VZCZCXRO3341
PP RUEHCN RUEHGH RUEHVC
DE RUEHIN #0076/01 0160945
ZNR UUUUU ZZH
P 160945Z JAN 08
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC PRIORITY 7872
RUCPCIM/CIM NTDB WASHINGTON DC PRIORITY
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHBK/AMEMBASSY BANGKOK 3980
RUEHBY/AMEMBASSY CANBERRA 4723
RUEHHI/AMEMBASSY HANOI 3456
RUEHJA/AMEMBASSY JAKARTA 4199
RUEHKL/AMEMBASSY KUALA LUMPUR 3877
RUEHML/AMEMBASSY MANILA 0281
RUEHUL/AMEMBASSY SEOUL 9219
RUEHGP/AMEMBASSY SINGAPORE 7149
RUEHKO/AMEMBASSY TOKYO 9459
RUEHWL/AMEMBASSY WELLINGTON 1989
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 19 TAIPEI 000076 
 
SIPDIS 
 
SIPDIS 
 
STATE PLEASE PASS USTR 
STATE FOR EB/IFD/OIA/HATCHER, KAMBARA, AND TRACTON, 
EAP/RSP/TC, EAP/EP 
USTR FOR KATZ, STRATFORD AND BEHAR 
USDOC FOR 3132/USFCS/OIO/EAP/WZARIT 
TREASURY FOR OASIA/TTYANG AND HAARSAGER 
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF 
GOVERNORS, AND SAN FRANCISCO FRB/TERESA CURRAN, AND NEW 
YORK FRB MARI BOLIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV EFIN ETRD TW
SUBJECT: TAIWAN:  2008 INVESTMENT CLIMATE STATEMENT 
 
REF: STATE 158802 
 
---------------------------------- 
A.1 Openness to Foreign Investment 
---------------------------------- 
 
¶1.  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. 
 
¶2.  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, 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. 
 
¶3.  Most foreign ownership limits have been removed.  The 
foreign ownership limit on wireless and wireline 
telecommunications firms is 60%, including a direct foreign 
investment limit of 49%.  For the state-owned Chunghwa 
Telecom Co., which controls 97% of the fixed line telecom 
market, the limit on direct and indirect foreign investment 
was raised from 49% to 55% in December 2007.  There is a 20% 
limit on foreign direct investment on cable television 
broadcast services, but foreign ownership of up to 60% is 
allowed through indirect investment via a Taiwan entity. 
Foreign investors now control three of the five largest cable 
TV networks in Taiwan.  Foreign ownership limits are 49.99% 
for satellite television broadcasting services and piped 
distribution of natural gas and 49% for high-speed railways. 
A 50% foreign ownership limit remains on Taiwan-flagged 
merchant ships, power transmission and distribution, 
ground-handling firms, air-cargo terminals, air-catering 
companies, and air-cargo forwarders.  The 50% foreign 
ownership limit for ground-handling firms, air-cargo 
terminals, air-catering companies, and air-cargo forwarders 
was removed for investors from WTO members in November 2001. 
In July 2007, the foreign ownership limit on airline 
companies was raised from 33.33% to 49%, with a separate 
limit of 25% for any single foreign investor. 
 
¶4.  Regulations governing foreign direct investment 
principally derive from the Statute for Investment by Foreign 
Nationals (SIFN) and the Statute for Investment by Overseas 
Chinese (SIOC).  These two laws permit foreign investors to 
use either foreign currencies or NT dollars.  In mid-2006, 
 
TAIPEI 00000076  002 OF 019 
 
 
Taiwan authorities started permitting NT dollar loans 
obtained from local banks to serve as sources of foreign 
direct investment.  Companies with foreign ownership below 
one-third are exempt from limitations on the negative list. 
Both the SIFN and the SIOC specify that foreign-invested 
enterprises must receive the same regulatory treatment 
accorded local firms.  Foreign companies may invest in 
state-owned firms undergoing privatization and are eligible 
to participate in publicly-financed research and development 
programs. 
 
¶5.  The Investment Commission (IC) of the Ministry of 
Economic Affairs screens applications for investment, 
acquisitions, and mergers.  According to the IC, 
approximately 98% of projects with an investment value less 
than NT$500 million (US$15.4 million at an exchange rate of 
NT$32.5 per US$) are excluded from the negative list; the IC 
estimates that approval for these projects is generally 
granted within two working days at the IC division chief 
level.  For investments in the range of NT$500 million 
(US$15.4 million) to NT$1,500 million (US$46.2 million) 
excluded from the negative list, approval authority rests 
with the IC Executive Secretary and normally is granted 
within three working days.  Approval of investments in 
industries above NT$1,500 million or on the negative list 
requires two weeks because those investments must be referred 
to the relevant supervisory ministries and require approval 
of the IC Chairman or IC Executive Secretary.  Investments 
involving complications such as mergers and acquisitions 
require screening at the monthly meeting of an 
inter-ministerial commission. 
 
¶6.  Taiwan offers incentives to encourage investment, 
including accelerated depreciation and tax credits for 
investments in emerging or strategic industries, 
pollution-control systems, production automation, and energy 
conservation.  Equipment for R&D purposes can be brought into 
Taiwan duty-free.  Other incentives include low-interest 
loans for developing new and/or cutting edge products, 
upgrading traditional industries, and importing automation or 
pollution-control equipment.  A broad five-year tax holiday 
for new investments was re-instituted in January 1995. 
Incentives for manufacturing firms to locate factories in 
designated industrial parks to include free rent the first 
two years, 40% discount on rent the next two years, and 20% 
discount on rent in the fifth and sixth years has been 
extended to December 2008.  Under another incentive program, 
state-owned land is available for investors rent-free for the 
first four years and 50% off for the next six years.  As part 
of its financial reform plan, Taiwan encourages and provides 
incentives for banks, insurance companies, securities firms, 
and financial holding companies to merge. 
 
¶7.  In 2005 and 2006, Taiwan authorities slashed some 
investment tax incentives as a part of a tax reform designed 
to reduce the fiscal deficit.  A new law to levy a 
ten-percent alternative minimum tax on business firms became 
effective in January 2006.  Since early 2005, Taiwan 
authorities have cut the number of industries entitled to tax 
incentives by one-third and doubled the thresholds in annual 
R&D expenses for tax offsets from NT$15)20 million (US$462 
thousand to US$615 thousand) to NT$30)40 million (US$923 
thousand to US$1.23 million).  The tax credit for procurement 
of automation equipment has been lowered from 11% to 7% and 
that for procurement of technologies reduced from 10% to 5%. 
The tax credit for projects in remote poor areas has been cut 
from 20% to 15%. 
 
