Gateways into mainland China
Greater China is a term often used to refer to the collective regions of mainland China, Hong Kong/ Macau and Taiwan, as these regions share close business, ethnic, political and cultural connections. Business opportunities in these regions should not be overlooked, and while companies should really treat these markets as separate, Hong Kong/Macau and Taiwan may also provide a gateway to business success in mainland China, as well as in the wider Asia-Pacific region.
An alternative to plunging straight into the Chinese market is to look closely at how Hong Kong might work as a first step into the region. Hong Kong has very similar business practises to the UK and with English being one of the primary languages spoken, it can be a less daunting prospect.
With one of the most open and business-friendly environments in the world, Hong Kong is the world's 8th largest trading economy and one of Asia's leading financial and business centres. Its per capita Gross Domestic Product at purchasing power parity ranks 5th highest in the world (2011), and in 2015 Hong Kong was again ranked as the world's freest economy in the Wall Street Journal and Heritage Foundation's Index of Economic Freedom – as it has for the past 21 consecutive years. See: http://www.heritage.org/index/ranking
Hong Kong offers excellent opportunities for UK companies and is a major centre for British business in the region. About 120 British companies have regional headquarters in Hong Kong. Another 210 have regional offices.
Benefits for British businesses exporting to Hong Kong include:
strong business links with the UK
common language and culture
strong intellectual property rights protection
well established rule of law
Hong Kong is an open economy and an international financial centre that acts as a conduit into and out of China for both goods and capital.
Hong Kong’s growth has averaged 4.5% over the last 10 years. The economy grew 2.5 % (year-on-year) in 2014. This is the slowest quarterly growth in 18 months and is the result of sluggish external demand and decelerating domestic consumption.
Trade and logistics, financial services, tourism and professional services are the traditional pillars of the economy. In recent years however, the Hong Kong Government has been promoting six new pillars of the economy, namely medical services, educational services, testing and certification, innovation and technology, creative industries and environmental technology. These sectors combined provide 57% of Hong Kong’s Gross Domestic Product (GDP). The services sector now accounts for 93% of Hong Kong’s GDP.
The economy was boosted by 54 million tourists in 2013 which included 40.5 million from Mainland China. This is equivalent to around 7 times Hong Kong’s population.
Hong Kong’s economy is separate from that of Mainland China, and has its own currency, legal system and taxation. However, Hong Kong’s economy is becoming increasingly connected with mainland China’s through the Closer Economic Partnership Agreement (CEPA). CEPA opens up huge markets for Hong Kong goods and services, greatly enhancing the already close economic cooperation and integration between the Mainland and Hong Kong. See: http://www.tid.gov.hk/english/cepa/cepa_overview.html for more information.
Free Trade Agreements (FTAs)
CEPA is the first free trade agreement ever concluded by mainland China and Hong Kong. It aims to liberalise markets for goods and services.
Hong Kong has signed a comprehensive FTA with the European Free Trade Association (EFTA). This agreement is Hong Kong’s first with the European economies. See: http://www.tid.gov.hk/english/trade_relations/hkefta/ for more information.
Hong Kong is ranked second in the World Bank’s Ease of Doing Business index. See: http://www.doingbusiness.org/rankings and presents fewer challenges for UK companies than most overseas markets.
Links with the mainland
The size and growth rate of the Mainland China market offers excellent opportunities for UK business and many companies use Hong Kong as a base for entering the mainland market.
Strengths of the Hong Kong market as a gateway to mainland China include:
base for regional operations
proximity to Pearl River Delta (PRD), an important Chinese region
largest investor in every province in China
main offshore centre for trading in Renminbi (RMB) Chinese currency
well regulated banking system
world’s busiest airport for international cargo
world’s third busiest container port
Since the 1997 handover Hong Kong has remained a prosperous business destination and there are ever-closer ties with the economic development of the Chinese mainland. A quarter of China’s trade passes through Hong Kong, which is also the largest investor in every province in China. Hong Kong companies were the first to move their manufacturing operations to the Pearl River Delta (PRD) region of China, and there are now over 70,000 Hong Kong companies in Guangdong Province alone, employing over 11 million people.
