Seventh, consecutive, annual Business Climate Survey conducted amongst business leaders in Taiwan

1. 2017 Taiwan
Business Climate Survey
Full Results
Copyright © 2017 Independent Marketing & Research Limited. All Rights Reserved.

2. For the last seven consecutive years, we have conducted a survey of business leaders in
Taiwan.
We intentionally measure many of the same issues year after year; to track changes over
time. However, each year we also delete -issues when they become no longer relevant - and
add new ones.
This year’s report has several new areas which we explored and has many more opinions
directly quoted.
We would like to sincerely thank all those who participated in the study for their time,
insights and views.
We hope you find the following report of interest and help.
Please feel free to contact us if you would like any further information or elaboration.
Sincerely,
Gordon Stewart
Independent Marketing & Research Limited.

3. Section 1
Executive Summary
Section 2
Detailed Findings
Section 3
About the sample
Financial Indicators &
Trends
Business Focus Who, When and How
Profitability HQ & Management
locations
Industry Classifications
Forecasts Taiwan as a Regional HQ? Type of Legal entities
Employment Current Profitability Time established in Taiwan
Issues with impact Short-term Investment Number of FTEE
Most regressed issue Five-year Outlook Statistical testing
Mergers & Acquisitions Employment & Talent Enquiry/Contact
Support for Trade Deals Mergers & Acquisitions
Quality of Talent Impacts, Issues & Progress
Quality of Living Taiwan Government
Municipal Government
U.S. Government
Trade Agreements
Quality of living
Table of Contents

4. 4
Section 1:
Executive Summary

5. Key Financial Indicators & Trends
In order to track changes and detect trends, for the
past 7 years we have asked identical questions relating
to Taiwan enterprises’ current and forecast financial
performance.
This year’s results are similar to last year’s levels – with
no statistically significant changes in the four key
indicators of profitability, near-term growth,
investment and longer-term growth.
However, the latest five-year trends show a general
decline, with only current profitability being
maintained.

6. 74%
72%
81%
54%
81%
66%
59%
43%
70%
65%
69%
52%
56%
67%
61%
50%
60%
67%
54%
43%
47%
56%
45%
49%
Profitable Current Year Forecast for Revenue & Profit
Growth
Increased Investment Forecast Optimistic about 5-Year Business
Outlook
Key Financial Indicators
2010 2011 2012 2013 2014 2015 2016 2017
A statistically
significant change
in 2016 vs. 2015

7. 66% 65%
69%
67% 67%
2012 2013 2014 2015 2016
CURRENT PROFITABILITY
69%
63%
61%
54%
56%
2013 2014 2015 2016 2017
FORECAST FOR REVENUE & PROFIT
GROWTH
52%
48%
50%
43%
45%
2013 2014 2015 2016 2017
FORECAST INVESTMENT
56% 54%
60%
47%
49%
2013 2014 2015 2016 2017
5 YEAR BUSINESS OUTLOOK
Key Indicators: Latest 5-year trend

8. Key Takeaways: Profitability
Current profitability
remains in the “Relatively”
to “Very Profitable” zone
for more than two-thirds
of our companies. This has
been the case for seven
consecutive years.

9. Key Takeaways: Forecast
Forecasts for 2017 Revenue
& Profitability, Investment,
and Business Outlook
growth, have stabilized in
the past two years.
However, the 5-year trend
line is still pointing in the
wrong direction.

10. Key Takeaways: Employment
47% of all companies
surveyed increased their
employment numbers
either “slightly” or
“significantly”, during
2016. Whilst less than
2015’s increase, it’s still an
encouraging reflection of
our respondents’
businesses.
And, they plan to hire still
more in 2017.

11. Key Takeaways: Issues with Impact
The top issues adversely
impacting our business
leaders are:
1. Governmental bureaucracy
2. China-Taiwan government
relations
3. Lack of clarity in labor laws
4. Inconsistent regulatory
interpretation
5. Political turmoil in Taiwan.

12. Top 10 Impacts on Business
Issue
Impact
Ranking
Severity
Progress
Regress
Recommendation
Governmental Bureaucracy 1  
Make the Foreign Investment Approval
(FIA) process simpler, clearer and more
predictable; make application process
for special licenses simpler and clearer;
reorganize environmental impact
assessment process.
China-Taiwan Government Relations 2 

Most
regress
Find areas in which Taipei and Beijing
can cooperate successfully, e.g.,
prosecution of violent crimes,
prosecution of drug trafficking and
money laundering, disaster relief, etc.
Lack of clarity in labor laws 3 

Revise labor regulations so rules
designed for factories are not forced
inappropriately onto other sectors of
the economy.
Inconsistent regulatory interpretation 4 
 Instruct local authorities to document
and share their decisions on matters left
to their regulatory discretion.
Political turmoil in Taiwan 5  
Encourage political groups to express
their views through notice and
comment on new laws and regulations
and at public hearings; discourage
physical violence in the Legislative Yuan.

13. Top 10 Impacts on Business (continued)
Issue
Impact
Ranking
Severity
Progress
Regress
Recommendation
Inconsistent application of
the Rule of Law
6  
Make FIA process simpler, clearer and
more predictable; assure that local
authorities do not investigate or punish
minor infractions only against foreign-
owned companies.
inadequate/outdated laws 7

Most severe
impact

Instruct ministries to review regulations
routinely after a specified sunset period
has passed.
Ability to recruit appropriate personnel 8  
Further liberalize the availability of work
permits for foreign white collar
professionals.
Differences between local and
internationally accepted standards
9 

Instruct ministries to research
regulatory regimes of other major
jurisdictions before drafting significant
new regulations.
Insufficient notice before changes to
regulations or laws are introduced
10 
 Enforce the Executive Yuan's new
‘notice and comment’ procedures.

14. Key Takeaways:
The Issue that has regressed the most
This year’s survey has seen
a drastic reversal of the
progress in China-Taiwan
government relations.
Last year, this rated the
third best issue for
progress (rated 38 out of
40 in a lack of progress).
This year, it rates first out
of 45 issues for lack of
progress. A concerning
trend.

15. Key Takeaways:
Mergers & Acquisitions (M&A)
On average, 1 in 8 of our
surveyed companies is
involved in M&A each
year. The reasons for
seeking M&A and for
failing to complete the
deals are also consistent.
Additionally, 1 in 5
companies every year,
“consider” M&A.

16. Key Takeaways: Support for Trade Deals
There are strong positive
attitudes towards and support
for: TIFA (the high-level talks
between the USA and Taiwan
governments); the China-
Taiwan Cross-Strait Service
Trade Agreement (CSSTA) and
its ratification; and the
establishment of a USA-Taiwan
Bilateral Investment
Agreement (BIA).

17. Key Takeaways:
Quality of Talent
.
As in past years, the
survey-takers praised the
caliber of the Taiwan
workforce as being hard-
working, trustworthy and
well-educated, but found
deficiencies in their degree
of creativity, initiative, and
innovativeness.

18. Key Takeaways:
Quality of Living
Business leaders consider
Taiwan to be a safe, nice
and easy place to live, with
a good healthcare system.
The main negative
occurred around the safety
of pedestrian (Zebra)
crossings, and as in
previous years, the lack of
an English-friendly
environment and poor air
quality.

19. 19
Section 2:
Detailed Findings

20. Business Focus
The business leaders surveyed in 2017 are clearly
focused on Taiwan; as the primary goal of most entities
is to supply the Taiwan market with goods or services.
As in prior studies, this makes their comments and
observations especially pertinent to the Taiwan
government.