 
TAIPEI 00000076  003 OF 019 
 
 
------------------------------------ 
A.2 Conversion and Transfer Policies 
------------------------------------ 
 
¶8.  There are relatively few restrictions on converting or 
transferring direct investment funds.  Foreign investors with 
approved investments can readily obtain foreign exchange from 
a large number of designated banks.  The remittance of 
capital invested in Taiwan must be reported in advance to the 
IC, but IC approval is not requited.  Declared earnings, 
capital gains, dividends, royalties, management fees, and 
other returns on investments can be repatriated at any time. 
For large transactions requiring the exchange of NT$ into 
foreign currency which could potentially disrupt Taiwan's 
shallow foreign exchange market, the central bank may require 
the transaction to be scheduled over several days.  There is 
no written guideline on the size of such transactions, but 
amounts in excess of US$100 million may be affected.  Capital 
movements arising from trade in merchandise and services, as 
well as from debt servicing, are not restricted.  No prior 
approval is required for movement of foreign currency funds 
not requiring exchange between the NT dollar and the foreign 
currency.  No prior approval is required if the cumulative 
amount of inward or outward remittances does not exceed the 
annual limit of US$5 million for an individual or US$50 
million for a corporate entity. 
 
¶9.  Total outbound investment may not exceed 40% of the 
investing company's net worth or paid-in capital (whichever 
is less), unless the company charter waived the 40% limit or 
unless such investment is approved by shareholders.  A local 
company is not required to obtain prior approval for overseas 
investments; however, such an approval exempts the company 
from the annual capital outflow limit of US$50 million. 
Investments in China are subject to additional restrictions. 
 
¶10.  Taiwan has significantly relaxed restrictions on Taiwan 
entities, direct investment in China down to a negative list 
covering about 100 manufacturing products and 430 
agricultural products.  Taiwan has abolished a requirement 
for direct investment in China to go through third nations or 
areas and removed a direct investment limit of US$50 million. 
 The ceiling on small and medium enterprises' investment in 
China is NT$80 million (US$2.5 million).  For large 
enterprises, total China investment may not exceed 20% of the 
company,s net worth exceeding NT$10 billion, 30% of net 
worth from NT$5 billion to NT$10 billion (US$308 - 615 
million), and 40% of the net worth below NT$5 billion (US$154 
million).  For investments below US$200,000, approval can be 
issued on the same day of submitting the application.  Taiwan 
authorities require an investor to submit a quarterly 
financial report if the cumulative investment in a project 
exceeds US$20 million.  Investors are encouraged to 
repatriate their capital and earnings. 
 
¶11.  Taiwan authorities have actively encouraged investment 
in Southeast Asia and India.  Investments are also encouraged 
in a number of countries with which Taiwan has diplomatic 
relations, mainly in Central America.  Incentives include 
loans and/or overseas investment insurance from Taiwan's 
Export-Import Bank. 
 
---------------------------------- 
A.3 Expropriation and Compensation 
---------------------------------- 
 
¶12.  No foreign-invested firm has ever been nationalized or 
expropriated in Taiwan.  No examples of "creeping 
 
TAIPEI 00000076  004 OF 019 
 
 
expropriation" or official actions tantamount to 
expropriation have been reported.  Under Taiwan law no 
venture with 45% or more foreign investment can be 
nationalized for a period of 20 years after the venture is 
established.  Expropriation can be justified only for 
national defense needs and "reasonable" compensation must be 
given. 
 
---------------------- 
A.4 Dispute Settlement 
---------------------- 
 
¶13.  Taiwan is not a member of the International Center for 
the Settlement of Investment Disputes or the New York 
Convention of 1958 on the recognition and enforcement of 
foreign arbitrage awards.  Investment disputes with the 
Taiwan authorities are not common.  Normally, Taiwan resolves 
disputes according to domestic laws and regulations. 
 
¶14.  Taiwan has comprehensive commercial laws, including the 
Company Law, Commercial Registration Law, Business 
Registration Law, Commercial Accounting Law as well as laws 
for specific industries.  Taiwan's Bankruptcy Law guarantees 
that all creditors have the right to share the assets of a 
bankrupt debtor on a proportional basis.  Secured interests 
in property, both chattel and real, are recognized and 
enforced through a registration system. 
 
¶15.  Taiwan's court system is generally viewed as independent 
and free from overt interference by the other official 
branches.  Judges are generally over-worked.  In response to 
complaints about the slow pace of judicial decision-making, 
Taiwan authorities adopted measures in 2002 to monitor case 
processing time.  Simplified courts have been set up to deal 
with minor cases that can be resolved quickly.  The 
legislature enacted a bill to set up special courts for 
intellectual property rights (IPR) cases in March 2007, and 
the courts are scheduled to start reviewing cases in July 
¶2008.  The judgments of foreign courts with jurisdictional 
authority are enforced in Taiwan by local courts on a 
reciprocal basis. 
 
------------------------------------------- 
A.5 Performance Requirements and Incentives 
------------------------------------------- 
 
¶16.  All of Taiwan,s performance requirements were removed 
in January 2002 upon Taiwan's WTO accession.  Like domestic 
firms, foreign-invested companies must be located in areas 
zoned for appropriate industrial or commercial use.  Taiwan 
does not require that firms transfer technology, locate in 
specified areas, or hire a minimum number of local employees 
as a prerequisite to investment. 
 
¶17.  Manufacturing firms located in export-processing zones 
and science-based industrial parks are required to export all 
of their production to obtain tariff-free treatment of 
production inputs.  However, these firms may sell on the 
domestic market upon payment of relevant import duties. 
 
¶18.  When acceding to the WTO in January 2002, Taiwan 
promised to accede to the Government Procurement Agreement 
(GPA).  Taiwan also promised to phase out industrial offset 
requirements (IOR) for non-military public procurement upon 
signing the GPA.  Taiwan has yet to accede to the GPA, but 
even without GPA membership, Taiwan started reducing the IOR 
coverage of non-military procurements in 2004.  Currently, 
only railway and power generation projects are subject to 
 
TAIPEI 00000076  005 OF 019 
 
 
IOR.  For these two categories, a contract of US$10 million 
or more triggers an offset obligation of at least 33%.  For 
military procurements, the threshold is US$5 million, and the 
minimum offset obligation is 40%.  In some military cases, 
the offset ratio has reached 70% due to legislative pressure. 
 Since the first industrial offset contract (IOC) was signed 
in 1988, Taiwan has signed IOCs with 51 suppliers from 12 
foreign countries.  Commitment value of these contracts total 
US$8.4 billion, and realized contracts amounted to US$5.3 
billion.  Forty-six percent of the total realized value was 
directed to transfer of technologies, 27% to foreign direct 
investment in Taiwan, 15% to procurement from Taiwan, 5% to 
trade promotion, 4% to personnel training, and 2% to 
assessment certification.  Taiwan has published industrial 
offset rules in both Chinese and English to which readers can 
access online. 
 