Guangdong Province is a growing market and home to the mainland’s wealthiest consumers. It is a substantial manufacturing base often called ‘The Workshop of the World’. As so many of these factories are Hong Kong owned and managed, there is a great deal of knowledge in Hong Kong about doing business in the PRD, Guangdong Province and other parts of China. UKTI Hong Kong, in partnership with the China Britain Business Council (CBBC) in Shenzhen and UKTI Guangzhou, also offer an Overseas Market Introduction Service specifically for the PRD region.
Whilst the size and growth rate of the Mainland China market offers excellent opportunities for UK businesses looking to internationalise, approaching the Mainland China market directly can be a daunting prospect. As a major services centre and gateway into China, Hong Kong is therefore a very attractive indirect route, offering the significant advantages of:
Easy Access – the Closer Economic Partnership Agreement (CEPA) between China and Hong Kong gives Hong Kong preferential access to China’s markets. UK companies can, in certain cases, take advantage of this.
Similar Business Systems – With similar legal and international business support services, excellent communication infrastructure, and English as the business language, doing business in Hong Kong is very similar to doing business in the UK.
Transparent Government – An easy place to do business: strong rule of law; open, transparent Government and free flow of information.
Intellectual Property Protection – IPR laws in Hong Kong are based on UK law and their enforcement is more attractive for companies with high-value intellectual property.
Proximity – The Pearl River Delta (PRD), one of the key economic regions of China often cited as “the workshop of the world”, is easily accessible by excellent rail, road and air transport links, and it is easy to make day trips from Hong Kong.
Knowledge – Hong Kong agents and distributors with their existing business links, extensive experience, common language and culture are excellent partners for UK firms wanting to access China.
A Gateway to South-East Asia
As well as being a major market in its own right, Hong Kong is an excellent trading gateway not just to mainland China but also to the wider Asia-Pacific region. Hong Kong is:
situated in a central position between East and South-East Asia
within five hours flying time of half the world’s population
leading telecommunications hub for Asia Pacific region
a major base for the regional operations of international businesses
the second largest private equity centre in Asia
the second largest stock market in Asia and the sixth largest in the world
Hong Kong is the second largest Foreign Direct Investment (FDI) recipient in Asia after mainland China, a position it has held for 15 consecutive years.
Opportunities in Hong Kong
Opportunities exist for UK companies in many business sectors in Hong Kong, ranging from construction to consumer goods, education and training to advanced engineering.
Building a greener city, improving the quality of urban space, harbour front enhancement and heritage adaptation are also high on the agenda. These projects offer solid opportunities not just to UK firms in the construction sector, but also to those in creative industries, leisure and tourism and environmental services.
UK Trade and Investment (UKTI) publish over 1,000 business opportunities per month across all sectors and over 100 markets. Sign up to receive regular business opportunities alerts at: http://www.businessopportunities.ukti.gov.uk/home.html?guid=none
Visit the website of the Treasury Branch of the Financial Services and Treasury Bureau for details of government tenders for goods and services at: http://www.fstb.gov.hk/tb/en/information-on-government-tender.htm. The site also provides a guide to government procurement in Hong Kong.
High Value Opportunities in Hong Kong
A number of Major Infrastructure Projects are currently underway, with £29 billion of investment scheduled up to 2015-16. UKTI has identified seven High Value Opportunities (HVOs) for British business in Hong Kong with opportunities worth well over £5 billion a year. The UK has had considerable success in the past principally in design, consulting and project management. There is also a strong focus on supply chain opportunities that exist within these project life cycles:
1. Hong Kong Airport
Hong Kong’s Chek Lap Kok international airport was opened in 1998. However, it’s already reaching capacity as the region becomes a major global hub for business, trade and tourism.
A third runway expansion has been commissioned, at a cost of over £11 billion, to increase capacity beyond 2030. It’s a large scale project with an estimated completion date of 2023.
