Current business situation
The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to Taiwan. This is regularly updated, and should be checked before planning travel.
Business cards – exchanging business cards is customary business practice in Taiwan. Hence, it advised that you carry a large supply at all times as several hundred may be required on a short trip. It is customary to use both hands when presenting and receiving business cards.
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, a high value is placed on punctuality, and as such you should avoid arriving late at appointments.
Gifts – Gift giving is less practiced now as Western business practices are adopted more widely in Taiwan. Foreign business visitors would not be expected to give a gift to a Taiwan business contact at a meeting and it is unlikely that a gift would be offered by the Taiwan side. Small corporate promotional items might be useful to exchange but beware of any gift of any significant value given or received as this could be considered as an attempt to influence a business decision. Be very conscious of regulations pertaining to bribery of foreign officials.
Due to historical connections between Taiwan and the USA through defence ties and the large numbers of senior Taiwanese who have studied in America, there is often a bias towards American goods and services. However in recent years Australia has enjoyed a growing profile in Taiwan due to the increasing numbers of Taiwanese visiting and studying in Australia; in addition to the growth in trade between Australia and Taiwan. Australian business should leverage the growing interest in Australia when negotiating business in Taiwan.
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 an appropriate way to start a business relationship in Taiwan.
The ‘classmate network’ is a recurring theme of business in Taiwan as contacts developed at school or University are carried 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 Taiwanese 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.
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’ (see below). It is recommended you engage in small talk with business partners first before bringing up business related topics.
Toasting at banquets, and after-dinner activities, such as karaoke, 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. As a sign of courtesy, when eating a Chinese meal, the host will sometimes place some food from a new dish on the plate of that of a neighbouring guest.
The guest of honour will be expected to make the first move to conclude the dinner.
‘Face’ – Saving and Losing face
As with other East Asian societies, the concept of ‘face’ plays a role in social interactions in Taiwan; losing face can represent an infraction of the social conventions underpinning daily life. Having said this, Western business visitors to Taiwan should not be overly concerned with this concept so long as normal standards of politeness, punctuality and respect are shown to the people they interact with.
Usually when meeting business partners it is important to defer to the more senior person by letting them speak first. Moreover, invitations to a meal should be accepted unless there is good reason that you cannot attend. Allow the host to pay for the meal.
Losing your cool will make you look immature to many Asian business people. While it may be frustrating, remaining patient and level-headed will boost your chances of reaching an agreement. You can always politely decline the proposed business transaction.
Setting up in Taiwan
While not always necessary, finding distributors, agents and local representation are an important part of an export strategy for Taiwan.
The Law of Taiwan is mainly based on the civil law system, with firm and clearly defined terms in the law codes and regulations, introduced during Japanese rule. Business practices are also underpinned by American-style capitalism. It is against this backdrop that Australian businesses can expect to conduct business in Taiwan.
Australian companies could consider in-market representation to enable them to understand nuances in the market, marketing and distribution channels, buyer identification strategies, product support and relationships with key government agencies in the market.
In general, agents or distributors usually function as a first port-of-call for exporters looking to engage in Taiwan. 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. Professional advice from an experienced lawyer or accountant on the ideal structure for your business as well as advice on local labour laws is important prior to establishing representation in Taiwan.
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 and an 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.
Links and resources
Government, business and trade
Australian Office, Commercial Section – www.austrade.org.tw
Taiwan External Trade Development Council – www.taiwantrade.com.tw
Government Information Office Taiwan – www.gio.gov.tw
Ministry of Economic Affairs – www.moea.gov.tw
The Bureau of Foreign Trade – www.trade.gov.tw
Intellectual Property Office – www.tipo.gov.tw/mp.asp?mp=1
Food and Drug Administration – www.fda.gov.tw/TC/index.aspx
Bureau of Animal and Plant Health Inspection and Quarantine – www.baphiq.gov.tw/homeweb5.php
Taxation Administration – www.dot.gov.tw/en
Ministry of Foreign Affairs – www.mofa.gov.tw/webapp/mp?mp=6
Small and Medium Enterprise Administration, MOEA – www.moeasmea.gov.tw
News and media
Taipei Times – www.taipeitimes.com
China Post – www.chinapost.com.tw
Taiwan Economic News – http://cens.com/cens/html/en/news/news_home.html
Taiwan Headlines – www.taiwanheadlines.gov.tw
Please note: this list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only.