(Last updated: 9 Nov 2011)

Business opportunities

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

Business etiquette

Business tips

Business cards – exchanging business cards is very important in Taiwan, so you should have a large supply at all times as several hundred may be required for a short trip.

Correspondence – answer enquiries, proposals, correspondence and invitations as soon as possible, and at the very least, send an acknowledgment stating that an answer will follow shortly.

Punctuality – while traffic conditions in Taipei can cause delays, Taiwanese place importance on punctuality and you should avoid arriving late at appointments.

Gifts – the exchange of gifts is widely practiced in business in Taiwan and gift-giving usually occurs at the end of a meeting or during a meal in honour of your guests. Usually only small gifts are necessary but sometimes gifts offered by the Chinese are quite lavish – beware that a special favour may be expected in return.

Forms of address

Many Taiwanese have an English first name used with a Chinese family name, eg. Henry Wang – when this is the case, the family name is used last, as in Australia. Normally when a Chinese name is written, the family name comes first with the given name following, eg. Mr Tang Jie-Fu would be addressed as Mr Tang.

It is unusual for Taiwan companies to buy anything from someone that they do not know.

Business introductions are vital and ‘cold calling’ is not the appropriate way to start a business relationship in Taiwan.

The ‘classmate network’ is a recurring theme of business in Taiwan as the contacts developed at school or university carry over into later careers.

The quality of your agent or representative’s contacts will often be a more important selling point than the intrinsic marketability of your product.

It is vital to spend time in Taiwan with your representative to clearly explain the product, effectively negotiate terms of business and develop networks in the market.

While understanding Taiwan culture is important, do not lose sight of the Australian characteristics of doing business which differentiate you from other foreign competitors and your Taiwanese customers.

Focus on transaction details as well as cultural factors.

Taiwanese have a reputation for being tough negotiators so it is essential to be well-prepared.

Research the company’s business, markets, financial status and reputation.

Understand current economic conditions and government policies in Taiwan.

Business entertainment

Eating and drinking play a major role in doing business in Taiwan.

Dinners with local representatives and customers help to develop networks and give the local agent ‘face’.

Toasting at banquets, and after-dinner activities such as karaoke singing, are common business practices.

When rice wine (shaoshing jiu) is served at a meal, the custom is for individuals to drink only after a toast is made. The glass should be held in the right hand, preferably supported by the left. Returning a toast is standard practice. Common toasts are ‘ganbay’ (empty your glass) and ‘sweiyi’ (as you please).

Seating should be arranged so that the Australian host’s party is alternated with the Taiwanese guests. Ensure that guests are invited to eat when each course is served.

The guest of honour will be expected to make a move to leave the dining table first at the conclusion of the meal.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

Two-column tariff based on the Harmonised System. Most duties are ad valorem (per cent), based on the GATT Valuation Code - approximately CIF value (Incoterms 1990). Preference is granted to countries having trade agreements or diplomatic relations with Taiwan.

The Ministry of Finance administers customs regulations and procedures in Taiwan. Goods imported into Taiwan are liable to ad valorem (per cent) duty determined and calculated on the transaction value. Tariff rates vary depending on the product. Specific customs regulations also apply to travellers coming into and out of Taiwan.

Customs authority contact details:
Directorate General of Customs
13 Ta Cheng Street
Taipei
Tel: +886 2 2550 5500
Fax: +886 2 2550 8124

Non-tariff barriers

Imports may be affected either under the Automatic Approval system or the Covering Licence system. Some applications for Automatic Approval items must be made to authorised banks; other items may be permitted entry without a licence. Applications for Covering Licence items must be made to the Board of Foreign Trade. Licences are valid for six months.

Permitted imports are classified into two categories:

• Controlled - includes government monopoly controlled items, ie. petroleum; strategic and military supplies; and imported items, which compete with the produce of emerging domestic industries
• Permissible - all other items

All importers, except those authorised to import on a deferred payment basis, must make a deposit with a foreign exchange bank within 14 days after approval of their import licence. The current rate of deposit is 10 per cent of the CIF value (Incoterms 1990).

Product certification, labelling and packaging

Labelling

Outer containers should bear consignee's mark and port mark and should also be numbered (to accord with packing list) unless their contents can be otherwise readily identified.

Labelling regulations are applied to all kinds of packaged foods and pharmaceuticals. If a foreign language is used in the label prepared by the manufacturer in the country of origin, major ingredients, valid date, manufactured date, product name, weight/size, name and address of the importer is required.

Cigarettes must indicate the date of manufacture and display a generic health warning.

Most textile goods are now subject to mandatory labelling requirements; importers should be contacted for specifics.

Square recycle logos are required to be on recyclable containers, including those which are made from glass, plastic, iron, aluminium, paper, and aluminium foil, imported to Taiwan. For plastic containers, triangle recycle logos should also be shown.

Packaging

Goods should be securely packed, having due regard to the nature of the goods, means of transport and likely climatic conditions during transit and delivery.