Project requirements include:
reclamation of 650 hectares of land
construction of the third runway and related taxi systems
development of navigation aids and airport facilities
extension of terminal 2
development of the midfield freighter apron
new baggage handling systems
Contact UKTI Hong Kong at firstname.lastname@example.org for more information on opportunities at Hong Kong’s airport.
Hong Kong’s government is currently developing a strategy to tackle environmental issues. This is through the development of schemes for:
Organic Waste Treatment Facilities (OWTF)
integrated waste management facilities
electric vehicles and their associated support infrastructure
Harbour Area Treatment Scheme (HATS)
Contact UKTI Hong Kong at email@example.com for more information on environmental opportunities.
Hong Kong has a rapidly aging population. It’s interested in increasing cooperation on healthcare offering strong commercial opportunities for UK companies.
Increased dialogue and research collaboration between the UK, Hong Kong and Mainland China can also lead to longer-term opportunities.
Opportunities to develop partnerships include:
hospital building and redevelopment projects worth £4.9 billion (from now to 2022)
promotion of UK expertise present in Hong Kong to win business in PRD region of Mainland China
Contact UKTI Hong Kong at firstname.lastname@example.org for more information on healthcare opportunities.
4. Kai Tak Development (KTD)
KTD is a huge and highly complex urban regeneration development project. It’s being transformed into a green and quality environment with major sporting, leisure and tourism facilities. It spans 320 hectares covering the:
former Hong Kong airport site
adjoining hinterland districts of Kowloon City, Wong Tai Sin and Kwun Tong
The scheme includes an international cruise terminal. Construction is now in the final stage, but a second berth will be commissioned this year.
Other major projects include:
‘hotel belt’ with six potential sites for high-end hotels adjacent to the cruise terminal
elevated monorail system
landscaped open spaces
Sector opportunities: Construction, engineering, financial services, logistics, environment.
Contact UKTI Hong Kong at email@example.com for more information on opportunities at KTD.
5. West Kowloon Cultural District (WKCD)
WKCD is one of the world’s largest cultural projects which covers 40 hectares. It will comprise 17 venues under the management of the West Kowloon Cultural District Authority including:
a new museum of visual culture
other performance venues
large green space
UK companies are directly involved across the supply chain for this project.
Opportunities for UK companies include:
design and installation of entertainment attractions
audio visual technologies
digital media content, audience engagement and development
interpretation and exhibition design
artistic and cultural content
management and operation of world-class multi-use stadia and venues
Sector opportunities: Construction, creative industries, engineering, financial services.
Contact UKTI Hong Kong at firstname.lastname@example.org for more information on opportunities at WKCD.
6. Hong Kong-Zhuhai-Macau bridge
The 30 km long Hong Kong-Zhuhai-Macau bridge will be the longest sea bridge in the world when it is completed in 2016. It is one of the most technically complicated projects in transport history as it includes an underwater tunnel section.
The bridge will be a six-lane expressway. It will:
bring closer economic ties with the Pearl River Delta (PRD) region
allow 24/7 border crossings
Sector opportunities: Construction, logistics, engineering, financial services
Contact the UKTI team in Hong Kong at email@example.com for more information on opportunities relating to the Hong Kong-Zhuhai-Macau bridge.
The Shatin to Central link is a major railway network extension project consisting of two sections and the construction of ten new stations. The East-West line will run for 11 km between Tai Wan and Hung Hom. The North-South line will run 6 km between Hung Hom and Hong Kong Island.
Hong Kong has a 15 year railway development programme. Future plans include a:
South Island Line (West)
North Island Link
West Express Line linking Hong Kong International Airport with Shenzhen Airport
UK companies that get involved in these projects at an early stage can expect numerous follow-on opportunities.
Sector opportunities: Railway, construction, engineering, financial services
Contact the UKTI team in Hong Kong at firstname.lastname@example.org for more information on rail opportunities in Hong Kong.
