Taiwan

	Score	Rank
Financial Standards Index	17.50 out of 100	81
Business Indicator Index	8.65 out of 12	50

Business Indicators Summary

With an overall score of 8.65/12, Taiwan is progressing toward standard on the economic, legal, and political indicators that make up our Business Index. Taiwan can be categorized as a mature market economy with the government playing an active and sometimes dominant role. Taiwan encourages foreign investment and provides equal treatment to foreign and domestic investors, although it does maintain a list of industries closed to foreign investment in order to safeguard national security and environmental protection. The country also provides a variety of investment incentives, including accelerated depreciation and tax credits for investments in emerging or strategic industries, pollution-control systems, production automation, and energy conservation.. Property rights and contract laws are established, and Taiwan continues to improve its Intellectual Property Rights legal regime and enforcement, which are found to be lacking. Corruption is of no concern in the country, as reflected in the good standing in the Transparency International's Corruption Perception Index.

Business Indicators

Economic Model
Forex Regulations
- Capital Controls
- Exchange Controls
Foreign Investment Law
Trade Regulation
Tax Regime
Tax Rates
Bankruptcy Indicators
International Dispute Settlement
Political Environment
Political Stability
Corruption
Adherence to global labor standards

Economic ModelMarket-based economy

The 2009 Economic Freedom of the World Annual Report by Gwartney et al. calculates a score of 7 (out of 10, with a higher value signifying greater economic freedom) for the factor "Government Enterprises and Investment" as a percentage of total investment for Taiwan. The country received this rating because government investment was between 20 percent and 30 percent of the total in State-owned Enterprises and was a major player in various sectors, including retail sales.

Per the 2009 U.S. Department of State's background note on Taiwan, the country has gone from an underdeveloped and agricultural economy to an economic power that is a leading producer of advanced technology products, in over 50 years of growth and advancement. Further, the U.S. Department of Commerce indicates that Taiwan is a sophisticated market, and is one of the world's leading manufacturing hubs for advanced information technology. The island's market is known to offer high-quality and differentiated products.

The 2009 Heritage Foundation Index of Economic Freedom indicates that total government expenditures, including consumption and transfer payments, are low. In the most recent year for which data is available, government spending represented 18.8 percent of GDP. Although the economy has been liberalized through privatization and deregulation, the government still has a dominant and active role in the country's economic affairs.

Sources

Gwartney, J., et al., "Economic Freedom of the World - 2009 Annual Report," September 2009. Available from Frazer Institute website. Accessed on December 18, 2009. (Gwartney et al. 2009)
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Heritage Foundation, "2009 Index of Economic Freedom," 2009. Available from Heritage Foundation website. Accessed on December 18, 2009. (HF 2009)
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U.S. Department of Commerce, "Doing Business in Taiwan: A Country Commercial Guide for U.S. Companies," February 2009. Available from U.S. & Foreign Commercial Service and U.S. Department of State website. Accessed on December 18, 2008. (U.S. DoC 2009)
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U.S. Department of State, "Background Note: Taiwan," October 2009. Available from U.S. Department of State website. Accessed on December 18, 2009. (U.S. DoS 2009)
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