3. In its sixth annual Business Climate Survey, completed in late
2015, AmCham Taipei invited the 406 voting representatives
from our member companies (usually the top executive) to
answer a series of questions about the business environment in
an online questionnaire. In conducting the survey and analyzing
the data, the Chamber was grateful for the professional guidance
of Gordon Stewart of Independent Marketing & Research.
I would also like to express my thanks to the 208 member-
company executives who took the time to complete the survey.
The high 51% response rate, which produced a solid quantity of
data, shows that our members keenly recognize the value of this
exercise in framing the Chamber’s policies and our
recommendations to the Taiwan and U.S. governments.
Message from 2016 AmCham Chairman –
Dan Silver
4. In the surveys conducted over the past six years, we have
intentionally asked our business leaders the same, or nearly the
same, set of questions. As a result, we have been able to track
the degree of progress – or the lack thereof – across key issues
over that period. Overall, the results of the six surveys have been
quite consistent. Our companies regard Taiwan as a good place to
do business because of such attributes as its industrious and
well-educated workforce and its safe and hospitable living
environment. A high proportion of respondents reported that
their companies are profitable and are continuing to increase
investment and expand employment.
Message from 2016 AmCham Chairman –
Dan Silver
5. In this year’s survey, however, a sharp drop occurred – to 47%
from 60% last year – in the number of respondents expressing
optimism about the five-year business outlook for Taiwan. Many
factors may have contributed to that decline, including the
sluggish state of the world and Taiwan economies, and
uncertainties over whether Taiwan will be able to avoid
marginalization by gaining entry into emerging regional trade
groupings such as the Trans-Pacific Partnership (TPP). An
important section of the survey each year asks the business
executives to identify factors having the most impact on their
business operations. This year the number-one item mentioned
was “inadequate or outdated laws,” followed by “inconsistent
regulatory interpretations.”
Message from 2016 AmCham Chairman –
Dan Silver
6. Among the other categories cited within the top 10 were
“insufficient notice before changes to regulations or laws are
introduced,” “inconsistent application of the Rule of Law,”
“differences between local and internationally accepted
standards,” and “lack of transparency.” Fortunately, with an eye
to preparing Taiwan’s prospective bid for TPP membership – and
more fundamentally to enhancing Taiwan’s competitiveness in
the global marketplace – the current government has already
been seeking to bring Taiwan’s regulatory procedures more fully
in line with standard international practices. We hope that the
long transition period before the new administration takes office
does not slow the process, and that the new government will
carry the reform effort forward with vigor.
Message from 2016 AmCham Chairman –
Dan Silver
7. In particular, revising the Administrative Procedure Act to ensure
ample opportunity for stakeholder response to proposed new
regulations would go a long way in remedying existing
shortcomings in the regulatory regime. The survey results also
show an interest in seeing more diversification in Taiwan’s
external economic relations. A substantial 87% of respondents
support Taiwan’s pursuit of membership in the TPP, for example,
and two-thirds consider that the resumption of Trade and
Investment Framework Agreement (TIFA) talks with the U.S. in
2013 has been beneficial to Taiwan. Finally, since the business
focus for the great majority of our member companies is the
local market, one of their chief concerns is the state of domestic
demand.
Message from 2016 AmCham Chairman –
Dan Silver
8. We encourage the government to undertake programs and
policies designed to boost consumption, including broadening
employment opportunities and investing in the development of
domestic infrastructure and human capital. AmCham Taipei
offers the findings of the 2016 Business Climate Survey as
reference for the new administration that will soon take office in
Taiwan, and assures the new government of the Chamber’s
commitment and support for initiatives to bolster Taiwan’s
economic competitiveness.
Dan Silver
2016 AmCham Taipei Chairman
Message from 2016 AmCham Chairman –
Dan Silver
12. Key Takeaways: Profitability
Current profitability
remains in the “Relatively”
to the “Very Profitable”
zone for more than two-
thirds of our companies.
This has been the case for
six consecutive years.
13. Key Takeaways: 2016 Forecast
Forecasts for 2016
Revenue & Profitability
growth, and levels of new
Investment, are trending
lower.
14. Key Takeaways: 5-Year Business
Outlook a cause for concern
A concerning and
statistically significant
decline (down from 60% to
47%), in the number of
leaders expressing
optimism in their outlook
for their next five year
business forecast.
The trend, when lagged by
1 year, tracks closely with
the trend in y-o-y Gross
Domestic Product (GDP)
growth.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
2011 2012 2013 2014 2015
5yr.Outlook(lagged)
GDPGrowth
Taiwan’s y-o-y GDP growth
GDP 5-yr Outlook
15. Key Takeaways: Employment
Half of all our member
companies increased their
employment numbers either
“slightly” or “significantly”,
during 2015. Whilst less than
2014’s increase, it’s still a
very encouraging reflection
of our members’ businesses.
The great news is they plan
to hire still more in 2016.
16. Key Takeaways: The Issue that has
regressed the most
Since we started
measuring ‘Political
turmoil’, it is the one issue
to have regressed the
most in the past few years.
The intensity by which it is
felt is evident by the
negative scores it achieves
- which surpass the
closest, ‘other issues’, by
20-40%.