In addition to the seven High Value Opportunities listed above, there are a number of other major projects where UK businesses could become involved, including:
The Guangzhou-Shenzhen-Hong Kong Express Railway Link – part of the high-speed railway that connects Hong Kong with Guangzhou. The travel time between the two cities will be reduced to 48 minutes upon completion. The Hong Kong section will be completely in tunnel;
The Tuen Mun Western Bypass and Tuen Mun-Chek Lap Kok Link – a 27.2 km-road partly in under-sea tunnels to connect Hong Kong’s airport with the western part of the New Territories to reduce the distance between the airport and the Hong Kong-Shenzhen border;
Hong Kong-Shenzhen Airport Co-operation – a 42 km-rail link to be built between the airports of Hong Kong and Shenzhen. This will foster better division of labour between the two airports, with the Hong Kong airport positioned as a hub for international flights and Shenzhen’s as a hub for domestic flights;
Hong Kong-Shenzhen Joint Development of the Lok Ma Chau Loop – an 84-hectare area on the bank of the Shenzhen River separating Hong Kong from Shenzhen, to be developed into a low-carbon community with a concentration of tertiary institutions and creative industries.
Similarly to Hong Kong, Macau is also administrated under the “one country, two systems” rule and the city-region offers opportunities in sectors such as gaming/leisure, tourism and infrastructure.
In parallel with the expansion of the gaming and tourism sectors, the construction and retail sectors in Macau have also experienced strong growth. Due to open late 2015 or early 2016, Wynn Macau Ltd will be home to the gaming operator’s first Cotai property with investment of around US $4 billion. Galaxy Entertainment Group announced recently that they will invest US $2.1 billion into phase two of Galaxy Macau, Cotai, with a scheduled completion for mid-2015. In addition to enlarging the gaming space, the retail boulevard will be expanded to more than 100,000 sq m.
As well as construction and retail, other significant areas of opportunity for UK companies in Macau are in the education and training, transport, ICT and environment sectors.
Hong Kong/Macau events, trade fairs and missions
UKTI Hong Kong can assist you before, during and after your visit to ensure you get the most out of your time in the market. Contact UKTI Hong Kong (see “Contacts” below) for details of upcoming missions to Hong Kong.
How to do business in Hong Kong
Most companies find that having a local business partner (such as an agent or distributor) is the most successful approach to start exporting successfully to Hong Kong. Licensing or franchising may also be viable options for some products and services. Throughout the process, personal relationships are considered very important, so a visit to Hong Kong early on is highly recommended. You may find that without visiting the market in person, you are unable to get very far in the process.
What companies should consider when doing business in Hong Kong
Hong Kong offers opportunities to UK companies across many sectors. If you are considering trying to enter the Hong Kong market, your first step should be to undertake research into the likely demand for your goods/services. UKTI advisers are well placed to help with this and your local office can discuss this with you in more depth.
Locations – Key areas for business in Hong Kong
Hong Kong's total land area is only 1,104 sq km (about 420 sq miles) and the vast majority of businesses are located in the densely populated urban areas. The urban areas can all be reached within an hour of each other by public transport. Hong Kong's government and the most prestigious business offices are located on the northern edge of Hong Kong Island. Other major business areas are Kowloon, and the new town of Shatin in the New Territories.
Hong Kong market entry and start-up considerations
The most appropriate and effective way to enter the Hong Kong market for your company and its goods/services will depend on a variety of factors. Your local UKTI office can advise you on how to commission a tailored report for your specific needs.
You should appoint an agent or distributor to successfully develop your business in Hong Kong. You will need to visit the market to establish a personal relationship with a business partner. Licensing or franchising may also be viable options for some products and services.
UK companies entering into agreements in Hong Kong should take professional legal advice.
The legal framework in Hong Kong is very similar to that of the UK. Many of the lawyers operating in Hong Kong have been trained in the UK and almost all are fluent in English.
You can find a full list of lawyers operating in Hong Kong and the areas they cover see The Law Society of Hong Kong’s website at: http://www.hklawsoc.org.hk/pub_e/lawfirmdirectory/
Standards and technical regulations
The Hong Kong Customs and Excise Department is responsible for consumer protection for consumer goods, toys and children’s products.
