taiwan’s - 台灣智慧航空城產業聯盟

Taiwan’s

Free Economic Pilot Zones

National Development Council

March 2014

2 / 28 Executive Yuan Free Economic Pilot Zones

Outline

Introduction

Ideas and Goals

Strategies

Target Activities

Location and Time Line

Concluding Remarks


Introduction (1/2)

Currently major economies are aggressively

speeding up signing FTA in order to lower

trade barriers and attract investments.

Taiwan has only completed signing of 7 FTAs

so far, far less than its competitors did.

Taiwan has to respond actively and efficiently

in order to avoid marginalization under the

wave of economic liberalization.


Introduction (2/2)

Free Economic Pilot Zones (FEPZs) for

furthering Taiwan’s economic liberalization

Why does Taiwan still need special zones?

FEPZs are different from the conventional

“Export Processing Zones” or “Science Parks”

FEPZs focusing on economic deregulation and

institutional innovation.

Ideas and Goals


Key Ideas

Liberalization: Deregulation, market

opening

Internationalization: Institutional reform,

international alignment

Forward looking: Industries with new

business models


Ultimate Goal

FEPZs as “trial” and “pioneer” areas

To demonstrate the usefulness/benefits of

economic liberalization and

internationalization

From partial to general

From small-scale to large-scale

Ultimate goal:

Toward a free economic island

Strategies


Strategies

Promoting the free movement of people, goods, and money

Opening market to align with other economies

Providing Tax incentives and convenient land acquisition

Promoting cross-border industrial cooperation

Building a high-quality business operating environment


Facilitating Overseas Professionals Movement

FEPZs

Foreign

professionals

Exempt from filing

overseas income for tax

Only half of income taxable

for the first 3 years

Landing visa

Short-term

Mainland

Chinese

professionals

Exempt from review on

business stay

3-year multiple-entry permits

Foreign and

Mainland Chinese

professionals

Long-term


Allowing firms of lawyers, accountants and

architects to be operated in FEPZs under the

organization form of corporation

Permitting foreign lawyers, accountants and

architects or foreign firms to invest in or form

partnerships in the FEPZs. Their business

scope is restricted to FEPZ Businesses and

overseas business

Professional licenses issued by the ROC

government are still needed for foreign lawyers,

accountants and architects when practicing in

Taiwan

Opening of Professional Services


Tax Incentives

For business

Tax exemption overseas profits repatriated to Taiwan by overseas

Taiwanese companies for real investment in FEPZs

agricultural and industrial raw materials

goods exported after storage and simple processing in FEPZs (but if sold to domestic market, only 10% exempted)

For foreign professionals

Tax exemption

income earned overseas

half of first-3-year’s income

Target Activities


Main: High-value-added service Industries

Subsidiary: Manufacturing industries that can

promote service industries

Smart Logistics

International Health Care

Value-added Agriculture

Financial Services:

e.g. Wealth and Asset Management

Education Innovation

More industries will be included.

Target Activities (1/6)



Smart Logistics

Promoting faster and freer goods flows and

increasing the value-added of goods with top

logistics services, enabled by innovative customs

administration and information clouds

Introducing “shop onsite factory offsite” business

model

Scope & level of processing will be expanded

Wider profits will be generated by linking with

neighboring clusters



International Health Care

Simplifying entry procedures for foreign and

mainland Chinese visitors

Setting up international medical service centers

to provide medical consultation and hospital

liaison services

Establishing “International Healthcare Industrial

Park” to promote industries such as medical

care, biotechnology, pharmaceuticals,

rehabilitative care, health enhancement etc.


Targeted Activities (4/6)

Value-Added Agriculture

Fully utilizing Taiwan’s sophisticated agricultural

technologies and talents to Innovate agricultural

products

Increasing agriculture value-added by extending

whole value chain from individual products

Marketing Taiwan’s innovative agricultural

products under MIT brands worldwide

Example: Ornamental Fish



Example: Ornamental Fish

Annual global trade amount: US$6 billion

By including fish feed, aquarium box, LED light

etc., market expanded to US$15 billion

Thanks to “inside territory, outside customs”

mechanism of FEPZs, originally banned fishes

now can be imported to FEPZs

The imported fishes, after cultivation, quarantine

etc., will be exported worldwide with fishes and

peripheral equipment originated from Taiwan



Financial Services

Allowing financial institutions to develop wealth

and asset management services under grading-

based differentiated management

OBUs and OSUs acting as the main sales

channels in providing various kinds of financial

products and services to non-residents

Restrictions on scope and categories of trust

investment and derivative products will be

greatly relaxed



Education Innovation

Encouraging cooperation between domestic and

overseas universities to set up university branch

schools or departments, independent academies,

degree courses or professional programs

Relaxing rules and conditions for school

establishment and operation, student enrollment,

staff recruitment, etc.

Priority is given to degree courses and

professional programs

Locations & Time Line


Double-track implementation mechanism

Physical

(shop

onsite )

Designated

test-point

mode

(factory offsite)

Location can be

defined

geographically

Differentiated

administration

based on grading

Pilot models to

be defined by

competent

authorities

Not feasible for

implementation

in physical

areas

Differentiated

administration

based on

grading

Focusing on

deregulation

and institutional

reform

Any location

outside the zone

Outsourced

processing


Physical Locations

Phase I

7 FTZs & 1 agri-

biotech park

Extending FTZs by

“shop onsite, factory

offsite” operation

Taipei Port FTZ

Pingtung Agricultural

Biotechnology Park

Anping Port FTZ

Kaohsiung Port FTZ

Keelung

Port FTZ Taoyuan Airport FTZ

Su’ao Port

FTZ Taichung Port FTZ


Time Line

PHASE 1 PHASE 2 PLANNING

FEPZ’s Framework

approved on Apr.

29, 2013

Action Plan

approved on

Aug. 16, 2013

2013

Amendment of

13 regulations to

be completed by

Dec. 2013

Special Act submitted

to Executive Yuan for

approval in Oct. 2013

Special Act reviewed

by Legislative Yuan

Special Act

enacted

2014


Single Window

Project managers will assist FEPZ businesses in

administrative and regulatory matters.

Tax Land

acquisition

and use

Business

registration

Comprehensive

single window

services

Construction

Labor

administration,

safety and

hygiene Environment

protection


Private investment to increase by NT$21 billion in 2014

Gross output to increase by NT$30 billion in 2014

Creating 13,000 new jobs in 2014

FTZs to see trade value multiplying and surpassing NT$1 trillion in 2015

New business models

Preparing us for joining TPP and RCEP talks

Potential Benefits


Concluding Remarks

The FEPZs Plan is to prepare Taiwan for further economic liberalization and internationalization.

FEPZs include but are not limited to 8 FEPZs; more FEPZs will be set up in the future.

FEPZs will accelerate Taiwan’s efforts in joining regional trade blocs such as TPP and RCEP.

We welcome new ideas and proposals that can be applied to FEPZs.


Contact Details

For enquiry or services, please contact

InvestTaiwan Service Center

Address 8F, 1 Xiangyang Road, Taipei 10046, Taiwan

Tel 886-2-2311-2070

e-mail [email protected]

For more information, please visit

www.fepz.org.tw

mailto:[email protected]





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