150
200
250
300
2011-2013 2012-2014 2013-2015
Political turmoil in Taiwan
5th Factor
4th Factor
3rd Factor
2nd Factor
17. Key Takeaways: Issues with Impact
The top 5 issues adversely
impacting our business
leaders are:
1. Inadequate/Out-dated laws
2. Inconsistent regulatory
interpretation
3. Drop in domestic demand
4. Governmental bureaucracy
5. Insufficient notice before
changes to regulations or
laws are introduced.
18. Key Takeaways:
Mergers & Acquisitions (M&A)
On average, 1 in 8 of our
member companies are
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.
19. Key Takeaways:
Support for Trade Liberalization
There is very strong support
for Taiwan’s entry into the
TPP.
Along with support for:
ECFA; TIFA; China-Taiwan
Cross-Strait Services Trade
Agreement (CSSTA); and the
establishment of a USA-
Taiwan Bilateral Investment
Agreement (BIA).
20. Key Takeaways:
Human Resources
As in past years, the survey-
takers praised the caliber of
the Taiwan workforce in
most respects, but found
deficiencies in the degree
of creativity, initiative, and
innovativeness. Certain
industry sectors are also
having difficulty recruiting
sufficient talent.
21. Key Takeaways:
Quality of Living
AmCham Taipei business
leaders consider Taiwan to
be a safe and friendly place
to live, with a good
healthcare system. The
main negative is the degree
of “English-friendliness” of
the environment.
23. 2015: Another Profitable Year for
Business
The majority (67%), of our business leaders
experienced either a “relatively” or “very
profitable” year in 2015. A very similar result to
prior years.
25. 2016: Business slight decline?
Compared to 2015, the majority of our
business leaders are forecasting a slight decline
for 2016 in their revenues and profits.
27. Short-term investment : Levelling-off
After a period of recovery and stabilization,
forecasted levels of investment are likely to
remain unchanged or to decrease slightly in
2016.
28. 1%
3%
5%
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%
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
29. Unfortunately, or realistically…
Taiwan is generally viewed as “Not a high priority” at the
global head office level – with more than half of our
member companies saying it is not in the top ten priority
markets.
We have said in previous years and repeat again, that
Taiwan needs to better position and market itself to try
and gain more global attention as a business destination.
Changes to: personal taxation rates; improvements to
direct foreign investment rules and incentives; research &
development incentives; and lowering bureaucratic
barriers, amongst other things, may go a long way here.
31. Looking forward five years…
After a fairly consistent and optimistic outlook
over recent years, this year there has been a
significant (statistically), decline in the level of
positivity. Now, less than 50% of our members
are either “slightly” or “optimistic” about the
next 5 years of business in Taiwan. This should
be a major cause for concern for the next
government.
32. 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%
Pessimistic Slightly Pessimistic Neutral Slightly Optimistic Optimistic
How would you describe your five-year business outlook
for Taiwan?
2011 2012 2013 2014 2015 2016
33. 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 general indicator
of economic activity. From our survey over the
last 6 years, Taiwan appears to have a relatively
low, but consistent level of M&A activity.
34. Merger & Acquisition (M&A) Activity
Over the past six 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
(5%), and some considered M&A but didn’t pursue
it (20%). However, for the vast majority of business
leaders (69%), M&A, understandably, simply isn’t
on their radar in any given year.
35. 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%
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?
2011 2012 2013 2014 2015 2016
36. 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 enlarge customer
base, gain synergies (by reducing costs and
improving profits),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.
37. 0 2 4 6 8 10 12
Gain Taxation advantages
Improve IPO possibility
Acquire management team
Acquire key local brand(s)
Gain access to China market
Defensive move to counter competitor(s)
Acquire business license in a restricted industry
Acquire technology
Acquire capacity
Gain greater local market access
Ability to gain synergies (reduce costs - improve profits)
Enlarge customer base
Top Objectives of M&A during 2015
Primary Secondary Tertiary
38. Finding an “appropriate target” the
major challenges to M&A in 2015
Followed by negotiating its valuation, and
obtaining government approvals.
We note that inconsistency in interpretation of,
and a lack of transparency in, government
regulations, list prominently in the challenges
standing in the way of mergers and acquisitions.
39. 0 2 4 6 8 10 12
Information leakage
Negotiating the letter of intent
Language issues
Transparency of regulations
Inconsistent regulatory interpretations
Obtaining government approvals
Financial issues
Obtaining permission for target to be sold
Post-deal restructuring
Cultural issues
Conducting due diligence
Negotiation of valuation gap
Finding an appropriate target
Major Challenges of M&A During 2015
Major Challenge Second Third
40. One-in-five interested in M&A for 2016
In the past 3 years, 19% of our business claim
they would “definitely” or “possibly” consider
M&A in the next 12 months.
42. What impacts their business?
Inadequate/Out-dated laws this year has
topped the list of greatest negative impacts on
our members’ businesses, followed by
Inconsistent regulatory interpretation and
Changes in local demand”.