The Hong Kong Centre for Food Safety provides information on regulations relating to food and drugs labelling. See: http://www.cfs.gov.hk/english/food_leg/food_leg_nl_guidance.html
Pre-packaged foods must be labelled with mandatory nutritional information. Any nutritional claims about the contents must comply with the regulations. Food and formula consumed by children under the age of 36 months and food for special dietary uses are exempt.
Hong Kong Tax
Hong Kong has one of the lowest tax rates and simplest tax structures in the world. There are only three direct taxes – on profits, salaries and property, none of which exceed 17% and with multiple deductions. There is no VAT or sales tax.
The Hong Kong Inland Revenue Department gives clear instructions on payment and procedures relating to tax. See: http://www.ird.gov.hk/eng/welcome.htm
Hong Kong Customs
Hong Kong Customs and Excise Department generally carries out inspections quickly and efficiently, and as a result goods are rarely held up on entry to Hong Kong. Hong Kong is a free port and goods are not subject to import duty with the exception of liquors (30% and above alcohol by volume), tobacco, hydrocarbon oil and methyl alcohol. If you are importing these items you will need to obtain an import and export licence from the Customs and Excise Department, and you will also need a removal permit should you wish to re-export them.
There are a number of goods which cannot be imported without a licence, but are not subject to duty. These include pharmaceutical products and certain foodstuffs. You can find a full list of these items on the Customs and Excise Department website. See: http://www.customs.gov.hk/
UK passport holders do not require a visa to enter Hong Kong. As a visitor you can normally be allowed to stay for up to 90 days. You can get a visa or entry permit to work in Hong Kong via the Hong Kong Immigration Service: http://www.immd.gov.hk/eng/services/visas/visit-transit/visit-visa-entry-permit.html
Hong Kong – Local regulations
Some businesses require a license or registration to operate, including restaurants, bars, banks, travel agencies, law firms, and others. You can get a complete list of licences required from the Business Licence Information Service of the Hong Kong Trade and Industry Department: https://www.success.tid.gov.hk/tid/eng/blics/index.jsp
Hong Kong – Responding to Tenders
Government tenders are published in the local press and on the Government Gazette at: http://www.gld.gov.hk/egazette/?lang=e&agree=0
UKTI reviews all tenders issued and publishes those they consider to offer opportunities for UK companies, on the UKTI portal under the "Business Opportunities" section. Notifications of new opportunities are automatically sent to companies which have registered their interest under the relevant category. However, the HK Government will not consider late tenders. This is a strict rule intended to prevent the possibility of corruption.
Recruiting and Retaining Staff in Hong Kong
A large pool of highly educated talent is available in Hong Kong for local employment, many of whom have a high level of English. An increasing number are also fluent in Mandarin Chinese, helping you open the door to opportunities in Mainland China. Employment regulations are straightforward with details available from the Labour Department.
There are numerous recruitment agencies in Hong Kong, many of them local branches of well-known international companies. Another route for recruitment is to place an advert in the Saturday edition of the South China Morning Post.
It is not unusual in Hong Kong for staff to change jobs frequently and in times of economic boom it can be difficult to retain staff.
Getting your Goods to Hong Kong
Hong Kong has the world's busiest airport for international cargoes and the world's third busiest container port so it follows that air and sea are the main routes for goods entering Hong Kong. There are numerous shipping companies that can help with the logistics of getting your goods to Hong Kong.
Hong Kong Intellectual Property Rights
The importance and need for protection of intellectual property (IP) has long been recognised in Hong Kong, and has been crucial in its development as an international trading centre. Hong Kong established its first trademark laws in 1873 – one of the world’s oldest laws of this kind.