21. Taiwan
64%
Greater China
2%
Export to the U.S.A.
3%
Markets other than Greater
China or USA
1%
Multiple markets including
Taiwan and Greater China
25%
Other markets or
combinations
5%
Business’ primary goal in Taiwan to provide/source goods
or services for:

22. Unfortunately, or realistically…
Taiwan is generally viewed as “Not a high priority” at
the global head office level – with less than half of our
member companies saying it is in their top ten priority
markets. Of those who do rank Taiwan in their top ten,
the majority are Taiwan-headquartered companies.
This year we have seen a statistically significant change
in the composition of respondents; with fewer saying it
is not a high priority. However, this is offset by a
significant increase in those saying they “Don’t know/
Can’t say”.

23. 10%
3%
54%
11%
10%
7%
5%
10%
3%
46%
15%
7%
10% 10%
10%
4%
45%
13%
10% 9% 8%
10%
5%
48%
10%
7%
10% 10%
11%
1%
48%
12%
8%
10% 10%
6% 5%
51%
10%
6%
14%
9%
14%
2%
38%
15%
3%
13%
14%
Don't know/can't
say
Looking to disinvest Not a high priority In the top 10 In the top 5 In the top 3 #1 Priority
How does Taiwan fit into your global entity’s investment
plans?
2010 2011 2012 2013 2014 2015 2016

24. Ownership & Management of Taiwan
Entities
Most of our respondent companies have their
corporate headquarters in the U.S. (50%), with Taiwan
being the second most frequent location at 24%.
For non-Taiwanese companies, the direct supervisor of
the Taiwan entity is more likely to be located in:
Mainland China (20%), Hong Kong (20%), Singapore
(13%), and then the USA (10%), indicating that most
managers report into a Regional office rather than
directly to the HQ.

25. In which country is your …
Located?
Corporate HQ Direct Supervisor
USA 49.7% 10.1%
Taiwan 24.0% 31.4%
Country in Europe 12.9% 1.8%
Hong Kong 4.1% 19.5%
UK 2.4% 1.2%
Australia 1.7% -
Canada 1.7% -
Japan 1.7% 1.2%
Singapore 1.2% 13.0%
Other 0.6% -
South Korea - 2.4%
China (Excluding HK) - 19.5%

26. Would Taiwan be a good place for a
regional HQ?
When asked to rate Taiwan as a good (or potentially
good) place for a regional headquarters, on a scale of
0-100 the average score was only 49.
However, there were very strong and divergent views
on this issue, with 10% scoring it a zero, to more than
8% scoring it 90 or greater.

27. 10.0%
2.5% 2.5%
1.9%
5.0%
3.1%
3.8%
7.5%
3.8%
6.9%
6.3%
6.9%
3.1%
3.8%
3.1%
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
Frequency
Score
Do you believe Taiwan is, or could be, a good place to have a regional
headquarters? (Score from 0 to 100)

28. 2016: Another Profitable Year for Business
The majority (67%), of our business leaders,
experienced either a “relatively” or “very profitable”
year in 2016. A very similar result to prior years. The
drop in the proportion who answered “Very Profitable”
compared to last year into the ”Relatively profitable”
group, is not statistically significant.
Directionally, it seems that most are growing their
profitability over 2015.

29. 0%
3%
24%
53%
21%
1%
3%
24%
58%
14%
1%
3%
31%
56%
10%
0% 1%
34%
54%
11%
0%
2%
28%
56%
14%
0%
3%
29%
52%
15%
1%
3%
29%
58%
9%
Very Large Loss Relatively Large Loss Break-even or small
Profit/Loss
Relatively Profitable Very Profitable
How would you characterize your Taiwan business'
financial performance in 2016?
2010 2011 2012 2013 2014 2015 2016

30. 5%
21%
30%
35%
9%
Substantial decline
Modest decline
No change in profitability
Modest growth
Substantial growth
0% 5% 10% 15% 20% 25% 30% 35% 40%
How would you characterize your Taiwan business’
profitability this year (2016) versus 2015?

31. 2017: Business similar to 2016
In relation to their 2016 result, the majority of our
business leaders are forecasting growth in their
revenues and profits, albeit at a more modest level.

32. 0%
6%
8%
54%
17%
1%
10%
23%
46%
11%
1%
6%
19%
53%
13%
1%
6%
16%
53%
11%
1%
9%
18%
50%
11%
2%
11%
22%
39%
15%
2%
8%
20%
47%
9%
Substantial decline in both
Revenues & Profits
Modest decline in both
Revenues & Profits
Remain the same Modest growth in both
Revenues & Profits
Substantial growth in both
Revenues & Profits
What is your Taiwan business’ Revenue & Profits forecast
for 2017 compared to 2016? (Top responses only)
2011 2012 2013 2014 2015 2016 2017

33. Short-term investment : Stable
Forecasted levels of investment are likely to remain
unchanged from 2016.

34. 1%
3%
20%
36%
38%
16%
2% 2%
13%
41%
33%
10%
1% 2%
6%
39%
42%
11%
2%
1%
4%
44%
41%
7%
1%
2%
5%
42%
40%
10%
2%
4%
7%
44%
37%
7%
2% 2%
5%
46%
40%
5%
Don't know/can't say Substantial decrease Slight decrease No Change Slight increase Substantial increase
What is likely to happen to your entity’s level of
investment in Taiwan over the next 12 months?
2011 2012 2013 2014 2015 2016 2017

35. Looking forward five years…
After a fairly consistent and optimistic outlook over recent
years, last year saw a significant (statistically) decline in
the level of positivity. This year’s 5-year prediction is very
similar to last, with just under 50% of our members saying
they are either “slightly” or “optimistic” about the next 5
years of business in Taiwan. This sluggish result should be
a major cause for concern for the government.

36. How would you describe your five-year business outlook for
Taiwan?
3%
10%
7%
52%
29%
1%
7%
22%
43%
28%
3%
16%
26%
37%
19%
4%
14%
29%
37%
17%
2%
14%
24%
42%
18%
5%
19%
29%
34%
13%
3%
16%
32%
38%
11%
Pessimistic Slightly Pessimistic Neutral Slightly Optimistic Optimistic
How would you describe your five-year business outlook
for Taiwan?
2011 2012 2013 2014 2015 2016 2017

37. Comments on Outlook
For the first time, we asked our respondents if they
would like to comment on their forecasts; just under
half chose to. Of these, those expressing optimistic
sentiments (42%), narrowly outstripped those with
negative (40%). Neutral comments were made by
18%.
Some examples of most frequently used words and
representative quotes, follow.

39. Example Comments on 5-year Outlook
Positive Neutral Negative
“The consumer sector in Taiwan is
still on comparable basis very
interesting. A consumer that is
interested in new products and
ideas, and also expects companies
to innovate. In certain sectors the
relative spending in relation to
their disposable income is still on
international very low level and I
expect those sectors to grow
relatively their share whilst at the
same time no expectation on
overall disposable income to be
increased significantly. In other
words - a redistribution of the
wallet.”
“New areas of business we plan to
enter.”
”It was hoped the new
administration would bring about
greater leadership to develop
talent and position Taiwan on a
path the greater international
presence and develop economic
opportunities. To date we have
not seen this leadership and as
such it would be difficult to offer
much more than a neutral
outlook.”
“ The business outlook depends on
government policy direction and
how fast and complete new
policies are implemented. At this
point it is still too early to tell.”
”1) Uncertainty in infrastructure
availability at low costs. 2) Talent
loss to mainland China 3) IP and
Trade secret protection gap.”
“Uncertainty surrounding the
political landscape in Taiwan, both
domestically and internationally.
The Tsai government drastically
needs to improve their game and
start implementing sensible and
beneficial (to both the broad
economy and the Taiwanese
people), policies.”

40. Full Time Equivalent Employees(FTEE)
Full-Time Equivalent Employees (FTEE) are defined by
counting part-time employees as a half an employee
and adding them to the number of full-time employees.
As in past years, our respondent businesses show
continuing growth in employee numbers.