Other consistent (negative) impacts are:
– Governmental Bureaucracy
– Insufficient notice before changes to regulations or
laws are introduced
– Inconsistent application of the Rule of Law
43. Which of the following impacts your operation in Taiwan?
2016 Ranking
Issue 2016 2015 2014 2013 2012 2011
Inadequate/Out-dated laws 1 4 5 4 6 5
Inconsistent regulatory interpretation 2 1 2 2 2 3
Changes in local demand 3 2 3 1 1 1
Governmental Bureaucracy 4 3 1 3 4 2
Insufficient notice before changes to regulations or laws are
introduced
5 8 6 6 New in 2013
Inconsistent application of the Rule of Law 6 5 4 New in 2014
Ability to recruit appropriate new personnel 7 6 9 5 3 4
Differences between local and internationally accepted
standards
8 7 7 New in 2014
Currency Exchange rate fluctuations 9 16 12 7 5 7
Lack of transparency 10 9 8 9 10 10
44. Issue 2016 2015 2014 2013 2012 2011
Political turmoil in Taiwan 11 10 13
New in
2014
China-Taiwan government relations 12 11 16 13 7 8
Changes in employment expenses 13 13 10 8 8 9
Customs & Trade regulations 14 12 14 15 11 16
Corporate Taxation levels 15 14 15 11 9 6*
Domestic protectionism 16 15 11 12 12 12
Government reform/restructuring 17 17 17 10 New in 2013
Personal Taxation levels 18 18 18 18 22 6*
Intellectual Property Rights infringements 19 23 21 14 15 15
USA - Taiwan government relations 20 20 23 22 16 19
*Combined in 2011
Which of the following impacts your operation in Taiwan?
2016 Ranking continued
45. Issue 2016 2015 2014 2013 2012 2011
Changes in overseas demand 21 22 20 16 21 18
Direct flights to/from Mainland 22 21 22 17 14 28
Inadequate Infrastructure (Power, Water, Telecommunications,
Transport, etc.)
23 30 29 26 27 21
Financial Industry reform 24 29 31 20 23 23
Government procurement procedures 25 28 26 27 26 25
The Economic Cooperation Framework Agreement (ECFA) 26 24 30 28 18 14
Changes in Energy costs 27 25 19 New in 2014
Ability of PRC personnel to travel to Taiwan 28 34 33 New in 2014
Corruption 29 19 24 19 17 22
Changes in Tariffs 30 26 27 21 20 24
Which of the following impacts your operation in Taiwan?
2016 Ranking continued
46. Issue 2016 2015 2014 2013 2012 2011
Changes in Raw Material costs 31 31 32 24 25 26
Changes in Transport costs 32 27 25 25 19 17
Changes in Financing costs 33 32 28 23 24
New in
2012
EU - Taiwan government relations 34 33 35 29 28 27
Ability of PRC personnel to work in Taiwan 35 36 36
New in 2014
Illegal imports 36 35 34 30 29 29
Ability to secure credit, locally 37 37 37 New in 2014
Slow processing of PRC personnel work permits 38 New in 2016
Ability to raise capital, locally 39 38 38 New in 2014
Access to Private Equity financing 40 39 39 New in 2014
Which of the following impacts your operation in Taiwan?
2016 Ranking continued
47. “Lack of double tax treaties and other trade
agreements with other countries than US, China
for example Korea and Japan.”
“Biased TV talk shows & media reports.”
“Lack of motivated well-educated design staff.”
“Government healthcare funding and annual
price cut.”
What impacts their business?
Other Direct Quotations
48. Each year we have asked: “Over the past 3 years, how
would you describe the progress made in Taiwan in (list
of issues).”
We are therefore able to cross-tabulate the progress
and intensity* of these impacts over time.
Looking at the top ten issues that have the greatest
impact on our member companies, we can see that
since 2008-2010, in the views of our business leaders,
they all show a trend of a lack of progress.
*Intensity is a numerically weighted measure applied to the calculation of the net difference between progress and regress.
Analysis of the Top 10 impacts
49. -100
-50
0
50
100
150
200
250
2008-2010 2010-2012 2012-2014
1. INADEQUATE/OUT-DATED LAWS
-100
-50
0
50
100
150
200
250
2008-2010 2010-2012 2012-2014
2. INCONSISTENT REGULATORY
INTERPRETATION
Intensity and trend of perceived lack
of progress in Top 10 impacts
51. -100
-50
0
50
100
150
200
250
2008-2010 2010-2012 2012-2014
5. INSUFFICIENT NOTICE BEFORE
CHANGES TO REGULATIONS OR LAWS
ARE INTRODUCED
-100
-50
0
50
100
150
200
250
2008-2010 2010-2012 2012-2014
6. INCONSISTENT APPLICATION OF
THE RULE OF LAW
Intensity and trend of perceived lack
of progress in Top 10 impacts
52. -100
-50
0
50
100
150
200
250
2008-2010 2010-2012 2012-2014
7. ABILITY TO RECRUIT APPROPRIATE
NEW PERSONNEL
-100
-50
0
50
100
150
200
250
2008-2010 2010-2012 2012-2014
8. DIFFERENCES BETWEEN LOCAL AND
INTERNATIONALLY ACCEPTED
STANDARDS
Intensity and trend of perceived lack
of progress in Top 10 impacts
53. -100
-50
0
50
100
150
200
250
2008-2010 2010-2012 2012-2014
9. CURRENCY EXCHANGE RATE
FLUCTUATIONS
-100
-50
0
50
100
150
200
250
2008-2010 2010-2012 2012-2014
10. LACK OF TRANSPARENCY
Intensity and trend of perceived lack
of progress in Top 10 impacts
54. The Lack of Progress in Taiwan
on Key Issues
When we view the issues that have made progress over the
period 2008-2015 time horizon, some good strides have made to
help business – especially in connection with China.