--------------------------------------------- --- 
A.6 Right to Private Ownership and Establishment 
--------------------------------------------- --- 
 
¶19.  Private investors have the right to establish and own 
business enterprises, except in a limited number of 
industries involving national security and environmental 
protection.  Private entities can freely acquire and dispose 
of interests in business enterprises.  Private firms have the 
same access as state-owned companies to markets, credit, 
licenses, and supplies.  Taiwan authorities have eliminated 
state-owned monopolies. 
 
--------------------------------- 
A.7 Protection of Property Rights 
--------------------------------- 
 
¶20.  Taiwan has continued efforts to improve its IPR legal 
regime and enforcement.  The Intellectual Property Office 
(TIPO) under the Ministry of Economic Affairs as well as 
other relevant agencies have adopted programs to crack down 
on Internet and physical piracy.  In addition, the Ministry 
of Education (MOE) announced a campus IPR action plan in 
October 2007 to strengthen management of academic computer 
networks and restrict illegal textbook coping by students. 
Taiwan has amended laws and regulations to meet international 
standards and requirements.  Taiwan has also amended the 
Patent Law and Copyright Law to extend the term of protection 
from 18 years to 20 years for some patents and to define 
computer software as literary works.  Taiwan has enacted the 
Optical Media Law to address CD/DVD piracy problems.  The law 
has established a legal framework for regulation of CD 
manufacturing plants through licensing and the use of Source 
Identification (SID) codes in production.  Convicted 
violators may receive prison terms of up to three years and 
fines of up to NT$6 million (US$184,600).  The Optical Media 
Law, together with effective enforcement, has led to a 
dramatic decrease in large-scale production of counterfeit CD 
products.   Amendments to the Copyright Law in 2003 and 2004 
made copyright infringement a public crime, increased 
penalties for counterfeiters and made it illegal to tamper 
with technical protection measures.  The Pharmaceutical Law 
as amended in 2004 and 2007 stiffened penalties for 
production, distribution and sale of counterfeit medicines. 
A 2005 amendment to the Law to authorized pharmaceutical data 
exclusivity for five years to prevent unfair commercial data 
use --the same data-exclusivity period as in the United 
States--but U.S. original-drug manufacturers complain that 
Taiwan authorities unfairly allow generic-pharmaceutical 
makers to apply for a license and a Bureau of National Health 
Insurance reimbursement price for their knock-off drugs even 
 
TAIPEI 00000076  006 OF 019 
 
 
before the original drug's data-exclusivity period has 
expired.  A June 2007 amendment to the Copyright Law subjects 
illegal file sharing, such as P2P, to a maximum jail term of 
two years.  In March 2007, Taiwan completed legislation of 
the IP Court Organization Law for establishment of a 
specialized IP court which is scheduled to start reviewing 
cases in July 2008. 
 
¶21.  In 2003, Taiwan established  the Integrated Enforcement 
Task Force (IETF), which consists of 220 IP police officers. 
In 2004, the task force was transformed to a permanent IP 
police squadron.  The IP police have frequently raided retail 
optical- media sales points.  This has led to a significant 
decrease in the number of counterfeit CD and DVD vendors. 
Other enforcement measures include increasing the reward by 
ten times to NT$10 million (US$300,000) to IPR informants for 
counterfeit -goods  seizures ,  and setting up an 
anti-pirating CD export task force to strengthen inspection 
of commodities entering or leaving Taiwan. 
 
¶22. While Taiwan has improved IPR protection, transshipment 
of counterfeit products from China to the United States 
remains a problem.  Counterfeit goods from Taiwan seized by 
U.S. Customs dropped from $26.5 million in 2002 to $1.1 
million in 2005.  The value of seized counterfeit goods was 
$1.8 million in 2006 and $2.8 million in the first half of 
FY2007.  In addition, Taiwan is facing a growing 
Internet-based piracy threat.  Rights owners continue to 
complain of slow progress in judicial cases, or poor 
protection on trade dress properties, such as unregistered 
marks, packing configurations, and outward appearance 
features.  Although counterfeit and parallel imported 
pharmaceuticals are still found in the Taiwan marketplace, 
the legislature passed amendments to the Pharmaceutical Law 
in 2004 and 2007 to increase the penalties for dealing in 
counterfeit pharmaceuticals, resulting in marked increases in 
fines and jail terms over the past several years. 
 
----------------------------------------- 
A.8 Transparency of the Regulatory System 
----------------------------------------- 
 
¶23.  Taiwan has a set of comprehensive laws and regulations 
regarding taxes, labor, health and safety. 
 
¶24.  Foreign investors note that in addition to tax 
incentives, Taiwan,s science-based industrial parks and 
export processing zones have simple and transparent 
bureaucratic procedures for the investment application 
process.  Outside of these areas, the Department of 
Investment Services (DOIS) functions as the coordinator 
between investors and all agencies involved in the investment 
process.  The Investment Commission (IC) is charged with 
reviewing and approving inbound and outbound investments. 
 
¶25.  Taiwan has simplified work-permit procedures for foreign 
white-collar employees.  In March 2004, the Council of Labor 
Affairs (CLA) set up a single window to issue work permits 
for all white-collar workers.  It takes 7 to 10 days for the 
CLA to issue work permits.  The work permit may be extended 
indefinitely as long as the employer considers the employment 
necessary. 
 
¶26.  Taiwan has removed the job experience requirement for 
employment of foreign management professionals by global 
operational headquarters and R&D centers as well as business 
firms of designated industries.  White-collar workers having 
a master,s degree or above are not subject to any job 
 
TAIPEI 00000076  007 OF 019 
 
 
experience requirement.  Those with lower education levels 
are required to have job experience.  Foreign white- and 
blue-collar workers have the right to obtain permanent 
residence status after they have legally stayed in Taiwan for 
seven consecutive years with the minimum time of residence of 
180 days per year in Taiwan.  The seven-year requirement is 
waived for high-tech personnel and those who have made 
"significant contributions" to Taiwan. 
 
¶27.  The entry-visa issuance procedures for foreign 
white-collar workers who work for foreign-invested companies 
are relatively simple.  A foreign executive who enters Taiwan 
with a tourist visa is no longer required to leave the island 
before the tourist visa can be changed to an employment visa. 
 A foreign executive whose employment visa expires is not 
required to exit before renewing the visa. 
 