Based on the ‘One Country Two Systems’ principal, Hong Kong’s laws and judicial system, including its regulations relating to IP, are independent from the Chinese system. Hong Kong’s law is based on the Common Law system, and its IP system is similarly based on the UK’s IP legislation. Hong Kong is also a member of the World Trade Organisation in its own right, thus bound by international agreements such as that on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The IP laws of Hong Kong are therefore familiar to UK companies and comply with international standards.
The Hong Kong SAR Government has a dedicated Intellectual Property Department (IPD: www.ipd.gov.hk) to handle registrations and concerns. The Customs and Excise Department (www.customs.gov.hk) is responsible for enforcement and conducts inspections at the border and investigations in the territory. Both departments work closely with their international counterparts to ensure the protection of international trade. The IPD provides electronic filing systems for all registrations. You may also search the respective databases online before filing to ensure acceptance of your application.
Hong Kong – Business Culture
In general, the business culture in Hong Kong is quite similar to western culture and people in Hong Kong are sufficiently familiar with Western customs to be tolerant of cultural differences.
Language in Hong Kong
The official languages of Hong Kong are Chinese (Cantonese dialect) and English. English is widely spoken in the business world and in urban areas of Hong Kong. When getting a taxi, it can be useful to have the address written in Chinese to show the taxi driver, although most taxi drivers are familiar with the English names of popular destinations.
In many fields, sales and marketing materials in English is sufficient, but in some cases, there may be advantages in having materials prepared in Chinese. The UKTI team in Hong Kong can give advice on this on a case-by-case basis. The traditional form of written Chinese is used in Hong Kong (on the Mainland the simplified form is used). Any Chinese language materials you prepare for the Hong Kong market should therefore use traditional Chinese – meaning any material prepared for the Mainland China market will not be suitable, and vice-versa.
Hong Kong – Negotiations
Face-to-face meetings and building relationships is considered important in Hong Kong and contacts may wish to meet you several times to get to know you before concluding negotiations. This may include meeting for meals as well as formal meetings in offices.
The giving and receiving of gifts is viewed as a way to build up relationships with business partners and clients. It is not necessary to give expensive gifts as it is the act of giving that is more important.
Hong Kong – What are the challenges?
Being one of the easiest places in the world to do business, Hong Kong generally presents less challenges for UK companies than most overseas markets. Corruption is not common and is considered a serious crime in Hong Kong, with a dedicated bureau (Independent Commission Against Corruption – ICAC) set up to tackle corruption through enforcement, prevention and community education.
Getting Paid in Hong Kong – Terms of Payment
Most UK companies who do business in Hong Kong find that they receive payments smoothly and to agreed timescales. Any companies experiencing difficulties getting paid should get legal advice locally.
For companies looking to open a bank account locally, most international firms operating in London will also have offices here, offering familiar service and a smooth transition. You should consider the wide range of options before choosing the most suitable for your business. Besides the branches of international institutions, there is also a multitude of local banks in Hong Kong. The banks can provide details on the documents necessary to open a company account.
Source: UKTI 2014
Hong Kong Contacts
If you have a specific export enquiry about the Hong Kong market which is not answered by the information in this guide, you may contact:
UK Trade & Investment
British Consulate-General Hong Kong
Assistant Trade Commissioner
1 Supreme Court Road, Hong Kong
Telephone: +852 2901 3360
Other Hong Kong Resources:
British Chamber of Commerce: www.britcham.com
Hong Kong Trade Development Council (HKTDC): http://www.hktdc.com/en-buyer/
Hong Kong Trade & Industry Department: https://www.success.tid.gov.hk/tid/eng/blics/index.jsp
Macau Trade and Investment Promotion Institute (IPIM): www.ipim.gov.mo
British Business Association of Macao (BBAM): www.britchammacao.org
Hong Kong Companies Registry: www.cr.gov.hk
Hong Kong Inland Revenue Department: www.ird.gov.hk
Hong Kong Immigration Department: www.immd.gov.hk
Hong Kong Labour Department: www.labour.gov.hk
Hong Kong Business License Information Service, Trade and Industry Department: www.success.tid.gov.hk/tid/eng/blics/index.jsp
Hong Kong Domain Name Registry: www.hkdnr.hk
Law Society of Hong Kong: http://www.hklawsoc.org.hk/pub_e/lawfirmdirectory/
Hong Kong Centre for Food Safety: http://www.cfs.gov.hk/eindex.html
Hong Kong Government Gazette: http://www.gld.gov.hk/egazette/?lang=e&agree=0
Hong Kong Customs: http://www.customs.gov.hk/
Hong Kong Intellectual Property Department: www.ipd.gov.hk
Taiwan is strategically located at the heart of the Asia Pacific region. Its economy is now the 27th largest in the world according to the Centre for Economics and Business Research (CEBR). Taiwan has averaged 6% annual growth in Gross Domestic Product (GDP) over the last three decades.