There has also been some progress, on Taiwan–USA relations
and intellectual property rights enforcement.
In the following list, those items in green have shown progress.
All other issues have either regressed or stagnated.
Recently, “political turmoil” has regressed the most.
55. Areas where regress, or little progress, has occurred in the past 3 years.
Worst to Best ranking
Issue
2013-
15
2012-
14
2011-
13
2010-
12
2009-
11
2008-
10
Political turmoil in Taiwan 1 1 1
Personal Taxation levels (*combined with Corporate in 2010) 2 2 15 11 9 26*
Changes in Local Demand 3 16 3 3 20 20
Governmental reform/restructuring 4 15 11 15 19 18
Ability to Recruit Appropriate New Personnel 5 13 5 1 5 3
Consistency of the application of the Rule of Law (i.e., well-
established and clearly written rules, regulations, and legal
principles)
6 7 9
Consistency of regulatory interpretations 7 10 7 2 2 1
Governmental Bureaucracy 8 5 6 4 11 11
Sufficiency of notice before changes to regulations or laws are
introduced
9 12 8
Changes in Employment expenses 10 8 4 5 1 2
56. Issue 2013-
15
2012-
14
2011-
13
2010-
12
2009-
11
2008-
10
Domestic protectionism 11 3 10 6 3 7
Revision of inadequate/Out-dated laws 12 11 12 14 9 5
Changes in Overseas Demand 13 26 19 12 16 24
Government procurement procedures 14 6 16 9 7 9
Changes in Financing costs 15 21 20 10 8 8
Illegal imports 16 23 27 16 12 10
Transparency 17 24 18 18 15 15
Changes in Tariffs 18 18 31 19 18 16
Ability to secure credit, locally 19 29 23
Customs and trade regulations 20 25 26 22 17 17
Areas where regress, or little progress, has occurred in the past 3 years.
Worst to Best ranking
57. Issue 2013-
15
2012-
14
2011-
13
2010-
12
2009-
11
2008-
10
Changes in Transport costs 21 20 13 8 6 12
Access to Private Equity financing 22 17 25
Differences between local and Internationally accepted standards 23 27 28
The Economic Cooperation Framework Agreement (ECFA) 24 30 27 27 27 28
Corporate Taxation levels 25 14 32 21 26 26*
Changes in Raw Material costs 26 9 14 7 4 4
Changes in Energy costs 27 4 2
Financial Industry Reform 28 28 21 13 13 13
Management of Currency Exchange rate fluctuations 29 32 24 17 14 14
Ability to raise capital, locally 30 19 22
Areas where regress, or little progress, has occurred in the past 3 years.
Worst to Best ranking
58. Issue 2103-
15
2012-
14
2011-
13
2010-
12
2009-
11
2008-
10
Corruption 31 22 17 20 24 19
Infrastructure (Power, Water, Telecommunications, Transport,
etc.)
32 36 29 23 25 22
EU - Taiwan government relations 33 31 30 24 23 25
Processing of PRC personnel work permits 34
Ability of PRC personnel to work in Taiwan 35 34 35
Intellectual Property rights enforcement 36 33 33 25 22 23
USA - Taiwan government relations 37 35 34 26 21 21
China - Taiwan government relations 38 37 38 28 28 27
Ability of PRC personnel to travel to Taiwan 39 38 37
Direct flights to/from the Mainland 40 39 39 29 29 29
Areas where regress, or little progress, has occurred in the past 3 years.
Worst to Best ranking
59. The major worries confronting
business
A slowdown in the global economy is of greatest
concern for our business leaders.
Downturns in Taiwan’s domestic consumption
and in the Chinese economy along with
uncertainty in Taiwan’s policy towards China are,
unsurprisingly, the next greatest worries for
them.
Worsening political unrest within Taiwan, round-
out the top five concerns.
60. 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Cybersecurity risks to enterprise
Taiwan Dollar (TWD) appreciation
Taiwan unemployment rising
Taiwan inflation rising
Economic slowdown in Europe
Energy shortage in Taiwan
Economic slowdown in USA
Decreased exports
Enactment of TPP without Taiwan as a member
Lack of Human Resources
Taiwan Dollar (TWD) depreciation
Increased governmental interference
Increased domestic political unrest
Uncertainty about Taiwan's cross-Strait policy
Economic slowdown in China
Slowdown in Taiwan's domestic consumption
Global economic slowdown
What are the major risks facing your entity in the coming years?
61. How can governments help?
We asked: What are the main things the
Taiwanese and the USA governments could do in
the next 12 months to help business?
For the Taiwan government the top issues are the
recurring themes of: Simplify Government
Bureaucracy, Reduce Political Turmoil, Resolve
Inadequate/Out-dated laws, and Reduce Personal
taxation.
62. Top 10 things Taiwan Government Could do to Help
Issue 2016 2015 2014 2013 2012 2011
Simplify Government Bureaucracy 1 2 2 1 1 1
Reduce Political Turmoil in Taiwan 2 1 1
Resolve Inadequate/Out-dated laws 3 3 7
Reduce Personal Taxation 4 5 6 3 3 2
Devise plan to stimulate local demand 5 6 3
Provide sufficient notice before changes to
regulations or laws are introduced.