--------------------------------------------- -------- 
A.9 Efficient Capital Markets and Portfolio Investment 
--------------------------------------------- -------- 
 
¶28.  A wide variety of credit instruments, all allocated on 
market terms, are available to both domestic- and 
foreign-invested firms.  Legal accounting systems are largely 
transparent and consistent with international standards.  The 
regulatory system is generally fair.  Foreign portfolio 
investors are no longer subject to foreign ownership limits 
or investment fund limits.  In recent years, Taiwan 
authorities have taken a number of steps to encourage a more 
efficient flow of financial resources and credit.  The limit 
on NT dollar deposits that a branch of a foreign bank may 
take has been lifted.  Non-residents are permitted to open NT 
dollar bank accounts, which are subject to capital-flow 
controls which limit each remittance to US$100,000.  There 
are no restrictions on residents opening bank accounts 
overseas.  Limits on branch banking have been lifted.  A 
freeze on new bank branches to encourage consolidation was 
removed in 2007.  Restrictions on capital flows relating to 
portfolio investment have been removed.  The insurance and 
securities industries have been liberalized and opened to 
foreign investment.  Access to Taiwan's securities markets by 
foreign institutional investors has also been broadened. 
 
¶29.  Taiwan abolished a complicated regulatory system 
governing foreign portfolio investment in October 2003. 
Since then, any foreign institutional investor is allowed to 
enter Taiwan,s markets.  Subsequent registration has 
replaced the need for prior approval.  There is no minimum 
asset requirement.  Investment and capital flows are not 
limited.  On-shore foreign investors (like other residents) 
are still subject to capital flow limits of US$5 million for 
an individual foreign investor and US$50 million for an 
unregistered foreign company. 
 
¶30.  Taiwan has removed all legal limits on foreign ownership 
except for investors from China in nearly all companies 
listed on the Taiwan Stock Exchange (TAIEX).  These 
exceptions include power distribution, telecommunications, 
mass media firms, and airline companies.  There have been no 
reports of private or official efforts to restrict the 
participation of foreign-invested firms in industry 
standards-setting consortia or organizations. 
 
¶31.  Taiwan has a tightly regulated banking system.  Since 
the mid-1980s, the financial sector as a whole has been 
steadily opening to private investment.  The market share 
held by foreign banks had been relatively small until four 
foreign banks and three foreign private equity funds 
 
TAIPEI 00000076  008 OF 019 
 
 
completed their acquisitions of Taiwan banks in 2007.  The 
market share of all foreign banks in Taiwan (including the 
seven acquired by foreign investors in 2007) increased from 
8% in 2006 to 15% in terms of assets in 2007, or from below 
3% to nearly 7% in terms of loans.  The establishment of a 
number of new securities firms, banks, insurance companies, 
and holding companies has underscored this liberalization 
trend and enhanced competition.  Over the past decade, nine 
state-owned banks have been privatized.  The only 
Taiwan-based reinsurance company was privatized in 2002. 
State-controlled banks still dominate the banking sector, 
however, and hold a market share of 51% in terms of assets 
and 56% in terms of loans.  This share has been falling in 
recent years as Taiwan has begun privatization efforts. 
 
----------------------- 
A.10 Political Violence 
----------------------- 
 
¶32.  Taiwan is a relatively young multi-party democracy with 
democratic political institutions that are still evolving. 
The close margin in the 2004 presidential election resulted 
in an attack on election offices and several large-scale 
demonstrations.  Nevertheless, these incidents and other 
protests were peacefully resolved in a short time.  There 
have been no reports of politically motivated damage to 
foreign investment.  Both local and foreign companies have, 
however, been subject to protests and demonstrations relating 
to labor disputes and environmental issues. 
 
------------------ 
A.11.a. Corruption 
------------------ 
 
¶33.  Taiwan has implemented laws, regulations, and penalties 
to combat corruption.  The Corruption Punishment Statute and 
the criminal code contain specific penalties for corrupt 
activities.  In January 2004, legislation doubled the 
penalties for corruption by financial personnel, including 
maximum jail sentences of up to ten years. 
 
¶34.  We are not aware of cases where bribes have been 
solicited for investment approval.  Both central and local 
governments offer investors incentives, including free rent 
on land for the first several years and discounts in 
subsequent years.  Taiwan authorities encourage foreign 
investment and would take action against officials and 
individuals convicted of profiting illegally from foreign 
investors. 
 
¶35.  The Government Procurement Law promulgated in 1998 and 
amended in February 2001 was an element of promised 
significant improvements upon WTO accession.  The Public 
Construction Commission (PCC) now publishes all major state 
procurement projects that require open bidding, in accordance 
with WTO transparency requirements.  The PCC organizes 
inspection teams to monitor all public procurement projects 
both at the central and local levels, and publishes results 
of bidding and of inspections.  A task force has been 
organized to investigate complaints. 
 
¶36.  Authorities generally investigate allegations of 
corruption and take action to penalize corrupt officials. 
Since its inauguration in May 2000, the Chen Administration 
has strengthened anti-corruption efforts.  Since then, 
prosecutors have indicted 10,807 persons for corruption, 
including prominent personalities, 632 senior officials 
(department director level and above) and 623 elected 
 
TAIPEI 00000076  009 OF 019 
 
 
officials.  Indicted elected officials included 21 
legislators.  In 2006, the Taiwan High Court upheld a 
district court's four-year jail sentence for a former speaker 
of the legislature on a charge of taking a NT$150 million 
(US$4.6 million) bribe.  In 2007, prosecutors indicted a 
serving minister and a vice minister for receiving bribes, 
while district courts convicted another two vice ministers 
with jail terms of up to 16 years. 
 
¶37.  Attempting to bribe, or accepting a bribe from, Taiwan 
officials constitutes a criminal offense, punishable under 
the Corruption Punishment Statute and the Criminal Code.  The 
Corruption Punishment Statute as amended in late 2002 treats 
payment of a bribe to a foreign official as a criminal act 
and makes such a bribe subject to criminal prosecution.  The 
maximum penalty for corruption is life imprisonment plus a 
maximum fine of NT$3 million dollars (US$92,300).  In 
addition, the offender may be barred from holding public 
office.  The assets obtained from acts of corruption may be 
seized and turned over to either the injured parties or the 
Treasury. 
 
---------------------------------- 
¶B. Bilateral Investment Agreements 
---------------------------------- 
 
¶38.  Taiwan has concluded bilateral investment guaranty 
agreements with the following 26 countries: Argentina, 
Belize, Burkina Faso, Costa Rica, Dominica, El Salvador, 
Guatemala, Honduras, India, Indonesia, Liberia, Malaysia, 
Macedonia, the Marshall Islands, Nicaragua, Nigeria, Panama, 
Paraguay, the Philippines, Saudi Arabia, Senegal, Singapore, 
Swaziland, Thailand, Malawi, and Vietnam.  In addition, there 
is an agreement to guaranty Taiwan,s investment in Malawi 
and other agreements to protect U.S. investment in Taiwan 
(see next paragraph).  (An agreement with Latvia signed in 
1992 was revoked in August 2004.) 
 