41. During 2016…
• Almost half (48%) of the companies increased their
FTEE numbers either “significantly” or “slightly”
during 2016
• 38% maintained their numbers of employees.
• 14% decreased their numbers either slightly or
significantly, compared to 17% in 2015

42. 1%
16%
39%
36%
7%
1%
12%
32%
48%
7%
2%
15%
32%
43%
8%
1%
13%
38%
43%
5%
Decreased significantly Decreased slightly No change Increased slightly Increased significantly
Actual Changes in FTEE
2013 Actual 2014 Actual 2015 Actual 2016 Actual

43. When decreases are taken away from increases in FTEE,
and then numerically weighted to take into account the
degrees of change, we see that in 2016 there was a net
gain in FTEE numbers of 36%. This compares to gains of
38%, 47% and 33% in 2015, 2014 and 2013,
respectively.
During 2016…

44. 2013
2014
2015
2016
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Actual Net Increases in FTEE (weighted)

45. Hiring forecast to increase in 2017
• 41% of these business establishments plan to
increase their headcount during 2017
• 49%, will maintain their 2016 levels
• Only 8% anticipate reducing headcount.

46. 1%
16%
39%
36%
7%
1% 0%
8%
49%
39%
2%
1% 2%
7%
42%
45%
4%
1%
2%
9%
46%
37%
4%
3%
1%
7%
49%
38%
3%
Don't know/Can't say Decrease significantly Decrease slightly No change Increase slightly Increase significantly
Forecast Changes in FTEE
2013 Actual 2014 Forecast 2015 Forecast 2016 Forecast 2017 Forecast

47. On a numerically weighted basis, 34% of our business
leaders are forecasting an increase in employment
numbers. This compares with last year’s forecast of
31%.
Forecast growth in 2017

48. 2014
2015
2016
2017
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Businesses forecasting a net increase in FTEE in 2017
(weighted)

49. Most growth in Full-Time Equivalent Employees
forecast for 2017 is reported as coming from SME
companies with between 51 and 100 employees.
Entities with 6 to 50 employees are also forecasting net
growth for 2017.
Large, and even Micro (less than 5 employees),
companies are also forecasting growth in employment.
Forecast FTEE

50. 0 5 10 15
5 or less
6-20
21-50
51-100
101-150
151-200
201-250
251-300
301-350
351-400
401-450
451-500
501-550
551-600
601-650
651-700
701-750
751-800
801-850
851-900
901-950
951-1,000
1,001-1,500
1,501-2,000
2,001-3,000
3001-4000
More than 4,000
Net forecast increase in FTE for 2017 by number of
employees

51. Industries most likely to be increasing headcount in 2017 (Top 9 Ranked)
Medical Devices
Pharmaceuticals
Management Consulting Services
Health Care Services
Human Resource Consulting
Insurance
Chemicals
Computer Software Programming Services
Engineering and Technical Services
Industries likely to see a reduction in FTEE during 2017
Semiconductor and Other Electronic Component Manufacturing
Retail Trade
Defense

52. Human Resources
A lack of quality human resources is one of the major
risk factors seen as confronting businesses in the
future.
We asked our corporate leaders to give us their
impressions of the quality of available human capital in
Taiwan.

53. Taiwanese Human Talent are seen as…
Hard-working, very trustworthy, extremely well-
educated, easy to develop or train, very loyal, highly
productive, generally showing a high degree of
emotional intelligence quotient (EQ), and generally
well-rounded. A very positive profile of the workforce.
Understandably, no major changes were seen in this
year’s survey compared to prior years.

54. However…
They are also perceived as not displaying a great deal of
creativity, not of a ‘World-class’ standard, not being
innovative, and not showing a great deal of initiative.
These have been enduring perceptions over the seven
years of these studies.

55. -50 0 50 100 150 200
Shows a great deal of creativity
Of 'world class' standard
Innovative
Show a great deal of initiative
Good English language skills (if required)
Easy to recruit
Easy to retain
Well-rounded
Show a high degree of Emotional Intelligence (EQ)
Highly productive
Very loyal
Easy to develop/train
Extremely well-educated
Very trustworthy
Hard-working
Net Perceptions of Human Resources in Taiwan - 2017

56. Human Capital - Overall perceptions
Whilst the preceding chart shows the net differences in
scores of positive and negatives perceptions, it should
be remembered that there are mixed views on the
same criterion. The next chart shows these in full.

57. -50 0 50 100 150 200
Good English language skills (if required for role and/or promotion)
Of 'world class' standard
Show a great deal of initiative
Show a great deal of creativity
Easy to recruit
Innovative
Show a high degree of Emotional Intelligence (EQ)
Well-rounded
Easy to retain
Easy to develop/train
Highly productive
Very trustworthy
Extremely well-educated
Very loyal
Hard-working
Perceptions of Human Capital in Taiwan
Strongly Agree
Agree
Disagree
Strongly Disagree

58. Some additional comments from our
business leaders…
“English skills lagging behind in Asia region.”
“Too many university students with high ambitions leading to lack of skilled
workers. Taiwan focus is obviously making university degree easily
achievable, but at the cost of quality. Not every student is well advised to
study and some would be great contributors with a more work focused
education.”
“The Taiwanese culture impedes individual thought and creativity. The
hierarchical approach to relationships suppresses ideas and non-linear
approaches to the work. Although the Taiwanese are well educated, there is
often a lack of ‘street smarts’. There is a tendency for ‘group think’ and
consensus rather than challenging the norm in a positive and productive
manner.”

59. Merger & Acquisition (M&A) Activity
As economic indicators go, merger and acquisition
activity has long been a sign of a maturing equity
market and as a general indicator of economic activity.
From our survey over the last 7 years, Taiwan appears
to have a relatively low, but consistent level of M&A
activity.

60. Merger & Acquisition (M&A) Activity
Over the past seven years, around 12% of our
companies engaged in merger and acquisition (M&A)
activity of a Taiwanese entity, each year.
This year, as in previous years, some tried and failed
(3%), and some considered M&A but didn’t pursue it
(19%). However, for the vast majority of business
leaders (69%), M&A, understandably, simply isn’t on
their radar, in any given year.

61. 61%
23%
4%
7%
5%
71%
17%
4% 4% 4%
71%
18%
2%
5% 5%
72%
17%
3% 4% 3%
68%
21%
3%
5%
3%
69%
20%
5%
3% 4%
69%
19%
3%
7%
2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Did not pursue or consider Considered, but didn't
pursue
Pursued, but not successful Pursued, and still in the
process
Pursued and completed
deal
Did your entity pursue, or consider, a merger with or
acquisition of a Taiwanese entity in the past 12 months?
2010 2011 2012 2013 2014 2015 2016

62. When it happens, there are sound business
reasons for M&A
While only a few companies did attempt the M&A
route in the past 12 months, their reasons for doing so,
as in previous years, show sound business logic such as:
To gain synergies (by reducing costs and improving
profits), enlarge customer base, increase local market
access; and to acquire capacity or technology . These,
as they have been in past years, are the major drivers
behind M&A.

63. 0 2 4 6 8 10 12
To gain taxation advantages
To gain access to Mainland market
To improve IPO possibility
A defensive move to counter competitor(s)
To acquire key supplier(s)
To acquire key local brand(s)
To acquire business license in a restricted industry
To acquire management team
To acquire technology
To eliminate competition
To gain greater local market access
To enlarge customer base
To acquire capacity
Ability to gain synergies (reduce costs - improve profits)
Top Objectives of M&A during 2016
Primary Secondary Tertiary

64. Major challenges to M&A in 2016
Negotiating the valuation gap was the greatest
challenge in 2016. Followed by finding an appropriate
target, post-deal restructuring, and conducting due
diligence.
We note that a lack of transparency, and inconsistency
of interpretation, in government regulations, list
prominently in the challenges to be overcome in
mergers and acquisitions.