6 8 8
Remove differences between local &
internationally accepted standards
7 4 5
Consistent application of the Rule of Law 8 7 4
Improve Research & Development incentives 9 15
Reduce domestic protectionism 10 9 11
63. Other things Taiwan Government Could do to Help (Ranked)
Issue 2016 2015 2014 2013 2012 2011
Educate civil servants on international
regulatory best-practices
11 27
Increase Direct Foreign Investment incentives 12 14
Implement Financial Industry Reform 13 26
Negotiate and sign more bilateral trade deals
with other (non-US) countries
14 18
Devise plan to stimulate Overseas
Demand (e.g. exports, tourism)
15 30
Liberalize the Labour market 16 13 23 5 5 10
Improve Inadequate Infrastructure (Power,
Water, Telecommunications, Transport, etc.)
17 25
Reduce Corporate Taxation further 18 20
Improve Government procurement
procedures
19 22
Tighten enforcement of Intellectual Property
rights
20 23
64. More Things Taiwan Government Could do to Help (Ranked)
Issue 2016 2015 2014 2013 2012 2011
Manage Currency Exchange rate fluctuations 21 29
Broaden ECFA 22 10 9 10 7 7
Negotiate and sign a Bilateral Investment
Agreement with the USA
23 12 14 16 19
Reduce Corruption 24 16
Provide adequate transition or grace period
when implementing new laws and regulations
25
Ratify the China-Taiwan Service Trade Pact
(CSSTA)
26
Reduce Tariffs 27 24
Reduce Employment expenses 28 11 24
Pass Free Economic Pilot Zones (FEPZ)
legislation
29 19
Conduct more regular follow-up meetings TIFA
items with the USA
30 34
65. How else could Taiwan government
help? Additional suggestions
“Build Taiwan as expatriate hub for NE Asia”
“All of the above. Taiwan must modernize it's entire
bureaucracy, it's banking, eliminate protectionism, it's
preferential treatment of domestic airlines and join the
21st century. In many ways China is more forward
thinking in business.”
“Allow foreign workers to come to Taiwan (non PRC) to
fill the labour shortages.”
66. How else could Taiwan government
help? Additional suggestions
“Improve education system to improve R&D and
innovation capabilities.”
“Reduce dividend withholding tax for foreign investors.”
67. Main things USA Government Could do to Help (Ranked)
Issue 2016 2015 2104
Support Taiwan's admission into the TPP 1
Assist Taiwan to prepare for accession to TPP 2 1
Negotiate and sign a Bilateral Investment Agreement with Taiwan 3 2 1
Continue to liaise with Taiwan on USA experience regarding regulatory
coherence
4
Help establish cooperative exchanges between US and Taiwan regulatory agencies 5
Reduce Personal Taxation 6 6 4
Send more senior US Government officials to visit Taiwan 7 4 5
Ensure that regular meetings are held with Taiwan under the TIFA process 8
Reduce Corporate Taxation 9 5 3
Repeal or re-evaluate the Foreign Account Tax Compliance Act (FATCA) 10 7
Resolve Agricultural disputes with Taiwan 11 9
Negotiate and finalize an Extradition Treaty with Taiwan 12 8 6
Conduct more regular follow-up of TIFA items with Taiwan 3 2
68. How else could USA government help?
Additional suggestion…
“Greatly reduce ‘pork lobbying’ -- there are other
far more important issues and it harms the
American ‘brand’ every time it is brought up,
which damages our business.”
69. Taiwan Government Incentives
For the third consecutive year, we asked our
members if they had taken advantage of any
incentives provided by the various levels of
government in Taiwan. The answer was that the
majority had not - only 8% did.
70. Don't know 12%
Don't know 19%
Don't know 15%
No, 73%
No, 71%
No, 76%
Yes, 15%
Yes, 10%
Yes, 8%
2014
2015
2016
Has your company participated in, or taken advantage of,
any of the Taiwan government's business incentives?
71. Taiwan Government Incentives
The most popular incentives for the small number who have
qualified and availed themselves are:
• Free Trade Zone Incentives
• Tax Incentives for R&D
• Indirect Tax Incentives for Science Parks, Export Processing
Zones, Bonded Factories, and Bonded Warehouses
• Industrial Technology Development Program
It should be noted that in some cases, multiple incentives
were utilized.
72. 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.
We estimate that AmCham member companies
employ approximately a quarter of a million full
time equivalent employees in Taiwan.
As in past years, our members show continuing
growth in employee numbers.
73. During 2015
• 51% (versus 55% in 2014) of AmCham
companies increased their FTEE numbers
either significantly or slightly
• 32% (same as 2014) maintained their numbers
of FTEE
• 17% (2014 in 13%) decreased their numbers
either slightly or significantly
75. Our members were reasonably accurate in the
forecasts they made during 2014 about 2015.
If anything, they under-estimated the actual growth.
2014 Forecast and 2015 Actual
76. 2%
15%
32%
43%
8%
1% 0%
8%
49%
39%
2%
Don't know/Can't say Decreased significantly Decreased slightly No change Increased slightly Increased significantly
Changes in FTEE –Actual vs. Forecast
2015 Actual 2014 Forecast
77. When the decreases are taken away from the increases
in FTEE, and numerically weighted to take into account
the degrees of change, we see that in 2015 there was a
net gain in FTEE numbers of 38%. This compares to
gains of 47% and 33% in 2014 and 2013, respectively.