¶39.  The terms of the 1948 Friendship, Commerce, and 
Navigation Treaty between the Republic of China and the 
United States are still in force, and under the terms of the 
agreement U.S. investors are generally accorded national 
treatment and are provided with a number of protections, 
including protection against expropriation.  Taiwan and the 
United States also have an agreement, signed in 1952, 
pertaining to investment guarantees that serve as the basis 
for the U.S. Overseas Private Investment Corporation (OPIC) 
program in Taiwan.  In September 1994, representatives of the 
United States and Taiwan signed a bilateral Trade and 
Investment Framework Agreement (TIFA) to serve as the basis 
for consultations on trade and investment issues. 
Consultations on a bilateral investment agreement between the 
United States and Taiwan began in 1996, and the latest round 
took place in Washington in 2007. 
 
--------------------------------------------- -- 
¶C. OPIC and Other Investment-Insurance Programs 
--------------------------------------------- -- 
 
¶40.  OPIC programs are available to U.S. investors, though 
U.S. investors have never filed an OPIC insurance claim for 
an investment in Taiwan.  Taiwan is not a member of the 
Multilateral Investment Guaranty Agency. 
 
-------- 
¶D. Labor 
-------- 
 
 
TAIPEI 00000076  010 OF 019 
 
 
¶41.  Unemployment, at just under 4%, has declined since 2002, 
but is still above the 1.45% to 2.99% range in the 1990s. 
Taiwan's aging population, however, has prompted greater 
demand for foreign caregivers.  The percentage of the 
population aged 65 and above has increased from below 4% in 
the 1970s to above 10% in late 2007.  In response, the number 
of foreign caregivers has grown to 160,000 and accounts for 
45% of blue-collar foreign workers in Taiwan.  In the 
industrial sector, despite relaxation of employment 
restrictions, the number of the sector's blue-collar foreign 
workers declined 13% from 228,000 in 2000 to 197,770 in 
November 2007. 
 
¶42.  There are no special hiring practices in Taiwan.  Wages 
typically include a one-month bonus at the end of a year. 
Benefits often include meals, transportation, and dormitory 
housing.  Dividend-sharing is common among high-tech 
industries.  A standard labor insurance program is mandatory. 
 The program provides paid maternity leave, a lump-sum or 
annuity retirement plan, and other benefits.  A new 
retirement system implemented in July 2005 abolishes the 
voluntary retirement scheme under an old system which still 
covers 30% of total employment population.  The old system 
grants employees voluntary retirement at age 55 with 15 years 
of service.  Employees hired after July 2005 must join the 
new system, with a retirement age of 60.  The new system 
requires employers to contribute six percent of their monthly 
wage to accounts at designated banking institutions.  The 
accounts follow employees as they move from one employer to 
another.  A universal national health insurance system, to 
which employers contribute, covers all Taiwan residents. 
 
¶43.  Taiwan provides unemployment relief based on the 
Employment Insurance Law enacted in 2002.  Alternatives for 
unemployment pay include vocational training allowance for 
jobless persons and employment subsidies to encourage 
employment of jobless persons.  The Labor Standards Law (LSL) 
sets a standard eight-hour workday and a biweekly maximum of 
84 hours.  Legislation adopted in late 2000 set a five-day 
workweek for the public sector, effective January 2001.  Over 
half of private firms have adopted the five-day workweek. 
The LSL restricts child labor and requires employers to 
provide overtime pay, severance pay, and retirement benefits. 
 The LSL covers both manufacturing and service sectors. 
Violators are liable to criminal penalties (jail terms) and 
administrative punishments (fines). 
 
¶44.  In July 2007, Taiwan raised the minimum monthly wage by 
9.1% to NT$17,280 (US$532) and the minimum hourly wage from 
NT$66 (US$2) to NT$95 (US$2.9).  Monthly manufacturing sector 
wages in the first ten months of 2007 averaged NT$43,704 
(US$1,345) including overtime, allowances and bonuses. 
 
¶45.  Labor unions have become more active and independent 
since Taiwan,s martial law was lifted in 1987. 
Privatization and the new retirement system contributed to an 
increase in labor disputes over the past three years.  Taiwan 
is not a member of the International Labor Organization (ILO) 
but adheres to the ILO Conventions in protection of worker,s 
rights. 
 
--------------------------------- 
¶E. Foreign Trade Zones/Free Ports 
--------------------------------- 
 
¶46.  The first free trade/free port zone began operation at 
Keelung, Taiwan,s northern port, in November 2004.  Another 
four were established in 2005.  These four are located at 
 
TAIPEI 00000076  011 OF 019 
 
 
Taoyuan International Airport and the international harbors 
in Kaohsiung, Taichung, and Taipei.  Taiwan authorities have 
relaxed restrictions on movement of merchandise, capital and 
personnel into and out of such zones.  Foreign investors are 
accorded national treatment. 
 
--------------------------------------- 
¶F. Foreign Direct Investment Statistics 
--------------------------------------- 
 
¶47.  Statistics on foreign direct investment in Taiwan are 
available from two sources.  The Investment Commission (IC) 
publishes monthly and yearly foreign investment approval 
statistics by industry and by country.  The Central Bank of 
the ROC (Taiwan) (CBT) publishes foreign direct investment 
arrivals on a quarterly and yearly basis.  CBT data, 
contained in balance-of-payments (BOP) statistics, are not 
further classified by industry or country. 
 
¶48.  In 2006, strong recovery of Taiwan's export sector far 
offset adverse effects of delinquent credit/cash card debt 
problems which dampened private consumption in the first half 
of the year.  Growth in exports, which account for over 60% 
of Taiwan's GDP, accelerated from 8.8% in 2005 to 13% in 
2006, driving Taiwan's 2006 real GDP growth to nearly 5%, 
from 4.2% in 2005. 
 
¶49.  Unexpectedly strong economic performance in the second 
half of 2007 prompted both domestic and foreign forecasters 
to raise Taiwan's 2007 real GDP growth estimates to 5.2-5.5%. 
 The official estimate is 5.46%.  Year-on-year export growth 
increased from 7.6% in the fourth quarter of 2006 to 14.4% in 
October-November 2007.  Meanwhile, growth in export orders 
rose from 9.6% to 17.6%, and growth in manufacturing 
production accelerated from 0.5% to a three-and-a-half-year 
high of nearly 15%.  Most Taiwan forecasters anticipate that 
Taiwan's economic growth in 2008 will slow to below 4.5%. 
They believe that the U.S. sub-prime mortgage problem, as 
well as higher international prices for oil and grains, will 
dampen world economic performance and reduce demand for 
products from the export-oriented economy of Taiwan.  In the 
first eleven months of 2007, approved FDI increased 20% 
year-on-year to US$14 billion.  Approved FDI was concentrated 
in banking, trade, electronics, basic metal, and nonmetallic 
products.  These five categories accounted for nearly 80% of 
total approved FDI. 
 
