Short content summaries of the 88-page Taiwan Commercial Guide for U.S. Exporters are offered below. For free access to the report (U.S. companies only), please kindly register your company.

Chapter 1: Doing Business In Taiwan

Taiwan, a small mountainous island with a population of 23 million and few natural resources, has become a high-tech powerhouse that boasts the world’s nineteenthlargest economy. It is a major trading partner of the United States, and ranks among our top 10 export markets for both agricultural and non-agricultural products. Per capita GDP and household disposable income rank among the highest in Asia, making Taiwan an attractive consumer goods market despite its relatively small population...

Chapter 2: Political and Economic Environment

For background information on the political and economic environment of the country, please click on the link below to the U.S. Department of State Background Notes. http://www.state.gov/r/pa/ei/bgn/35855.htm

Chapter 3: Selling U.S. Products and Services

Most foreign firms gain their initial foothold in the Taiwan market by using a local agent. Many Taiwan firms prefer the partnering aspect of an agent relationship. Although some companies are willing to act only as distributors, there is concern that foreign firms that are merely seeking distributors may not be serious about the market and will not support their distributors. Some U.S. exporters that sell equipment or machinery may find it necessary to locate a partner willing and able to do some assembly or manufacturing in Taiwan. Although not necessarily formal joint ventures, these efforts require a higher degree of commitment to the market than simply selling through an agent. If the size of the market warrants, companies may wish to consider setting up a branch office or subsidiary in Taiwan. Taiwan officially welcomes foreign investment and establishing an office in Taiwan is relatively easy, even if the procedures are sometimes bureaucratic.

Chapter 4: Leading Sectors for U.S. Export and Investment

Taiwan’s electronics industry continues to advance towards newer and more sophisticated technologies, such as 12-inch wafer fabrication, 7.5 or higher generation flat panel displays (FPDs), large-sized LCD TVs, and wireless communications. Capital spending for semiconductor and FPD production capacity are expected to be particularly significant for the next few years. Market expansion will thus be primarily fueled by an anticipated increase in demand for imported advanced EIP equipment by the two major user groups -- semiconductor and FPD manufacturers. These two user groups, which each account for about 40-45 percent of Taiwan’s total EIP market, have plans to invest approximately US$30-40 billion in more than 10 ongoing and proposed capacity expansion projects over the 2007-2008 period. The trend towards more advanced finished electronic and component production will also require increasingly high-end systems. Given these trends, demand for imported EIP equipment, which accounts for more than 80 percent Taiwan’s total market, will be promising over the next two to three years. As a major source of specialized EIP equipment, U.S. firms will find excellent sales opportunities given their products’ superior performance, high reliability, and durability.

Chapter 5: Trade Regulations and Standards

Taiwan’s tariff schedule is constructed based on the Harmonized Commodity Description and Coding System (HS) of the Customs Cooperation Council. On July 1, 2006, Taiwan promulgated a comprehensive revised tariff schedule in compliance with Taiwan’s Free Trade Agreement with Guatemala. This revised tariff schedule applies to all of Taiwan’s trade partners. Tariffs on parts and components for plastic and rubber processing machinery and trailers and semi-trailers dropped from 5 percent and 7.5 percent respectively to 2.5 percent. Additionally, tariffs on 12 types of fertilizers were eliminated. Taiwan’s average nominal tariff rate on imported goods in 2007 was approximately 5.57 percent and is expected to fall marginally to 5.56 percent (13.65 percent for agricultural products and 4.09 percent for industrial products) in 2008.

Chapter 6: Investment Climate

Taiwan officially welcomes foreign direct investment. Taiwan’s science-based industrial parks, export processing zones, and free trade zones offer streamlined procedures. Taiwan has made significant improvement in protecting intellectual property. As part of its efforts to improve the investment climate, Taiwan no longer has a list of permitted investments, but maintains a "negative" list of industries closed to foreign investment to maintain security and environmental protection. Liberalization has reduced that list to less than one percent of manufacturing categories and less than five percent of service industries. The latest significant liberalization took place in February of 2003 when alcohol production, agricultural production, fishing, and animal husbandry were opened to foreign investors. Prior approval is required, but this requirement will be dropped for projects with an investment below NT$8 million (U$246,000) if legislation pending before the legislature passes into law. To live up to its WTO accession commitments, Taiwan opened private production of cigarettes in 2004 without any foreign ownership limit. Railway transport, freight transport by small trucks, pesticide manufacture, and real estate development, brokerage, leasing, and trading are all completely open to foreign investment. After its accession to the WTO in January 2002, Taiwan started permitting imports of gasoline and liquid natural gas (LNG) by the private sector, without any foreign ownership restriction. It also permitted private wine and cigarette imports. In April 2004, Taiwan dropped mining and ordinary trucking services from the negative list but added single-axle truck leasing.

Chapter 7: Trade and Project Financing

Bank-to-bank Letters of Credit (L/C) constitute Taiwan’s most important import-payment vehicle. Company-to-company payments are also made via two other methods: open account (O/A) and documentary collections, such as documents against payment (D/P) and documents against acceptance (D/A). The AIT Commercial Section recommends that U.S. exporters minimize financial risk by requiring their Taiwan trading partners to finance their imports through L/Cs. A large majority of Taiwan’s importers utilize L/Cs with validity of up to 180 days. On the whole, U.S. companies find Taiwan’s trade finance system to be efficient and report no widespread pattern of deferred payment. Banks authorized to handle foreign exchange may issue L/Cs. This includes all local banks (and their branch offices), nine U.S. banks and their branches, and 24 thirdcountry banks. All banks in Taiwan that are authorized to handle foreign exchange have correspondent relations with one or more U.S. banks. This relationship includes test-key exchanges.

Chapter 8: Business Travel

BUSINESS CARDS --- Formal business introductions in Taiwan are not complete without an exchange of business cards. It is advisable for foreign visitors to have their cards printed in both English and Chinese (using traditional Chinese characters, not simplified). There are numerous printers in Taiwan specializing in printing these indispensable business aids. They offer accurate, low-cost service, with card orders normally being filled within days. Since cards are required on nearly every business occasion, it is a good idea to carry a number of them at all times.

Chapter 9: Contacts, Market Research and Trade Events

Access to the U.S. Commercial Service Market Research Library containing more than 20 industry and country-specific market reports for Taiwan market for the year of 2007 and U.S. Trade Related Contacts, including: Washington, D.C.-Based Country Contacts, AmCham and/or Bilateral Business Councils, Trade or Industry Associations, Public Agencies, and other U.S. Government Contact Numbers.

Chapter 10: Guide to Our Services

The U.S. Commercial Service offers customized solutions to help your business enter and succeed in markets worldwide. Our global network of trade specialists will work one-on-one with you through every step of the exporting process

For free access to the report (U.S. companies only), please kindly register your company.