Special certificates

Live animals, animal products, plants and plant products require health certificates issued by an approved authority in the country of origin (see 'Public health requirements') - two copies required.

Old newspapers require a sanitary certificate - two copies.

Old jute, feather waste, cotton rags, etc. require a fumigation certificate - two copies.

Methods of quoting and payment

Quotes in US dollars preferred but accepted in any free world currency. Should be by pro-forma invoice, and, if for machinery or engineering products, must enclose a catalogue.

Payments usually by letter of credit.

Imports on a collection basis are permitted on documents against payment (D/P) or documents against acceptance (D/A) terms.

Documentary requirements

Commercial invoice

No prescribed form and a minimum of four copies required. The invoice must include:

• import licence number
• names of seller and buyer
• marks and number on each package
• number of packages
• full description of contents (including gross and net weights)
• quantity
• dimensions
• unit price
• total price (whether FOB, C&F, or CIF (Incoterms 1990))
• commissions

Goods in different licensing categories must be shown separately. Method of shipment, packing, date and port of shipment should also be included.

Pro-forma invoice

Two copies are required to obtain import licence. See 'Methods of quoting and payment' regarding quotations. The invoice must include:

• a full description of the goods
• including brand name (if any)
• method of packing
• quantity
• unit price
• total cost
• freight
• insurance and other charges
• method of shipment
• date and port of shipment
• port of destination
• terms of payment
• methods of inspection and/or survey
• validity of offer
• name and address of letter of credit beneficiary and any other details as requested by the importer

Must be certified to the effect that the prices stated therein are either net without rebate or inclusive of commission, as the case may be.

Packing list

Two copies required for customs clearance.

Certificates of origin

Two copies, when requested. It is a requirement to register pharmaceuticals, cosmetics, medical instruments, food additives and agricultural chemicals (see 'Public health requirements').

Bill of lading

All marks and case numbers appearing on outer containers must be shown on the bill of lading.

Public health requirements

Food additives, medical instruments, drugs and pharmaceutical products require prior registration with, and approval from, the Department of Health, Executive Yuan.

Certificate of origin is required to register cosmetics, pharmaceuticals, food additives, agricultural chemicals and some medical instruments.

Live animals, animal products, plants and plant products require health certificates issued by an approved authority in the country of origin. In Australia this is usually the Australian Quarantine and Inspection Service (AQIS), Commonwealth Department of Agriculture, Fisheries and Forestry-Australia.

Use of DDT on agricultural crops or as a household pesticide has been banned.

Insurance

No special requirements.

Weights and measures

The metric system.

Setting up in Taiwan

Finding distributors, agents and local representation are an important part of an export strategy for Taiwan. The business environment in Taiwan is very different from Australia or other Western markets. Therefore, Australian companies need strong in-market representation to enable them to understand the idiosyncrasies of the market, marketing and distribution channels, buyer identification, product support and relationships with key government agencies in the market.

In general, most exporters will start by engaging a Taiwanese company to be their agent or distributor. Taiwanese companies importing products need to have an import licence. However, if local agents or distributors do not have import licences, Australian companies can import through an import-export trading company. Australian exporters should confirm with their potential business partners which import approach will be used.

As the business develops, consideration may be given to appointing a full-time employee in the market, most likely a locally-engaged Taiwanese person. If business continues to grow and expand, consideration might then be given to posting an expatriate manager from Australia.

It is particularly important to choose your local partners wisely, as these decisions can make or break your business. Identify and check the bona fides of potential in-market representation. Obtain a number of different opinions and background views on potential partners before making your decision.

The key factor is to ensure you have someone who knows the market very well and can grow your business in Taiwan. Companies should look for in-market representation that has a good 'fit' with the company, business operating style and good alignment in business objectives for the Taiwan market. It is vital that these mutual objectives be understood, agreed and monitored in an ongoing manner.

Ideally, the Taiwanese partner should be in a position to provide a range of possible inputs to the business partnership:

• A physical site (ie. office, plant, land for development, etc)
• Comprehensive local market knowledge in the area of business activity
• Distribution networks, import license or access to import systems
• Access to raw materials
• Commercial and political connections

For more information on setting up an office in Taiwan, please visit the Commerce Industrial Services Portal at: http://gcis.nat.gov.tw/English/index.jsp.

Taxation

Corporate income tax (or ‘profit-seeking enterprise income tax’) is levied by Taiwan on all registered profit-seeking enterprises including companies, sole proprietors, partnerships and other forms of business organisation organised for profit.

Both foreign and locally owned firms operating within Taiwan and which are classed as profit-seeking enterprises are subject to the following tax rates:

• For taxable incomes NT$120,000 or less, no income tax liability is incurred.
• For taxable incomes above NT$120,000, the tax payable is 17 per cent of total taxable income to a maximum not exceeding 50 per cent of the portion of taxable income in excess of  NT$120,000.

Income tax law is complex and there are implications for resident and non-resident tax-payers. You should contact a tax consultant or authority to determine your own particular circumstances. Or you can visit Taipei National Tax Administration for more information.