65. 0 2 4 6 8 10 12 14
Negotiating the letter of intent
Obtaining permission for target to be sold
Inconsistent regulatory interpretations
Obtaining government approvals
Transparency of regulations
Language issues
Cultural issues
Financial issues
Conducting due diligence
Post-deal restructuring
Finding an appropriate target
Negotiation of valuation gap
Major Challenges of M&A During 2016
Major Challenge Second Third

66. One-in-five interested in M&A
On average over the past 4 years, 19% of
businesses consistently claim they would
“definitely” or “possibly” consider M&A in the
next 12 months.

67. 5%
13%
22%
24%
22%
14%
4%
15%
21%
27%
20%
13%
5%
14%
25%
23%23%
11%
5%
14%
28%
26%
17%
9%
7%
16%
22%
27%
17%
11%
5%
17%
18%
28%
19%
13%
7%
22%
20%20%
21%
11%
Definitely consider M&A
activity in next 12
months
Possibly consider M&A
activity in next 12
months
Unlikely to consider
M&A in next 12 months
Definitely not consider
M&A activity in next 12
months
Don't knowPrefer not to answer
Likelihood to consider M&A in the next 12 months
2017
2016
2015
2014
2013
2012
2011

68. What impacts their business?
Governmental Bureaucracy, China-Taiwan relations,
Labor laws, inconsistent regulatory interpretation and
Political turmoil, have topped the list of greatest
negative impacts on our members’ businesses.

69. Which of the following impacts your operation in Taiwan?
2017 Ranking
Issue 2017 2016 2015 2014 2013 2012 2011
Governmental Bureaucracy 1 4 3 1 3 4 2
China-Taiwan government relations 2 12 11 16 13 7 8
Lack of clarity in labor laws 3 New in 2017
Inconsistent regulatory interpretation 4 2 1 2 2 2 3
Political turmoil in Taiwan 5 11 10 13 New in 2014
Inconsistent application of the Rule of Law 6 6 5 4 New in 2014
Inadequate/Out-dated laws 7 1 4 5 4 6 5
Ability to recruit appropriate new personnel 8 7 6 9 5 3 4
Differences between local and internationally accepted
standards
9 8 7 7 New in 2014
Insufficient notice before changes to regulations or
laws are introduced
10 5 8 6 6 New in 2013

70. Which of the following impacts your operation in Taiwan?
2017 Ranking - Continued
Issue 2017 2016 2015 2014 2013 2012 2011
Changes in local demand 11 3 2 3 1 1 1
Government reform/restructuring 12 17 17 17 10 New in 2013
Lack of transparency 13 10 9 8 9 10 10
Currency Exchange rate fluctuations 14 9 16 12 7 5 7
Domestic protectionism 16 16 15 11 12 12 12
Changes in employment expenses 17 13 13 10 8 8 9
Personal Taxation levels 18 18 18 18 18 22 6*
Intellectual Property Rights infringements 19 19 23 21 14 15 15
Government procurement procedures 20 25 28 26 27 26 25
Financial Industry reform 21 24 29 31 20 23 23

71. Which of the following impacts your operation in Taiwan?
2017 Ranking - Continued
Issue 2017 2016 2015 2014 2013 2012 2011
Ability of PRC personnel to travel to Taiwan 22 28 34 33 New in 2014
Import & Export procedures 23 New in 2017 Replaces "Customs & Trade regulations"
Changes in overseas demand 24 21 22 20 16 21 18
Import Duties 25 New in 2017 Replaces "Customs & Trade regulations"
Prohibitions or restrictions on foreign investment into
Taiwan
26 New in 2017
Changes in Raw Material costs 27 31 31 32 24 25 26
Inadequate Infrastructure (Power, Water,
Telecommunications, Transport, etc.)
28 23 30 29 26 27 21
Direct flights to/from Mainland 29 22 21 22 17 14 28
The Economic Cooperation Framework Agreement
(ECFA)
30 26 24 30 28 18 14
Restrictions on imports from China 31 New in 2017

72. Which of the following impacts your operation in Taiwan?
2017 Ranking - Continued
Issue 2017 2016 2015 2014 2013 2012 2011
Corruption 32 29 19 24 19 17 22
Corporate Taxation levels 33 15 14 15 11 9 6*
Changes in Energy costs 34 27 25 19 New in 2014
EU - Taiwan government relations 35 34 33 35 29 28 27
Changes in Tariffs 36 30 26 27 21 20 24
Difficulties or uncertainties concerning foreign
investment approvals (FIA)
37 New in 2017
Ability of PRC personnel to work in Taiwan 38 35 36 36 New in 2014
Ability to raise capital, locally 39 39 38 38 New in 2014
Illegal imports 40 36 35 34 30 29 29
Changes in Financing costs 41 33 32 28 23 24
New in
2012

73. 0 10 20 30 40 50 60 70
Insufficient notice before changes to regulations or laws are
introduced
Differences between local and Internationally accepted standards
Ability to recruit appropriate new personnel
Inadequate/outdated laws
Inconsistent application of the rule of law (i.e., well-established and
clearly written rules, regulations, and legal principles)
Political turmoil in Taiwan
Inconsistent regulatory interpretation
Lack of clarity in labor laws
China - Taiwan government relations
Governmental bureaucracy
Top 10 Issues that impact their business and how much
Some Impact Significant impact Extreme impact

74. 0 10 20 30 40 50 60 70
Government procurement procedures
Intellectual property rights infringements
Personal taxation levels
Changes in employment expenses
Domestic protectionism
Protection of local industries
Currency exchange rate fluctuations
Lack of transparency
Governmental reform/restructuring
Changes in local demand
Issues 11-20 that impact their business and how much
Some Impact Significant impact Extreme impact

75. 0 10 20 30 40 50 60 70
The Economic Cooperation Framework Agreement (ECFA)
Inadequate infrastructure (Power, Water, Telecommunications,
Transport, etc.)
Direct flights to/from China
Changes in raw material costs
Import Duties
Prohibitions or restrictions on foreign investment into Taiwan
Changes in overseas demand
Import & Export procedures
Ability of PRC personnel to travel to Taiwan
Financial industry reform
Issues 21-30 that impact their business and how much
Some Impact Significant impact Extreme impact

76. 0 10 20 30 40 50 60 70
Illegal imports
Ability of PRC personnel to work in Taiwan
Ability to raise capital, locally
Difficulties or uncertainties concerning foreign investment approvals
(FIA)
Changes in tariffs
EU - Taiwan government relations
Changes in energy costs
Corporate taxation levels
Corruption
Restrictions on imports from China
Issues 31-40 that impact their business and how much
Some Impact Significant impact Extreme impact

77. 0 10 20 30 40 50 60 70
Access to private equity financing
Slow processing of PRC personnel work permits
Changes in transport costs
Exchange controls
Ability to secure credit, locally
Difficulty of finding appropriately zoned land at reasonable prices
Changes in financing costs
The remaining issues that impact their business
Some Impact Significant impact Extreme impact

78. “The introduction of the New Labor Standard Act.
Insufficient notice is received before changes to the
regulations”
“MNCs perception of the business environment and
macroeconomic outlook”
“Budget and Decision making driven by Asia HQ in
PRC”
What impacts their business?
Other Direct Quotations

79. “Extremely counter-productive labor regulations,
including 'grade-school-type' of regulation of
overtime”
“High personal income tax, compared to other
countries”
What impacts their business?
Other Direct Quotations