Taiwan is the 16th largest trading power in the world, according to the World Trade Organization (WTO), with an economy founded on high-tech and creative industries. The Economist Intelligence Unit (EIU) ranks Taiwan as the 13th best place in the world to do business to 2017.
Taiwan’s GDP is the 19th largest in the world on a purchasing power basis. Taiwanese have more disposable income than counterparts in Japan, France or the UK. Increasing wealth is resulting in a growth in consumption including demand for foreign imports. 40% of goods consumed are imported.
Benefits for UK companies
Taiwan rose to global economic recognition in the 1980s as one of the “Asian Tigers”. Having a stable legal system and financial industry, Taiwan has specific strength in offering competitive and innovative manufacturing solutions to global companies. With a high degree of global supply chain integration, UK companies may find Taiwan an attractive destination to provide value-added products and services.
Benefits for British businesses exporting to Taiwan include:
major platform for business with China
liberalisation of banking, insurance and securities sectors
offshore centre for the Renminbi (RMB), China’s official currency
high levels of consumer disposable income
sound legal environment with comprehensive protection of Intellectual Property Rights (IPR)
Strengths of the Taiwanese market include:
16th in the World Bank’s annual ‘Ease of Doing Business’ ranking
world’s biggest manufacturer of computer related products and semiconductors
logistics hub for the Asia-Pacific region
skilled workforce, abundant capital, and excellent innovation capabilities
more RMB deposits than anywhere else except Hong Kong
Links to mainland China
There is potential to leverage the considerable common ground on business, culture and language that the Taiwanese share with the mainland and other Asian countries.
Taiwan is a major investor in China with more than 70,000 Taiwanese companies operating on the mainland. Up to 70% of Chinese electronics are produced by Taiwanese-invested firms and some 500,000 Taiwanese live in Shanghai alone. Cross-straits relations have improved significantly since 2008, direct flights are now permitted and Chinese investment is allowed to enter the Taiwan market.
Taiwan's strategic location is one of its most significant advantages for international investors. It is ideally situated adjacent to China and within easy reach of major commercial centres and ports in the ASEAN (Association of South East Asian Nations) region. For example, the sailing time from Taiwan's largest port, Kaohsiung, to five of the largest Asia-Pacific ports (Hong Kong, Manila, Shanghai, Tokyo and Singapore) is just over two days. This makes Taiwan a favoured choice for headquarters in the Asia-Pacific region, as well as for R&D facilities.
With direct flights having been introduced in 2008, travellers can now fly on over 600 flights per week between Taiwan and major cities in China with a journey time of just one to two hours, and the number of flights is likely to rise.
The continuing liberalisation of links across the Taiwan Strait means that foreign companies are increasingly choosing Taiwan both as a market in its own right and as a stepping stone into China. Taiwan signed the Economic Cooperation Framework Agreement (ECFA) with China in 2010 to reduce tariffs and commercial barriers between the two markets. This is expected to boost bilateral trade significantly.
Taiwan's pro-investment policies and incentives are another major pull for investors. Free competition is encouraged and there are price controls only on basic necessities. Qualified foreign companies can obtain listings on the Taiwan stock market by listing their shares or issuing Taiwan depositary receipts. Taiwan encourages mergers and acquisitions that serve the public interest and protection is provided to foreign patents, trademarks and copyrights.