¶50.  Approved direct investment in electronics industries 
(including communications, semiconductor, TFT-LCD and other 
optical electronic projects) increased from 6.4% of total 
approved FDI prior to 1995 and 19% in 1996-2000 to 24.5% in 
2001-2005 and further to 47% in 2006.  Meanwhile, the 
percentage share for financial services increased from 7.6% 
prior to 1995 and 22% in 1996-2000 to 25.6% in 2001-2005 and 
34% in 2006.   Nearly 80% of the approved inbound direct 
investment in Taiwan,s electronics industries came from the 
United States, Europe and Japan. 
 
¶51.  The United States and Japan used to be the two main 
sources of Taiwan's foreign investment, but have been 
replaced by the tax havens in the British Territories in 
America (BTA), which harbor a growing number of multinational 
corporations (many with roots in Taiwan).  According to 
official Taiwan statistics, approvals for U.S. investment 
from 1952 to 2006 totaled US$15 billion (US16.1 billion 
according to official U.S. figures), or 19% of total foreign 
investment.  Of total U.S. investment, 32% was directed 
toward the electronics and electrical industries, and 44% 
 
TAIPEI 00000076  012 OF 019 
 
 
toward the service sector.  Approvals for Japanese investment 
amounted to US$14 billion, or 18% of total foreign 
investment, of which 31% was in electronics and electrical 
industries and 34% in the service sector.  In 2006, new EU 
investment exceeded that of the United States or Japan due to 
a major holdings transfer by the Philips Company. 
 
¶52.  Approvals for investment from the BTA surged steadily 
from US$76 million in 1994 to US$1.2 billion in 1999 when the 
BTA surpassed the United States and Japan to become the 
largest source of foreign investment in Taiwan.  Investment 
from the BTA during 1999-2005 accounted for 27% of total 
approved investments, compared to 18% from the United States, 
another 18% from Europe, and 15% from Japan.  In 2006, a 
holdings transfer by the Philips Company drove down the BTA's 
share to 16.5%, the United States' share to 19% and Japan's 
share to 18%, while Europe's share reached 21.6%.  One 
quarter of the investment from the BTA was directed towards 
financial services and another quarter to the electronic and 
electrical industries. 
 
¶53.  As a relatively open and liberal economy, Taiwan 
receives foreign investment while its businesses invest 
overseas, especially in China, Southeast Asia and the 
Americas.  According to balance-of-payments statistics 
compiled by the central bank, outbound direct investment has 
exceeded inbound direct investment every year since 1988. 
According to IC statistics, by 2006, cumulative approvals for 
outbound investments totaled US$103.7 billion.  The main 
recipient of Taiwan investment has been China, which has 
received over half of Taiwan,s outbound investment. 
Approved investments in China increased by 27% in 2006 when 
64% of Taiwan's new overseas investment went to China. 
 
¶54.  Taiwan business firms started to relocate their 
production bases to China in the late 1980s.  Production 
lines in China gradually shifted from cheap labor-oriented 
industries in the late 1980s to products requiring lower-end 
technologies, such as PCs and motherboards, in the early 
2000s.  The WTO accession of China and Taiwan in 2002 
prompted Taiwanese business firms to accelerate relocation to 
China to sharpen their competitive edge in exports.  Taiwan 
factories based in China use the lower labor and land costs 
to process Taiwan-made production inputs into finished goods 
for exports to such industrial markets as the United States, 
Japan and Europe, and also for final sale in China.  Rising 
labor and land costs in China have prompted some Taiwan firms 
to move from China to nations in South and Southeast Asia, 
including Vietnam. 
 
¶56.  Taiwan's annual registered direct investment across the 
Taiwan Strait grew from US$1.25 billion in 1999 to US$6.0 
billion in 2005 and US$7.6 billion in 2006.  As a result of 
this trend Taiwan factories, primarily those based in China 
and Vietnam, produced nearly 50% of export orders received by 
Taiwan companies, headquarters by November 2007, up from 
11.5% in early 2000, and 2007 ratio reached 85% for 
information technology (IT) firms.  Greater China (China plus 
Hong Kong) replaced the United States as Taiwan's largest 
export market in 2001, and Greater China's share of Taiwan's 
exports in the first 11 months of 2007 reached 41%, much 
higher than the 13% for the United States and 11% for the 
European Union. 
 
Table 1 
Foreign Investment Approvals by Year and by Area 
(1952-2006) (unit: US$ million) 
 
 
TAIPEI 00000076  013 OF 019 
 
 
                       Central        Hong 
Year    U.S.A.  Japan  America  Europe Kong  Other  Total 
------- ------- -----  ------- ------ ----- ------ ------ 
52-89    3,067  2,983     341   1,312 1,198  2,049 10,950 
1990       581    839      66     283   236    297  2,302 
1991       612    535      60     165   129    277  1,778 
1992       220    421      37     165   213    405  1,461 
1993       235    278      38     214   169    279  1,213 
1994       327    396      76     245   251    336  1,631 
1995     1,304    573     151     338   147    412  2,925 
1996       489    546     417     198   267    544  2,461 
1997       491    854     659     407   237  1,618  4,267 
1998       952    540     711     371   275    890  3,739 
1999     1,145    514   1,216     462   161    734  4,231 
2000     1,329    733   2,300   1,213   271  1,762  7,608 
2001       940    685   1,397   1,184   145    778  5,129 
2002       600    609     803     612    66    582  3,272 
2003       687    726     920     644    45    555  3,576 
2004       362    827     897     965   192    710  3,952 
2005       804    724   1,094     685   104    817  4,228 
2006       883  1,591   1,786   7,510   119  2,080 13,969 
52-06   15,028 14,374  12,967  16,973 4,223 15,125 78,691 
--------------------------------------------- --------- 
Source: Investment Commission 
 
Table 2 
Foreign Investment Approvals by Industry and Area 
(1952-2006) (unit: US$ million) 
 
                  Central           Hong 
Industry    U.S.A.      Japan America     Europe      Kong 
Other Total 
--------    ------      ----- -------     ------      ---- 
----- ----- 
 
Total 15,028      14,374      12,967      16,973      4,223 
15,125      78,691 
 
Electronic Parts 
and Components    1,758 1,526 1,512 5,871 53    919   11,638 
 
Trade 1,406 1,501 1,373 1,373 421   1,486 7,561 
 
Banking     1,102 221   1,253 2,195 367   2,407 7,544 
 
Professional, 
S&T Services      716   1,353 1,226 651   386   1,478 5,810 
 
Electrical 
Machinery   2,166 1,708 376   462   382   370   5,463 
 
Information & 
Communications    930   1,167 1,483 169   253   986   4,988 
 
Chemicals   1,554 984   324   1,154 288   412   4,717 
 
Financing 
Investment  252   323   1,939 985   41    1,122 4,662 
 
Transportation, 
Storage and 
Communications    845   135   663   170   262   1,811 3,886 
 