During 2015
79. In 2015, net FTEE growth occurred across a variety of
business sizes – from the quite small to the very large –
with only two exceptions (6 to 10 and 300 to 350).
FTEE Growth by Employer Size
80. -2.5 -0.5 1.5 3.5 5.5 7.5 9.5 11.5
5 or less
6-10
11-20
21-30
31-40
41-50
51-75
76-100
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
More than 2,000
2015 % Net Change in FTEE’s by Number of Employees
81. Top Human Resource Consulting Group 4 Foods and/or Non-Alcoholic Beverages
Group 2 Chemicals Group 4 Insurance
Group 2 Finance Group 4 Legal Services
Group 2 Medical Devices Group 4 Logistics and Distribution
Group 3 Banking Services Group 4 Pharmaceuticals
Group 3 Consumer Packaged Goods Group 4 Real Estate and Rental and Leasing
Group 3 Manufacturing - General Group 4
Semiconductor and Other Electronic Component
Manufacturing
Industries that increased FTEE in 2015
82. Hiring forecast to increase in 2016
• The majority (41%) of our members plan to
increase their headcount during 2016
• 46%, will maintain their 2014 levels
• Only 11% anticipate reducing their headcounts
slightly
83. 1% 0%
8%
49%
39%
2%
1% 2%
7%
42%
45%
4%
1%
2%
9%
46%
37%
4%
Don't know/Can't say Decrease significantly Decrease slightly No change Increase slightly Increase significantly
Hiring Forecasts for the Coming Year
(Forecast Changes in FTEE)
2014 Forecast 2015 Forecast 2016 Forecast
84. On a numerically weighted basis, 31% of our business
leaders are forecasting an increase in employment
numbers. This compares with last year’s forecast of
42% and the 35% forecast in 2014.
Forecast growth in 2016
86. Growth is forecast over most companies regardless of
size – with three, mid-sized exceptions:
• 300 to 350 FTEE’s
• 400 to 450
• 450 to 500.
Forecast FTEE by Number of Employees
87. -2.5 -0.5 1.5 3.5 5.5 7.5 9.5 11.5
5 or less
6-10
11-20
21-30
31-40
41-50
51-75
76-100
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
More than 2,000
Net % Forecast change in FTEE’s by number of Employees
88. Top Human Resource Consulting Group 5 Foods and/or Non-Alcoholic Beverages
2 Medical Devices Group 5 Finance
3 Insurance Group 5 Health Care Services
Group 4 Logistics and Distribution Group 5 Legal Services
Group 4 Pharmaceuticals Group 5 Manufacturing - General
Group 4
Real Estate and Rental and
Leasing
Group 5 Market Research Services
Group 4 Accounting Services Group 5
Semiconductor and Other Electronic Component
Manufacturing
Group 5 Banking Services Group 5 Travel and Leisure
Industries forecasting FTEE growth 2016
89. Human Resources – Remain a big issue
Deficiencies in the quantity and quality of
available human resources are one of the
highest 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. First the positives…
90. Taiwanese Human Resources are seen
as …
Hard-working, very trustworthy, easy to develop
or train, highly productive, very loyal, extremely
well-educated, generally show a high degree of
emotional intelligence quotient (EQ), and
generally well-rounded. A very positive profile of
the workforce.
Understandably, no major changes where seen
in this year’s survey compared to prior years.
91. 0 50 100 150 200 250
Well-rounded
Show a high degree of Emotional Intelligence (EQ)
Easy to retain
Extremely well educated
Very loyal
Highly productive
Easy to develop/train
Very trustworthy
Hard working
Net Positive Perceptions of Human Resources in Taiwan
92. However…
They are perceived as being difficult to recruit,
not being innovative, not being of ‘World-class’
standard and they do not display a great deal of
creativity. These are enduring perceptions over
the six years of this study.
93. -250 -200 -150 -100 -50 0
Show a great deal of initiative
Show a good deal of creativity
Good English Language skills (If required)
Innovative
Of 'World class' standard
Easy to recruit
Net Shortcomings of Human Capital in Taiwan
94. Overall perceptions
Whilst the preceding charts show the net
differences in scores of positive and negatives
perceptions, it should be remembered that
there are varied views with many opposing
views on the same criterion. The next chart
shows these.
95. -150 -100 -50 0 50 100 150 200
Show a good deal of creativity
Of 'World class' standard
Innovative
Show a great deal of initiative
Show a high degree of Emotional Intelligence (EQ)
Easy to recruit
Good English Language skills (If required for role)
Well-rounded
Easy to retain
Extremely well educated
Easy to develop/train
Highly productive
Very loyal
Very trustworthy
Hard working
Perceptions of Human Capital in Taiwan
Strongly Agree
Agree
Disagree
Strongly Disagree
96. Trans Pacific Partnership (TPP)
The TPP is s a free-trade agreement currently being
negotiated by 12 nations (US, 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)
97. TPP - Business leaders are sure that …
• Taiwan is capable of meeting the high
standards required for membership into the
Trans Pacific Partnership (TPP).