80. “Recent labor laws concerning employee working times
and overtime payment regulations are regressive and
should be repealed. They might be suitable for hourly paid
industries, but not for high-end service, management and
consulting industries where work completion rather than
hours of physical presence is important. It is a system that
promotes the absence of personal responsibility and
creates friction between employees and employers -- it
creates a punch-card mentality. The regulations are
regressive and not at all suitable for an economy that is
trying to move away basic hourly paid work to high-end
service sector economy.”
What impacts their business?
Other Direct Quotations

81. When we view the issues that have made progress over
the period 2008-2016 time horizon, some good strides
were made – especially in connection with China.
Unfortunately, there has recently been a major reversal
in the progress of government relations between China
and Taiwan.
In the following lists, those items in green have shown
progress and all other issues have either regressed or
stagnated.
Progress and the lack of it on Key Issues

82. Areas which regressed, or had little progress, in the past 3 years.
Worst to Best ranking
Issue
2014-
2016
2013-
2015
2012-
2014
2011-
2013
2010-
2012
2009-
2011
2008-
2010
China-Taiwan Government Relations 1 38 37 38 28 28 27
Clarity in labor laws 2
Political turmoil in Taiwan 3 1 1 1
Reducing Personal Taxation levels (*combined with
Corporate in 2010)
4 2 2 15 11 9 26*
Reducing Governmental Bureaucracy 5 8 5 6 4 11 11
Changes in Employment expenses 6 10 8 4 5 1 2
Changes in Local Demand 7 3 16 3 3 20 20
Continuing The Economic Cooperation Framework
Agreement (ECFA)
8 24 30 27 27 27 28
Governmental reform/restructuring 9 4 15 11 15 19 18
Inconsistent application of the Rule of Law (i.e., well-
established and clearly written rules, regulations, and legal
principles)
10 6 7 9

83. Areas which regressed, or had little progress, in the past 3 years.
Worst to Best ranking
Issue
2014-
2016
2013-
2015
2012-
2014
2011-
2013
2010-
2012
2009-
2011
2008-
2010
Reducing domestic protectionism 11 11 3 10 6 3 7
Changes in Overseas Demand 12 13 26 19 12 16 24
Finding appropriately zoned land at reasonable prices 13
Reducing protection of local industries 14
Simplifying government procurement procedures 15 14 6 16 9 7 9
Reducing inadequate/Out-dated laws 16 12 11 12 14 9 5
Consistency in regulatory interpretations 17 7 10 7 2 2 1
Changes in Energy costs 18 27 4 2
Reducing Corporate Taxation levels 19 25 14 32 21 26 26*
Financial Industry Reform 20 28 28 21 13 13 13

84. Issue 2014-
2016
2013-
2015
2012-
2014
2011-
2013
2010-
2012
2009-
2011
2008-
2010
Currency Exchange rate fluctuations 21 29 32 24 17 14 14
Changes in Raw Material costs 22 26 9 14 7 4 4
Lessening restrictions on imports from China 23
Changes in Transport costs 24 21 20 13 8 6 12
Changes in Tariffs 25 18 18 31 19 18 16
Changes in Financing costs 26 15 21 20 10 8 8
Ability of PRC personnel to work in Taiwan 27 35 34 35
Processing of PRC personnel work permits 28 34
Ability to Recruit Appropriate New Personnel 29 5 13 5 1 5 3
Lessening prohibitions or restrictions on foreign investment
into Taiwan
30
Areas which regressed, or had little progress, in the past 3 years.
Worst to Best ranking

85. Issue 2014-
2016
2013-
2015
2012-
2014
2011-
2013
2010-
2012
2009-
2011
2008-
2010
Reducing Differences between local and Internationally
accepted standards
31 23 27 28
Access to Private Equity financing 32 22 17 25
Improving Transparency 33 17 24 18 18 15 15
Improving Customs and Trade regulations 34 20 25 26 22 17 17
Ability to raise capital, locally 35 30 19 22
Ability to secure credit, locally 36 19 29 23
Loosening Exchange Controls 37
Infrastructure (Power, Water, Telecommunications,
Transport, etc.)
38 32 36 29 23 25 22
EU - Taiwan government relations 39 33 31 30 24 23 25
Sufficiency of notice before changes to regulations or laws
are introduced
40 9 12 8
Areas which regressed, or had little progress, in the past 3 years.
Worst to Best ranking

86. Issue 2014-
2016
2013-
2015
2012-
2014
2011-
2013
2010-
2012
2009-
2011
2008-
2010
Reducing Corruption 41 31 22 17 20 24 19
Ability of PRC personnel to travel to Taiwan 42 39 38 37
Reducing Illegal imports 43 16 23 27 16 12 10
Reducing Intellectual Property rights infringements 44 36 33 33 25 22 23
Increasing Direct flights to/from the Mainland
(Consistently, for the past 7 years, the most progressive issue)
45 40 39 39 29 29 29
USA - Taiwan government relations
Not
asked
37 35 34 26 21 21
Areas which regressed, or had little progress, in the past 3 years.
Worst to Best ranking

87. The major risks confronting business
A downturn or slowdown in Taiwan’s domestic
consumption is of greatest concern for our business
leaders. In a similar vein, the potential for a slowdown
in the global economy is also a fear.
Concerns about government interference and the
future of China-Taiwan relations, lead the other major
worries confronting business, in 2017.

88. 0% 10% 20% 30% 40% 50% 60% 70%
Increased imports
Other
Taiwan unemployment rising
Cyber security risks to your enterprise
Enactment of TPP without Taiwan as a member
Decreased exports
Instability in the South China Sea
Taiwan dollar (TWD) appreciation
Energy shortage in Taiwan
Economic slowdown in Europe
Taiwan Inflation rising
Taiwan dollar (TWD) depreciation
Economic slowdown in China
Increased domestic political unrest
Economic slowdown in the USA
Lack of human resources
Change or uncertainty in Taiwan's policy towards China
Change or uncertainty in China's policy towards Taiwan
Increased governmental interference
Global economic slowdown
Economic slowdown in Taiwan's domestic consumption
The major risks facing their entity in coming years

89. Top 10 things Taiwan Government Could do to Help
Issue 2017 2016 2015 2014 2013 2012 2011
Consistent application of the Rule of Law 1 8 7 4
Reduce Political Turmoil in Taiwan 2 2 1 1
Provide sufficient notice before changes to regulations or
laws are introduced.
3 6 8 8
Remove differences between local & internationally
accepted standards
4 7 4 5
Simplify Government Bureaucracy 5 1 2 2 1 1 1
Resolve Inadequate/Out-dated laws 6 3 3 7
Reduce Personal Taxation 7 4 5 6 3 3 2
Devise plan to stimulate local demand 8 5 6 3
Clarify labor laws 9 New in 2017
Improve Government procurement procedures 10 19 22

90. More things Taiwan Government Could do to Help (Ranked)
Issue 2017 2016 2015 2014 2013 2012 2011
Improve Research & Development incentives 11 9 15
Educate civil servants on international regulatory best-
practices
12 11 27
Increase Direct Foreign Investment incentives 13 12 14
Tighten enforcement of Intellectual Property rights 14 20 23
Provide adequate transition or grace period when
implementing new laws and regulations
15 25
Ratify the China-Taiwan Service Trade Pact (CSSTA) 16 26
Negotiate and sign more bilateral trade deals with other
(non-US) countries
17 14 18
Reduce domestic protectionism 18 10 9 11
Reduce Employment expenses 19 28 11 24
Liberalize the Labour market 20 16 13 23 5 5 10

91. Even more things Taiwan Government Could do to Help
Issue 2017 2016 2015 2014 2013 2012 2011
Reduce Corruption 21 24 16
Remove or loosen prohibitions or restrictions on foreign
investment into Taiwan
22
Improve Inadequate Infrastructure (Power, Water,
Telecommunications, Transport, etc.)
23 17 25
Devise plan to stimulate Overseas Demand (e.g. exports,
tourism)
24 15 30
Implement Financial Industry Reform 25 13 26
Broaden ECFA 26 22 10 9 10 7 7
Introduce stronger corporate governance 27
Not in top 30 in prior years
Maintain reasonable and stable energy costs 28
Allow PRC personnel to travel to Taiwan 29
Loosen restrictions on imports from China 30

92. How else could Taiwan government help?
Additional suggestions
“…improving government procedures, selling off all
government owned company shares and eliminating
direct and indirect subsidies to them, open labor
imports and eliminate the broker system”.