Insurance   1,176 266   3     1,336 232   143   3,156 
 
Basic Metal 
Fabricating 395   798   222   129   119   907   2,569 
 
 
TAIPEI 00000076  014 OF 019 
 
 
Machinery Equipment     434   931   302   223   135   374 
2,400 
 
Electricity, Gas, 
Water and 
Construction      233   493   502   397   163   288   2,076 
 
Hotels & 
Restaurants 267   640   94    296   274   186   1,758 
 
Foods 262   281   118   347   127   419   1,554 
 
Securities and 
Futures     357   59    125   341   82    101   1,065 
 
Transport Equipment     102   551   115   74    98    71 
1,012 
 
Real Estate 116   176   134   137   10    146   719 
 
Others      958   1,259 1,205 667   528   1,495 6,112 
 
Source: Investment Commission 
 
Table 3 
Outbound Investment Approvals by Year and by Area 
(1952-2006) (unit: US$ million) 
 
                    Central 
Year         China  America  U.S.A.  ASEAN  Others   Total 
----------  ------- -------  ------  -----  ------ -------- 
1952-89       n.a.      76      865    429    155    1,525 
1990          n.a.     170      429    567    387    1,552 
1991           174     268      298    720    370    1,830 
1992           247     239      193    309    146    1,134 
1993         1,140     194      529    434    504    2,801 
            (2,028)                                 (2,028) 
1994           962     569      144    398    506    2,579 
1995         1,093     370      248    326    413    2,450 
1996         1,229     809      271    587    498    3,395 
1997         1,614   1,051      547    641    654    4,508 
            (2,720)                                 (2,720) 
1998         1,520   1,838      599    478    381    4,816 
              (515)                                   (515) 
1999         1,253   1,359      445    522    943    4,522 
2000         2,607   2,248      862    389  1,578    7,684 
2001         2,784   1,693    1,093    523  1,083    7,176 
2002         3,859   1,575      578    211  1,006    7,229 
            (2,864)                                 (2,864) 
2003         4,595   1,997      467    298  1,207    8,563 
            (3,104)                                 (3,104) 
2004         6,941   1,155      557    966    704   10,323 
2005         6,007   1,262      315    264    607    8,454 
2006         7,633   1,822      485  1,065    943   11,949 
1952-06     54,890  18,696    8,923  9,127 12,086  103,721 
--------------------------------------------- -------- 
Source: Investment Commission 
Note: Figures in parentheses refer to investments made prior 
to the specified year but not previously registered. 
 
Table 4 
Outbound Investment Approvals by Industry and by Area 
(1952-2006) (unit: US$ million) 
 
            Central 
Industry    China America     U.S.A.      ASEAN Other Total 
--------    ----- -------     ------      ----- ----- ----- 
 
 
TAIPEI 00000076  015 OF 019 
 
 
Total 54,890      18,696      8,923 9,127       12,086 
103,721 
 
Banking     29    9,383 713   635   3,098 13,858 
 
Electronic 
Parts and 
Components  7,934 383   1,272 2,465       1,217 13,271 
 
Information 
& Communi- 
cations     6,967 162   949   498   490   9,066 
 
Financing 
Investment  30    4,306 207   60    1,170 5,773 
 
Trade 1,676 1,416 1,029 423   1,201 5,745 
 
Electrical 
Machinery   4,979 129   123   249   136   5,617 
 
Chemicals   3,695 141   1,033 309   322   5,499 
 
Basic Metal 
Fabricating 4,295 81    96    227   228   4,927 
 
Textiles    2,359 29    489   1,514       386   4,777 
 
Plastics    2,770 599   413   90    441   4,312 
 
Non-metallic 
Minerals    2,711 97    202   213   241   3,465 
 
Professional 
& S&T 
Services    978   807   887   74    306   3,052 
 
Machinery   2,821 27    50    79    30    3,008 
 
Transport 
Equipment   1,903 53    173   166   363   2,657 
 
Foods 2,087 8     51    316   120   2,582 
 
Transport   454   173   117   269   1,356 2,369 
 
Precision 
Equipment   1,770 20    102   57    50    1,998 
 
Paper 
Products    1,141 7     16    156   46    1,365 
 
Wood 
Products    247   5     403   549   146   1,350 
 
Leather 
Products    918   107   0     60    5     1,090 
 
Real Estate 314   83    35    44    168   644 
 
Securities 
and Futures 2     340   3     82    171   598 
 
Insurance   202   0     0     0     34    236 
 
Others      4,605 338   561   593   360   6,457 
 
Source: Investment Commission 
 
TAIPEI 00000076  016 OF 019 
 
 
 
Table 5 
Technical Cooperation Projects by Year and by Area 
(1952-1995) (unit: number of projects) 
 
Year    Japan   U.S.A.   Europe   Others   Total 
------  -----   ------   ------   ------  ------- 
52-89   1,996     728      412     103    3,221 
1990      106      54       30      10      200 
1991       80      65       33       8      186 
1992      193      50       19      10      175 
1993       85      50       34      12      181 
1994       70      39       24       6      139 
1995       50      29       10       5       94 
52-95   2,483   1,015      562     136    4,196 
--------------------------------------------- ---- 
Source: Investment Commission 
Note: Taiwan ceased to compile statistics on technical 
cooperation with foreign companies in 1996. Businesses have 
not been required to report technical cooperation projects to 
the IC since the Statute for Technical Cooperation was 
abolished. 
 
Table 6 
Technical Cooperation Projects by Industry and by Area 
(1952-1995) (unit: number of projects) 
 
Year                   Japan  U.S.A.  Europe Others  Total 
------                 -----  ------  ------ ------ ------- 
Total                  2,483  1,015     562    136   4,196 
Electronics & 
  Electrical             708    416     106     16   1,246 
Chemicals                416    203     160     28     807 
Machinery                368     68      97      9     542 
Basic Metal & 
  Products               329     55      53      6     443 
Other Services           111    106      27     42     286 
Rubber Products          131     32      21      4     188 
Non-metallic Minerals     97     22      24      2     145 
Food and Beverage         80     38      13      9     140 
Textiles                  47     21       8      2      78 
Construction              38      5      10      4      57 
Garment & Footwear        18     14       4      3      39 
Paper Products & 
  Printing                19     13       4      0      36 
Transport Equipment       20      2       8      1      31 
Others                   101     20      27     10     149 
--------------------------------------------- -------- 
Source: Investment Commission 
 
Table 7 Major U.S. Investors in Taiwan 
--------------------------------------------- ------- 
U.S. Investor/ 
Local Investment                    Major Products 
----------------------------------  --------------- 
Amkor Technology Ltd./               integrated circuit 
Amkor Technology Taiwan             packaging and testing 
 