• Whilst only 43% are convinced that Taiwan
will be accepted as a member of the TPP,
nonetheless, a resounding majority (87%) of
leaders believe that Taiwan should continue to
pursue membership with only 2% suggesting
that it shouldn’t.
98. Yes, 65%
Yes, 68%
Yes, 60%
No, 13%
No, 12%
No, 12%
Don't know, 23% Don't know, 20%
Don't know, 28%
2014 2015 2016
Is Taiwan capable of meeting the high standards required
for membership into the TPP?
99. Yes, 40%
Yes, 36%
Yes, 43%
No, 21%
No, 19%
No, 11%
Don't know, 39%
Don't know, 45% Don't know, 46%
2014 2015 2016
Will Taiwan be accepted as a TPP member?
100. Yes, 83% Yes, 83%
Yes, 87%
No 2% No 3%
No 2%
Don’t know, 15% Don’t know, 14%
Don’t know, 11%
2014 2015 2016
Should Taiwan pursue membership of the TPP?
101. TPP: Additional comments
“Taiwan will have to substantially reduce or
eliminate domestic protectionism to join. If it
does not it will not be able to join- with
disastrous economic consequences.”
“The risk of China blocking Taiwan's entry is
high. Preparations should be made to avoid this
possible eventuality.”
102. TPP: Additional comments
“In theory I believe Taiwan has the capacity but
to meet it will require lots of changes in
particular in terms of mindset and governance
across government institutions so not sure they
will be able to meet the timelines.”
“Our business's existence in Taiwan relies on
Taiwan being accepted as a TPP member”
103. TPP: Additional comments
“Taiwan has to be clear, which strategic industries
or capabilities it has to develop. The optoelectronic
industry in Taiwan is facing strong headwind from
China and might not remain competitive. New
industries will have to be developed. Taiwan is a
small market and mainly benefiting from export.
Whether TPP will be helpful for that by increasing
export opportunities or just increases competition in
the country (maybe to the benefit of the consumers,
depending on the agreed upon standards), will
depend on the future focus of Taiwan. Assuming
that the agreed upon standards will not put
consumers at risk, the export opportunities should
outweigh the increased competition.”
104. TPP: Additional comments
“TPP or not, Taiwan really needs to step up in its
regulatory reform if it doesn't want to be
marginalized economically.”
“The rationale behind the TPP is purely security-
centric, although politicians cannot say this
aloud. Taiwan should make any necessary
sacrifices to join, but the domestic protectionist
sentiment is too strong. Also, US commitment is
wavering due to failure of politicians to
recognize the security imperative.”
106. “Emphatic, public support should be given by the U.S.”
“U.S. needs to treat Taiwan as an equal partner.”
“TPP is crucial to USA foreign policy and crucial to
Taiwan trade policy.”
Additional Comments
107. “But Taiwan has to make smart decisions on its own and
align itself with the basic standards required. This is clearly
a pact aimed at showing China that it cannot do whatever it
wants in Asia, and part of that is sending a message that
the US stands by Taiwan (China gets the message; they
know this is not really about trade), but if Taiwan does not
reform and take care of itself (economically, as well as in
the security realm), the government here cannot expect US
elected officials to stand by it indefinitely for purely
strategic reasons, which the US politicians themselves
apparently do not even understand. Thus, the TPP can be
seen as a barometer of the US's commitment to Taiwan and
Taiwan's commitment to itself.”
Additional Comments
108. China-Taiwan Cross-Strait Services
Trade Agreement (CSSTA)
In June, 2013 China and Taiwan signed a services
trade agreement (although, this has still not yet
been 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 what they thought
about it and who they believed would gain (or
lose) from it.
110. Assist, 81%
Assist, 70%
Assist, 66%
Harm, 5%
Harm, 7%
Harm, 0%
Don't know/can't say, 14%
Don't know/can't say, 23%
Don't know/can't say, 34%
2014 2015 2016
How will the China-Taiwan Cross-Strait Services Trade
Agreement (CSSTA) impact China
111. Assist, 23% Assist, 26% Assist, 25%
Harm, 37%
Harm, 11%
Harm, 9%
Don't know/can't say, 39%
Don't know/can't say, 63% Don't know/can't say, 66%
2014 2015 2016
How will the China-Taiwan Cross-Strait Services
Agreement (CSSTA) impact USA
112. “China cannot be trusted, they violate Human Rights
etc. Any cooperation with China only benefits China,
any other partnerships will provoke China.”
“There are pros and cons for Taiwan: tourism will be
bringing more money but also might have a negative
effect on housing prices. More competition might be
beneficial for consumers, however, the standards for
health and safety will be very important.”
Unprompted Additional Comments
113. “The help it will give China and harm it will bring to
Taiwan will be in the geostrategic/security realm.
Economically, it would be good for Taiwan (although
would only benefit the few ultra-rich), and will have
little to no economic effect on China or the US.”
“In the long run Taiwanese people are better off
without China investment.”
Unprompted Additional Comments
115. “I am against such an agreement despite the short term
positive effects for businesses, it will be harmful to the
general population in the long run.”
“And the sooner the better.”
“Focus on goods first and expand to other markets
before working on services with any other.”
Unprompted comments on the question:
Should the Legislature ratify the CSSTA?
116. “Taiwan’s credibility continues to be undermined by
Legislative process and inability of executive
government to make agreements.”