93. How is President Tsai’s government
performing so far?
For the first time, we asked for feedback on the new Tsai
government. We expressly asked about her five priority
areas and how clearly this has been communicated to our
business community, the progress the government is
making, and how relevant these five areas are to them.
Given that we launched the survey only 5 months after
the government commenced power and we concluded it 7
months into their term - it is still early days.

94. -37
-22
-18
-33 -32
-100
-80
-60
-40
-20
0
20
40
Has President Tsai’s Government…
Clearly communicated what this involves?
(Those saying President has, minus those saying the President has not)
Transforming the nation's economic structure Improving the social safety net
Social fairness and justice Regional peace and stability and cross-strait relations
Addressing the diplomatic and global challenges Taiwan faces

95. -74
-52
-38
-82
-73
-100
-80
-60
-40
-20
0
20
40
Is President Tsai’s Government…
Making Good Progress?
(Those saying President has, minus those saying not making progress, or too slow)
Transforming the nation's economic structure Improving the social safety net
Social fairness and justice Regional peace and stability and cross-strait relations
Addressing the diplomatic and global challenges Taiwan faces

96. 33
4
-20
8
4
-100
-80
-60
-40
-20
0
20
40
How do President Tsai’s five priority areas…
Directly impact my business
(Does directly impact my business minus those who say it doesn’t)
Transforming the nation's economic structure Improving the social safety net
Social fairness and justice Regional peace and stability and cross-strait relations
Addressing the diplomatic and global challenges Taiwan faces

97. “Regional peace and
transformation of nation’s
economic structure: the
‘what’ has been
addressed, the ‘how’ is
mostly missing”
“[President]Tsai has not
had much time to talk
about Taiwan's position
because it appears she is
trying to avoid the
appearance of saying what
Beijing is trying to insist she
says. I think she's doing
about as well as she could
be doing for now.”
Other comments

98. “Five core Industries”
The Tsai government has outlined “five core industries”
that they wish to focus on and promote. We asked how
relevant to their businesses these were.
Overall, the Internet of Things (IoT) and biotechnology
were the areas of greatest relevance to the companies
responding.

99. -120
-100
-80
-60
-40
-20
0
20
40
60
80
NetRelevance
The Tsai government outlined "five core industries“
How relevant to your business are these?
(Relevant minus irrelevant)
The Internet of Things (IoT) Smart machinery New Energy Biotechnology Defense

100. Local Government:
The six special municipalities
We asked about the interaction and impact the six
special municipalities of Kaohsiung, New Taipei,
Taichung, Tainan, Taipei & Taoyuan, and specifically,
if they directly impacted their businesses. More than
a quarter of businesses (27%) claimed that they did.

101. Yes
27%
No
52%
Don't know/Can't say
21%
In addition to the national government, is your
organization directly and significantly impacted by any, or
all, of the 6 special municipalities?

102. Impact of the 6 special municipalities
When asked which one(s) impacted their businesses, of
those who indicated that they were directly and
significantly impacted, almost one in three claimed “All
six” and unsurprisingly, Taipei municipality received the
most mentions.

103. 12%
16%
18%
18%
24%
53%
31%
0% 10% 20% 30% 40% 50% 60%
Tainan
New Taipei
Kaohsiung
Taoyuan
Taichung
Taipei
All six
% OF THOSE WHO SAID THEY WERE DIRECTLY AND SIGNIFICANTLY IMPACTED NB MULTIPLE RESPONSES
The special municipal governments that directly and
significantly impact their business

104. 6 negatives associated with the 6 special
municipalities
1. Their interpretation of National rules and regulations
is NOT clear and consistent
2. Municipal rules exist which are either contradictory
to National laws or, exist in areas where no National
rules exist
3. They DON’T facilitate and assist my business in their
area.

105. 6 negatives associated with the 6 special
municipalities
4. Municipal officials appear to be encouraged by their
leaders to raise revenue by fining/penalising
companies.
5. Municipal officers appear to intentionally avoid
consultation with National officials in order to generate
fines for their area.
6. They DON’T treat foreign companies fairly and the
same as Taiwanese companies.
Only one ‘positive’ statement was mentioned and that
is that “They encourage investment in their area.”

106. -0.70 -0.50 -0.30 -0.10 0.10 0.30 0.50 0.70
Their interpretation of National rules and regulations is clear and
consistent
They facilitate and assist my business in their area
They treat foreign companies fairly and the same as Taiwanese
companies
Municipal officers appear to intentionally avoid consultation with
National officials in order to generate fines for their area
Municipal officials appear to be encouraged by their leaders to raise
revenue by fining/penalising companies
Municipal rules exist which are either contradictory to National laws
or, exist in areas where no National rules exist
They encourage investment in their area
WEIGHTED AVERAGE AGREEMENT/DISAGREEMENT
Do you agree or disagree with the following statements
about the six special municipal governments?

107. “On municipal level, the interpretation of national laws or
regulations requires communication and alignment
between national and municipal offices. Achieving this
alignment requires support by Taiwan government
agencies (such as InvestTaiwan), however, we did not
encounter an unwillingness on the municipal side. More a
kind of hesitation and avoidance of personal risk of the
involved municipal bureaucrats, which requires building
"bridges". We could obtain alignment, but it took time,
however, we never had the feeling of unwillingness or
looking to place traps to fine our company.”
Direct quotation regarding the 6 special
municipalities

108. “We were surprised to find out that American and
other foreign clients were being penalized for not
granting national holidays that have not normally
been taken by companies for many years now. One
client was fined for 5 years of not granting holidays
for "Retrocession Day," "Chiang Kai Shek's Birthday,"
"Constitution Day," etc. -- holidays that were not
normally given as days off ever since the government
itself moved from a 6-day work week to a 5-day work
week.”
Direct quotation regarding the 6 special
municipalities

109. Main things USA Government Could do to Help our
Businesses (Ranked)
Issue 2017 2016 2015 2014
Continue to liaise with Taiwan on USA experience regarding regulatory coherence 1 4
Support Taiwan's admission into the TPP 2 1
Assist Taiwan to prepare for accession to TPP 3 2 1
Help establish cooperative exchanges between US and Taiwan regulatory agencies 4 5
Send more senior US Government officials to visit Taiwan 5 7 4 5
Negotiate and sign a Bilateral Investment Agreement with Taiwan 6 3 2 1
Reduce Personal Taxation 7 6 6 4
Reduce Corporate Taxation 8 9 5 3
Ensure that regular meetings are held with Taiwan under the TIFA process 9 8
Repeal or re-evaluate the Foreign Account Tax Compliance Act (FACTA) 10 10 7
Negotiate and sign a bilateral tax agreement with Taiwan 11
Resolve Agricultural disputes with Taiwan 12 11 9
Negotiate and finalize an Extradition Treaty with Taiwan 13 12 8 6

110. The American Institute in Taiwan (AIT), provides
commercial services and agricultural sales for American
interests.
For the first time, we decided to find out how many of
the surveyed companies had ever used AIT services to
assist their business. The majority had not; even those
whose corporate HQ is in the USA.
The American Institute in Taiwan