Since Taiwan joined the World Trade Organisation in 2002, it has opened up its domestic market to international investment and there are now very few industries that are closed to foreign investors – the industries where foreign investment is restricted mainly focus on agriculture, forestry, fisheries and animal husbandry. Talk to UKTI Taiwan for more details.
Around 300 UK companies already have a significant presence in Taiwan, including BP, HSBC, Standard Chartered Bank, Barclays, Arup and Mott Macdonald. UK retailers have been well-received, with fashion labels such as Burberry, Vivienne Westwood, Paul Smith, Dunhill, Aquascutum, Ted Baker, Gieves & Hawkes, Oasis and French Connection all gaining a foothold in the marketplace. Smaller, specialist UK companies have also invested in Taiwan, including suppliers to the vast semiconductor industry and specialist chemical company, Epichem.
Taiwan is actively promoting the development of six emerging industries: biotechnology; green energy; culture and creativity; medicine and healthcare; tourism and high-end agriculture. It is also focusing on four "intelligent" industries: smart electric vehicles; smart green buildings; cloud computing and patent commercialisation. There are incentives available to attract foreign and domestic investors in these priority sectors. You can find more information on the official Invest in Taiwan website at http://investtaiwan.nat.gov.tw/library/main_eng_general.jsp
High-value opportunities in Taiwan
HVO Transport projects
The Taiwanese authorities have announced ambitious plans to build new metro lines, extend high speed rail stations, and major upgrades to traditional railways (mainlines) in Taiwan with projects up to 2030. Taipei City will lead on projects in Taipei, New Taipei City and Taichung City for both new metro lines and extensions of six metro lines and there will be potential plans for light rail projects for Taoyuan and Kaohsiung cities. In addition, there will be three new stations for high speed rail, and major maintenance signalling upgrades for traditional railways.
For more information contact Andrew Scott-Green: email@example.com
HVO Urban Infrastructure project
This project covers four eco-city pilots with an estimated investment of £1.2 billion with an ultimate goal of forming four low-carbon living zones by 2020, to be rolled out to 16 cities by 2050. In addition to the four pilot cities, Taipei City has allocated a £168 million budget to develop its low carbon city plan. Also, Taipei City will host the 2017 Universiade (world student games) when 12,000 athletes from 160 countries are expected to attend. The total budget for the 2017 Universiade is £790 million, of which 30% is expected to support low carbon initiatives, messaging and the construction of stadia and a new low carbon athletic village.
For more information contact Andrew Scott-Green: firstname.lastname@example.org
HVO New Energy projects
Taiwan announced its first off-shore wind pilot project in July 2012: three wind farms will be selected for this programme. Each project will have a capacity of between 100MW to 600MW. These projects are expected to generate £10.4 billion in business opportunities for local and international equipment manufacturers, industry supply chain and services. There is also a national programme to set up the guidelines and a major pilot study on marine and ocean current energy.
Due to the impact of Japan's Fukushima nuclear incident, Taiwan announced in November 2011 it will decommission the No. 1 Nuclear Power Plant by 2018, No.2 by 2021, and No.3 by 2024. Taiwan Power Company and UK’s Nuclear Decommissioning Authority (NDA) have signed a MoU to set up a UK and Taiwan co-operation framework for the nuclear decommissioning programme. The potential contract value to decommission the three nuclear plants is £1.4 billion.
UKTI has produced a Taiwan business guide which is available from:
If you have a specific export enquiry about the Taiwanese market which is not answered by the information on this report, you can contact:
British Trade a Cultural Office (BTCO)
26th Floor, President International Tower
9-11 Song Gao Road
Xin Yi District
Tel: +886 (2) 8758 2088
Fax: +886 (2) 8758 2050
British Chamber of Commerce in Taipei (BCCT)
26th Floor, President International Tower
9-11 Song Gao Road
Xin Yi District
Tel: +886 (2) 2720 1919
Fax: +886 (2) 2720 9200
Source – UKTI
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