AIG/ 
Yageo Corp.                         electronic components 
Far East Air Transport Corp.        airlines 
Nan Shan Life Insurance Co.         insurance 
 
Pruco Insurance Group/ 
Masterlink Securities Co.           securities 
 
Corning Inc./                       substrate glass for 
Corning Glass Taiwan Co., Ltd.      TFT/LCD 
 
TAIPEI 00000076  017 OF 019 
 
 
 
GTE-Verizon 
Taiwan Fixed Network Telecom        fixed-line and mobile 
Taiwan Cellular Corp.               phone service 
 
Carlyle Group/ 
Eastern Technology                  cable TV 
Ta Chong Commercial Bank            banking 
 
Ensite Limited (Ford Motor)/ 
Ford Lio Ho Motor Co.               autos 
 
Texas Instruments Inc. 
Texas Instruments Taiwan Ltd.       semiconductor 
 
AMOCO Chemical Corp./ 
China American Petrochemical Co.    petrochemicals 
 
E.I. Dupont De Nemours/             industrial, electronic, 
Dupont Taiwan Ltd.                  agricultural goods 
 
IBM Corp./                          computers: 
IBM Taiwan Ltd.                     sales and service 
 
AETNA Life Insurance Co./ 
Taiwan Branch                       insurance 
 
View Sonic Co./                     mobile phone service 
Taiwan PCS Network Inc. 
 
UPS International/                  worldwide express 
UPS, Taiwan Branch                  service 
 
Intel Inc./InteX. Co.               ADSL chipset 
 
Applied Materials Ltd./             semiconductor mfg. 
Applied Materials Taiwan Ltd.       equipment 
 
General Motors Co./                 auto assembly & 
Yulon GM Motor Co.                  sales 
 
GE Consumer Finance/                banking 
Cosmos Bank 
 
Jabil Circuit Inc./                 telecom components 
Taiwan Green Point Enterprise Co. 
 
Citibank/                           banking 
Citibank (Taiwan) 
Bank of Overseas Chinese 
 
Oaktree Capital Management Co./     golf club head & 
Fu Sheng Industrial Co.             compressor 
 
Fairchild Semiconductor Co./        power management 
System General Corp.                products 
 
AIU Insurance Co./                  insurance 
Central Insurance Co. 
--------------------------------------------- -------- 
 
Table 8  Major Japanese Investments in Taiwan 
--------------------------------------------- -------- 
Japanese Investors/Investment           Major Products 
-------------------------------------   ---------------- 
Toppan Printing Co./                     color filter 
Toppan Electronics (Taiwan) Co.          sakes and 
Toppan CFI (Taiwan ) Co.                 production 
 
TAIPEI 00000076  018 OF 019 
 
 
 
Nippon Sheet Glass Co./                  auto glass 
Taiwan Auto Glass Industry Co.           and substrate 
Nippon Sheet Glass (Taiwan)              glass Ltd. 
 
Asahi Glass Co. (AGC)/ 
Asahi Glass (Taiwan) Co.                 substrate glass 
 
NTT DoCoMo/ 
Far Eastone Telecom. Co.                 phone service 
 
Taiwan Shinkansen Corp./ 
Taiwan High Speed Rail Corp.             high-speed rail 
 
Nissan Motor/Yulon Motor                 autos 
 
Toyota Motor/Kuozui Motor                autos 
 
Matsushita Electronic Co./               electrical 
Matsushita Electronic (Taiwan) Co.       appliances 
 
Hitachi Co./                             electrical 
Taiwan Hitachi Co., Ltd.                 appliances and 
Kaohsiung Hitachi electronics Co., Ltd.  components 
 
Yamaha Motor Co., Ltd./ 
Yamaha Motor Taiwan Co., Ltd.            motorcycles 
 
Sankyo Co./Sankyo Co. Taipei             pharmaceuticals 
 
Idemitsu Co./Shinkong Idemitsu Corp.     petrochemicals 
 
Mitsui Co./Mitsui (Taiwan)               trading 
 
Takashimaya Co./Ta-ya Takashimaya        department store 
Dept. store 
 
Sumitomo Co./Sumitomo (Taiwan)           trading 
 
Toshiba Co./Toshiba Compressor (Taiwan)  compressor 
 
Sadagawa Steel Co./Sheng Yu Steel Co.    steel 
 
Shin-Etsu Handotai Co./Shi-Etsu Handotai 
Taiwan Co.                               semiconductor 
 
Sumco Techxiv Co./                       silicon wafer 
Formosa Sumco Technology Co. 
 
Mitsui Mining & Smelting Co./ 
Taiwan Copper Foil Co.                   copper foil 
 
Kirin Brewery Co./ 
Taiwan Kirin Co.                         beer sales 
 
Nomura Securities/                       banking 
Taishin Financial Holdings 
 
Shinsei Bank/                            banking 
Jih Sun Financial Holdings 
 
Nippon Life Insurance Co./               banking 
Shin Kong Financial Holdings Co. 
--------------------------------------------- -------- 
 
Table 9  Major European Investments in Taiwan 
--------------------------------------------- -------- 
European Investors/Investment           Major Products 
 
TAIPEI 00000076  019 OF 019 
 
 
-------------------------------------   -------------- 
Saberasu Investments Co./               assets 
Cerberus Asset Management Co.           management 
 
Goldman Sachs/                          securities 
Goldman Sachs, Taipei branch            underwriting 
 
Deutsche Telecom/                       fixed-line 
Eastern Broadband Telecom               service 
 
Volkswagen Ag/Ching Chung Motor Co.     autos 
 
Dresdner Bank Ag/                         securities 
Grand Cathay Securities 
 
Imperial Chemical Inc./ICI Taiwan Ltd.  chemicals 
 
N.V. Philips/                             electronics 
Philips Electronics (Taiwan) 
 
Alcatel Co./Alcatel Taisel Co.          switch boards 
 
Horwood Investment/                       petrochemicals 
Chi Mei Industry Co. 
 
H.S. Development & Finance/ChinaTrust   banking 
Commercial Bank 
 
Qimonda Inc./ 
Inotera Co.                             DRAM 
 
Isenbourg-sgp, Lda/ 
RT-Mart International Ltd.              shopping malls 
 
Standard Chartered Bank/                banking 
Standard Chartered Bank, Taiwan 
 
SKF Co./                                ball screw, 
ABBA Liner Tech Co.                     liner guideway 
 
Longreach Edith Investment Co./         banking 
En Tie Commercial Bank 
 
CVC Capital/                            custom-made 
NienMade Enterprise Co.                 shutter/blinds 
 
CMA CGM/                                shipping service 
CNC Line 
--------------------------------------------- -------- 
YOUNG 
YOUNG