111. Yes
19%
No
62%
Don't know/Can't say
19%
Has your organisation ever used AIT’s services
Yes
24%
No
59%
Don't
know/Can't
say
17%
Only those with a U.S. Corporate HQ
Yes
13%
No
67%
Don't
know/Can't
say
20%
Only those Non-U.S. Corporate HQ

112. “Canada has an excellent trade promotion group in
Taiwan. AIT seems too bureaucratic and not aggressive.
There is too much consideration of US-China policies. The
few times we have contacted AIT in recent years have not
resulted in any support unlike the days when David Dean,
Jim Lily, Charles Cross strongly supported American
businesses here. Many of the others seemed more
concerned with not letting Taiwan issues cloud US-China
relations. I have high hopes that James Morriarty will
make significant contribution due to his vast experience in
Washington, Beijing and Taiwan.”
Direct quotations regarding the AIT

113. “Frequent change in personnel with inadequate
handover requires ongoing education by industry with
regard to advocacy needs.”
Direct quotations regarding the AIT

114. Trans Pacific Partnership (TPP)
The TPP is a free-trade agreement recently negotiated
by 12 nations (USA, Australia, New Zealand, Japan,
Singapore, Malaysia, Brunei, Vietnam, Chile, Canada,
Mexico and Peru). The aims of TPP are to eliminate, or
at least substantially reduce, barriers to trade and
investment and to create 'gold standards' to deal with
economic issues such as intellectual property.
Trans Pacific Partnership (TPP)

115. Trans Pacific Partnership (TPP)
Our survey covered the period October through to
December, i.e., prior to and after the U.S. elections. The
TPP was still a possibility when some of our
respondents completed the survey. It became
progressively less likely after early November 2016 and
the USA formally withdrew in January 2017. The drop
in “Should pursue” scores this year probably reflects
the likelihood of a U.S. withdrawal/demise of the whole
agreement.
Trans Pacific Partnership (TPP)

116. Don’t know, 15% Don’t know, 14%
Don’t know, 11%
Don’t know, 23%
No, 2%
No, 3% No, 2%
No, 9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016 2017
Should Taiwan pursue membership of the TPP?

117. TPP: Additional comments
“Stop being cowed by the pork industry. Taiwan's
superb pork quality can easily compete with US duty
free imports.”
“TPP is a nice to have - it will not drive Taiwan’s
growth by itself.”

118. TPP: Additional comments
“Taiwan has already lost most of its competitive
advantage; it cannot afford to have its products made
more expensive compared to competitors by failing to
accede to TPP.”
“Potentially provides a counter-balance to China's
influence, will have a positive impact on trade.”

119. TPP: Additional comments
“Pointless, now.”
“It won't happen. TPP is dead.”
“However, I doubt TPP will happen even for phase 1
countries.”

120. Yes
72%
No
5%
Don't
know/Can't say
23%
Should the USA government support Taiwan’s accession
into the TPP?

121. “Taiwan is an important trading partner and military
ally, and it is important that Taiwan not be left out of
TPP, which provides a framework that gives countries
in Asia an alternative to economic dependency upon
China.”
“USA should support Taiwan more on everything.”
Additional Comments on U.S. Support for
Taiwan’s accession into the TPP

122. “Not until Taiwan makes substantial legal/regulatory
changes.”
“But now too late.”
Additional Comments on U.S. Support for
Taiwan’s accession into the TPP

123. “Short-term, would prefer if Taiwan got into RCEP as
don't believe TPP will happen.”
“Under the one-China policy, USA should defer to
Beijing.”
Additional Comments on U.S. Support for
Taiwan’s accession into the TPP

124. China-Taiwan Cross-Strait Services Trade
Agreement (CSSTA)
In June 2013 China and Taiwan signed a services trade
agreement (although, this has still to be ratified into
law), with the intent to open areas such as financial
services, retail and travel, to greater levels of cross-
strait investment. We asked our business leaders if they
felt that the Taiwanese legislature should ratify this
agreement. Most thought that it should.

125. Yes
54%
No
8%
Don't know
38%
Should the Taiwan Legislature ratify the CSSTA?

126. “The anti-CSSTA [movement] tells other potential
investors that Taiwanese people fear doing business
with China/foreigners.”
“This is probably more important for Taiwan in the
short-term than the TPP”
Unprompted comments on the question:
Should the Legislature ratify the CSSTA?

127. “Business exchange between PRC and ROC is already
reality, so removing hurdles would open up
opportunities on both sides.”
“Taiwanese businesses need it.”
Unprompted comments on the question:
Should the Legislature ratify the CSSTA?

128. “This is not in Taiwan's best interest.”
“The Taiwanese people don't want it, it is flawed and
gives too much over to China.”
Unprompted comments on the question:
Should the Legislature ratify the CSSTA?

129. “CSSTA would be economically beneficial to Taiwan,
but national security should trump economics. While I
personally believe integration with China would be a
net positive for the Taiwanese people, it would be
foolish and irresponsible for the government to make
such blatant moves in this direction unless the people
support the ultimate outcome.”
Unprompted comments on the question:
Should the Legislature ratify the CSSTA?

130. The resumption of Trade and Investment Framework
Agreement (TIFA) talks in 2013, after a more than five-
year break, was a welcome relief. Better still they have
been maintained since that time.
We asked what impact these high-level annual talks
had on their business and on Taiwan. They are
perceived to positively impact the country, more so
than their businesses.
TIFA: Business leaders glad to see talks

131. 0%
5%
10%
15%
20%
25%
30%
35%
40%
Don't know/Can't say No Impact Some Impact Significant Impact Extreme Impact
What is the impact of the TIFA process on your business,
and on Taiwan?
Effect on my business Effect on Taiwan

132. The lack of a Bilateral Investment
Agreement (BIA) with the USA…
A BIA which would be designed to protect private
investment and develop market-oriented policies
between the USA and Taiwan.
The impact of not having one on their business and on
Taiwan was the question we sought to answer this year.

133. 21%
38%
30%
7%
4%
28%
9%
27% 27%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Don't know/Can't say No Impact Some Impact Significant Impact Extreme Impact
What impact does the lack of a Bilateral Investment
Agreement (BIA) have?
Effect on my Business Effect on Taiwan

134. *Whilst we use the term “Taiwan” it should be remembered that most of our leaders live in the Taipei area and
many of their comments will reflect “living in Taipei”.
And finally…”The Living is Nice, Easy, &
Safe”
When asked about the quality of life in Taiwan*,
corporate leaders strongly agree that Taiwan is a place
where: “Taiwanese people are extremely nice”; “My
family feels safe”; and Understandably, there was no
significant change in the rankings in this year’s survey.

135. The Top Benefits of Living in Taiwan (Ranked)
Benefits 2017 2016 2015 2014 2013 2012 2011
My family feels safe in Taiwan 1 3 2 2 2 2 1
Taiwan is an easy country to live in 2 1 3 3 3 4 3
Taiwanese people are extremely nice 3 2 1 1 1 1 2
Taiwan provides quality Health/Medical/Dental services 4 4 4 4 4 3 4
Taiwan provides adequate shopping opportunities 5 7 7 6 6 7 7
Mobile telephone coverage is excellent 6 6 8 8 9 9 8
Alternative transportation options are usable and provide
options to driving my car (i.e., buses, bike lanes, taxis, trains,
sidewalks).
7 5 5 5 7 6 5

136. The Top Benefits of Living in Taiwan (Ranked)
Benefits 2017 2016 2015 2014 2013 2012 2011
Internet connectivity is excellent 8 10 11 17 14 8 9
Taiwan delivers reliable electricity 9 8 6 7 5 5 6
Recycling and trash services meet needs 10
Not in top benefits last year
Taiwan's neighborhoods, parks and thoroughfares are clean 11
Taiwan provides quality parks and trails 12 9 12 10 12 12 11
The Postal service is excellent 13 11 9 9 8 10 10

137. Living in Taiwan…The not so great things.
We asked if people agreed
or disagreed with the
statement ”Where there is
no traffic lights, pedestrian
(Zebra) crossings are a safe
place to cross the road.”
There was the most strongly
negative response we have
seen in seven years.
This public safety issue is
something that local
governments/policing
should address as a priority.

