in Western Pacific is merely 2 hours and 55 minutes. And the average sailing time from Taiwan's largest international harbor Kaohsiung harbor to the 5 major Asia-Pacific harbors (Hong Kong, Manila, Shanghai, Tokyo and Singapore) is merely 53 hours. After the opening of cross-strait direct links, Taipei has become the hub of the dual golden routes in Asia-Pacific. The routes from Taipei go north to Tokyo and Seoul, west to Shanghai, south to Hong Kong, Singapore and the capitals of the ASEAN countries. Taiwan's location is of economic and military importance. It is the gateway between Europe, America, Japan and the booming Asia-Pacific markets. It is also the first choice for multi-national company headquarters in the Asia-Pacific region.

Taiwan's ODM/OEM industry has played an important role in system product manufacturing since the 80s. It has good cooperation relationships with well-known European and American brands, and is also a key part in the international supply chain in the high-tech industry. Taiwan has quality human resources. Its employees have entrepreneurial spirits, and are capable and experienced with state-of-art corporate management. Taiwan's ODM/OEM manufacturers have played the roles of "Total Service/Solution Supplier" with strong design and manufacturing capabilities, flexibility and logistic capability. They are important partners of leading brand manufacturers and are influential in the global industry. Taiwan has been the OEM, ODM center of the world for high-tech products, especially in the IT and electronic product manufacturing. According to the statistics released by the Institute for Information Industry in 2008, Taiwan's products made up 85% and 80% for the installed Windows PC related products and network communication equipment in the global market respectively.

Taiwan is closely adjacent to mainland China's market. It has geographical and language advantages. At the same time, Taiwan has high acceptability towards new technologies. Hence, it is in a position to become the R&D and test centers for products aimed at the global ethic Chinese markets. Taiwan enterprises are not only the first-class suppliers of the world's leading companies, but also capable of developing subsystems. In addition, Taiwan businesses have close connections with international brands, which enable the establishment of strategic alliance for R&D and innovation. Furthermore, Taiwan businesses in mainland China enjoy the language and cultural advantages, which help multi-national companies, invest and set up production facilities in mainland China. Through the linkage with the international market, Taiwan industry has become the development test-bed for Asian market or the Greater China market that paves the way for entry to the emerging markets in East-Asia. Moreover, foreign companies can make use of Taiwan's strength as the "World's First Class" components supplier cluster to set up their R&D centers in Taiwan. Practically speaking, Taiwan can be a living laboratory for developing various innovative products and services with its population of 23 million people. Companies can integrate professional ICT and services knowledge, and make use of Taiwan's advantages to test new innovations locally and copy successful experiences abroad. Taiwan can be a development base for various products and services and a marketing base for expanding business in ethnic Chinese market.

Taiwan and mainland China have signed 6 agreements since the cross-strait contact channels were reestablished in May 2008. Besides, to reduce tariffs and commercial barriers between the two sides, the governments of the People's Republic of China (mainland China) and the Republic of China (Taiwan) signed The Economic Cooperation Framework Agreement (abbreviated ECFA) on June 29, 2010, which was seen as the most significant agreement. It will boost the current US$110 billion bilateral trade between both sides. The cross-strait negotiations have stepped into a normal phase, which help Taiwan continue its role as a testing stone for global multi-national companies to enter Chinese market and also help local companies deploy their business globally.

Intellectual advantage

According to WEF's "World Competitiveness Report" published on April 13, 2011, Taiwan ranks number 6 in the world because of abundant R&D talents. According to the "Science and Technology Development Survey" conducted by the National Science Council, the number of researchers for every thousand employees in Taiwan has grown stably, which are higher than the US. In addition, the number of researchers for every thousand employees in Taiwan is 10.6 person-year behind only Finland and the same with Japan, slightly higher than 9.6 person-year in the United State. Moreover, the research workforce has grown conspicuously in recent years. The average growth rate was 8.3% between 2008 and 2010.

Taiwan also has advantage on higher educated workforce. 43.7% of the workforce with college, university or higher education background. According to the statistics released by the Directorate- General of Budget, Accounting and Statistics in 2010, college and higher educated population accounted for 37.4% of the population at age above 15 years old. Taiwan has a workforce of about 10 million people, accounting for about 48.07%of the total population. Every year, 320 thousand students are graduated from college, university or higher education, which make sufficient workforce supply to the industry. Taiwan ranked 15th and 9th in the world for the number of papers published in the SCI and the EI Journals. The number of papers published in the EI Journal increased to 17,648 in 2010 from 16,657 in 2007, with an annual growth rate of 7.8%. According to the 2009 report released by the Higher Education Evaluation and Accreditation Council of Taiwan based on the statistics from the Essential Science Indicators (ESI), 39 universities are among the world top 1% in terms of the number of papers published and count of citations, an increase of 8 universities compared to 2009. The National Taiwan University performs the best among the universities in Taiwan, Hong Kong and China.

The government continues to promote international technology cooperation and encourage visits and exchanges between science researchers in the academia, co-holding of academic seminars and cooperation for research projects. The government has set up overseas science and technology divisions to cultivate science and technology professionals' international views.

Sound Legal Framework

Taiwan's level of protection for foreign investment is very high. The people in Taiwan have matured legally. The protections for foreign investment are clearly stipulated in the foreign investment regulations. As legal education is promoted, the people and enterprises in Taiwan have good legal concepts. The predictability and stability of their actions have increased. The society is in good order and investment environment is secure. Almost all of the accounting systems in Taiwan conform to international standards. The deregulation for cross-strait policies further puts Taiwan in a more advantageous position than Hong Kong and Macao for investment.

The government has regarded the protection of intellectual property rights a very important issue. To create a better system and environment for IP protection, the government has actively made policies and taken measures to protect inventions and the authors' efforts to encourage innovative inventions. A dedicated court and a policeman team are established to protect IP rights, and related laws and regulations are also passed. These actions have won international community's recognition. In 2009, Taiwan is removed from the US government's 301 watch list, which is recognition of Taiwan's progression and enforcement in IP protection.