138. Living in Taiwan…The not so great things.
We asked (for the first time) if Taiwan’s air quality was
good. Unfortunately, there was a negative response to
this question as well, ranking it the third least desirable
aspect of living in Taiwan.
As we have seen over past years:
– Taiwan is not such an English-friendly
environment
– Banking and other financial services are seen as
far from excellent.

139. The Least Appreciated Aspects of Living in Taiwan (Ranked worst first)
Concerns 2017 2016 2015 2014 2013 2012 2011
Where there are no traffic lights, pedestrian (Zebra) crossings
are a safe place to cross the road
1 New in 2017 – Most negative response in 7 years.
Taiwan provides an 'English-friendly' environment for me and
my family
2 1 2 1 1 1
New in
2012
Taiwan's air quality is good 3 New in 2017
Banking and other financial services are excellent 4 2 3 3 4 6 4
Taiwan provides quality drinking water. 5 5 4 2 3 3 3
Water runoff from storms is controlled and minimizes flooding 6 4 7 5 2 2 1
The standard of schooling is excellent 7 7 6 8 9 10 8

140. The Least Appreciated Aspects of Living in Taiwan (Ranked worst first)
Concerns 2017 2016 2015 2014 2013 2012 2011
Taiwan government is approving development that enhances
the quality of life in our community
8 8 13 11 10 12 17
Taiwan provides quality youth activities 9 9 8 6 6 4 2
The library services provided to our community are current and
meet our needs
10 6 5 4 7 5 4
Taiwan provides safe food 11 3 1 New in 2015
Taiwan provides quality Police services 12 12 9 13 8 9 6
There are plentiful opportunities to enjoy the arts 13 10 11 12 14 12 15
Street surfaces are drivable and safe 14
The sewer system in Taiwan works reliably 15 11 10 7 5 8 7

141. 141
Section 3:
About the sample

142. Who, When, and How.
The survey was addressed, via email, to the 412 voting
representatives – usually the CEO – among AmCham
Taipei’s Corporate Sustaining and Company
membership.
The survey invitation was sent out on October 11,
2016, and the last response was accepted on
December 21, 2016.
The 40-question survey was conducted online with
each respondent receiving a unique link.
Certain question choices were randomized - to avoid
bias.
The survey received a total of 173 responses,
representing a 42% response rate.

143. Industry Classifications
Our respondents identified their industry classification
based upon the one which best described their principal
business in Taiwan.
We have reclassified our sample according to the
STANDARD INDUSTRIAL CLASSIFICATION SYSTEM OF THE
REPUBLIC OF CHINA (Rev.10, 2016) and used the
STATISTICAL YEARBOOK OF THE REPUBLIC OF CHINA 2015,
Issued in October 2016, for the number of businesses.
Our sample draws from all of the major industrial
classifications in Taiwan but is skewed towards the “Goods-
producing” industries.

144. Sector Total Taiwan Our Sample
Agriculture, forestry, fishing & animal husbandry 0.9% 0.6%
Goods-producing industries 19.5% 35.3%
Services-providing industries 79.6% 64.2%
“Goods-producing” industries include: Mining & quarrying, Manufacturing, Electricity & gas supply, Water
supply & remediation activities, and Construction.
Services-providing industries include: Wholesale & retail trade, Accommodation & food service activities,
Transportation & storage, Information & communication, Financial & insurance activities, Real estate activities,
Professional, scientific & technical activities, Support service activities, Public administration & defence;
compulsory social security, Education, Human health & social work activities, Arts, entertainment & recreation,
and ‘Others’.
Industry Classifications (Cont’d.)

145. Industry Classifications (Cont’d.)
Our sample is also more skewed towards
‘Manufacturing’, ‘Professional Scientific/Technical
services’, and the ‘Finance and Insurances’, industries.
It is under-weighted in the ‘Wholesale and Retail Trade’
industry. The Wholesale and Retail trade account for
some 650,000 of all the businesses registered in
Taiwan; representing over 49% of all business numbers
and many employ few people and have little turnover.

146. 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2017 Sample vs. Total Taiwan
Sample Taiwan

147. Breakdown of Industry Classifications
Our sample is more heavily skewed towards the
Medical Devices, Management Consulting, Chemical
and Pharmaceutical industries.

148. NGO
Securities, Mutual Funds, Asset Management
Semiconductor and Other Electronic Component Manufacturing
Arts, Entertainment, and Recreation
Automotive
Education and Training
Risk Management
Accounting Services
Foods and/or Non-Alcoholic Beverages
Media
Retail Trade
Sourcing and Procurement
Health Care Services
Consumer Packaged Goods
Engineering and Technical Services
Insurance
Travel and Leisure
Banking Services
Finance
Human Resource Consulting
Legal Services
Chemicals
Pharmaceuticals
Management Consulting Services
Medical Devices
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%
Industries in our 2017 Sample

149. Accommodation and Food Services
Agriculture, Forestry and Fishing
Alcoholic Beverages
Communications Equipment Manufacturing
Component Manufacturing - General
Construction
Information Technology
Lobbying Services
Management of Companies and Enterprises
Navigational, Measuring, Electro-medical, and Control instruments…
Real Estate and Rental and Leasing
Telecommunication Services
Testing, Inspection, Certification Services
Transportation and Warehousing
Waste Management and Remediation Services
Wholesale Trade
Aerospace
Computer Software Programming Services
Conglomerate
Defense
Energy
Logistics and Distribution
Manufacturing - General
Market Research Services
NGO
0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4%
Industries in our 2017 Sample (continued)

150. Type of legal entity
Three out of four (74.5%) of businesses in this sample
are either a Branch office, a Subsidiary, or a Taiwan-
incorporated company.

151. 1.2%
1.2%
1.7%
2.3%
5.2%
5.2%
8.7%
21.4%
21.4%
31.8%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
NGO
Not for Profit
Representative Office
Other
Partnership
Joint Venture
Independent agent
Taiwan incorporated company
Subsidiary
Branch office
2017 Sample Profile by Legal Entity

152. Time in Taiwan
In terms of the time that there has been a physical
presence in Taiwan, our sample is split roughly into four
‘ages’:
– 28% are relatively new to Taiwan with less than 15 years
here
– 24% have been established between 16-25 years
– 21% have been established for 26-35 years
– And those who are well-established (more than 35 years)
at 27%.

153. 0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Length of Physical Business Presence in Taiwan

154. Number of Full Time Equivalent Employees
(FTEE)
Our 2017 sample covers a wide spectrum of employers
- from the very small to the very large. However, our
sample generally represents larger employers than
found in the Taiwan business population. For example:
– 10% of our sample employ 5 or less FTEE. This compares to
79% of all Taiwanese business entities who are micro
employers.
– more than 97% of Taiwanese employees are employed by
SME’s versus our sample of only 55%.

155. 0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Number of FTEE

156. Statistical Testing for Significance
When comparing the results against previous years
surveys we performed a Chi-square test for the
comparison of two proportions (from the two
independent samples), expressed as a percentage.
Note that for this Chi-square test, Yates' correction for
continuity is applied and that P-values are two-sided
(or two-tailed). When the calculated P value is less than
0.05, the conclusion is that the two proportions are
significantly different.
Throughout the results, we have highlighted the
difference between the two proportions (at the 95%
confidence level) via our commentary when we have
detected a significant change.

157. For more details, please contact…
Gordon Stewart, Managing Director,
Independent Marketing & Research Limited via:
gordon@independentmarketing.com.au