“China will always do what is in their own interest, look
at the South China Sea issue. Any agreement that gives
China access to Taiwan is dangerous.”
“It will all depend on the standards, which have to be
established, in order to prevent harm to the
consumers.”
Unprompted comments on the question:
Should the Legislature ratify the CSSTA?
117. “Security trumps economics. Period. The fact that the
Chinese government is so intent on pushing through an
agreement with Taiwan that, despite what proponents
claim, offers essentially no economic benefit to China is
concerning. If not economic, what benefit does the
Chinese government see in this? Clearly political. CSSTA
is the fastest route to erode Taiwan's sovereignty. The
wolves in the CCP are licking their chops and cannot
wait for the Taiwanese lambs to follow their blind
shepherds to their doom.”
Unprompted comments on the question:
Should the Legislature ratify the CSSTA?
118. ECFA: Business leaders are (still) bullish
The Economic Cooperation Framework (ECFA),
is generally perceived has having a positive
effect on Taiwan as a whole, and positive for our
members’ businesses.
The effect on the U.S.A. is more neutral with
many seeming unsure what, if any, impact it has
had or will have, on the U.S.A.
122. TIFA: Business leaders glad to see talks
The resumption of Trade and Investment
Framework Agreement (TIFA) talks in 2013, after
a more than five-year break, was a welcome
relief.
Taiwan is seen as receiving the greatest
advantage resulting from TIFA talks, followed by
the USA, and then to a lesser extent, our
members’ individual businesses.
126. The lack of a Bilateral Investment
Agreement (BIA) with the USA…
Is perceived as negatively impacting Taiwan the
most. The USA and to a lesser extent their
businesses, are believed to be disadvantaged by
the lack of a BIA.
130. *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.
131. The Top Benefits of Living in Taiwan (Ranked)
Benefits 2016 2015 2014 2013 2012 2011
Taiwan is an easy country to live in 1 3 3 3 4 3
Taiwanese people are extremely nice 2 1 1 1 1 2
My family feels safe in Taiwan 3 2 2 2 2 1
Taiwan provides quality Health/Medical/Dental
services
4 4 4 4 3 4
Alternative transportation options are usable and
provide options to driving my car (i.e., buses, bike
lanes, taxis, trains, sidewalks).
5 5 5 7 6 5
132. The Top Benefits of Living in Taiwan (Ranked)
Benefits 2016 2015 2014 2013 2012 2011
Mobile telephone coverage is excellent 6 8 8 9 9 8
Taiwan provides adequate shopping opportunities 7 7 6 6 7 7
Taiwan delivers reliable electricity 8 6 7 5 5 6
Taiwan provides quality parks and trails 9 12 10 12 12 11
Internet connectivity is excellent 10 11 17 14 8 9
The Postal service is excellent 11 9 9 8 10 10
133. Living in Taiwan…The not so great
things.
Given the topicality of food scandals it was not
surprising that food safety reached the number one
spot last year, of the worst things about living in
Taiwan. However, this year it drops to the third
position. As we have seen over past years:
– Taiwan is not an English-friendly environment
– Banking and other financial services are seen as sub-
par
– Water runoff from storms is not controlled and does
not minimize flooding
134. The Least Appreciated Aspects of Living in Taiwan (Ranked)
Concerns 2016 2015 2014 2013 2012 2011
Taiwan provides an 'English-friendly' environment
for me and my family
1 2 1 1 1
New in
2012
Banking and other financial services are excellent 2 3 3 4 6 4
Taiwan provides safe food 3 1
New in
2015
Water runoff from storms is controlled and
minimizes flooding
4 7 5 2 2 1
Taiwan provides quality drinking water. 5 4 2 3 3 3
135. The Least Appreciated Aspects of Living in Taiwan (Ranked)
Concerns 2016 2015 2014 2013 2012 2011
The library services provided to our community
are current and meet our needs
6 5 4 7 5 4
The standard of schooling is excellent 7 6 8 9 10 8
Taiwan government is approving development
that enhances the quality of life in our community
8 13 11 10 12 17
Taiwan provides quality youth activities 9 8 6 6 4 2
There are plentiful opportunities to enjoy the arts 10 11 12 14 12 15
The sewer system in Taiwan works reliably 11 10 7 5 8 7
Taiwan provides quality Police services 12 9 13 8 9 6
137. Who, When, and How.
The survey was addressed, via email, to the 406 voting
representatives – usually the CEO – among AmCham’s
Corporate Sustaining and Company membership.
The survey invitation was sent out on October 23,
2015, and the last response was accepted on
December 18, 2015.
The 30-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 208 responses,
representing a 51% response rate.
138. 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.9 , 2011) and used the
STATISTICAL YEARBOOK OF THE REPUBLIC OF CHINA
2014, Edited 2015, for the number of businesses.
Our sample draws from all of the major industrial
classifications in Taiwan.
139. Industry Classifications (Cont’d.)
Our sample is more skewed towards ‘Manufacturing’,
‘Professional Scientific and technical services’, and the
‘Finance and Insurances’ industries. And it is under-
weighted in the ‘Wholesale and Retail Trade’ industry –
by virtue of the fact there are 650,040 of these
businesses registered in Taiwan, representing over 49%
of all business numbers. With these covenants, we
believe the sample to be a fairly good representation of
business in Taiwan and an extremely good sample of
AmCham’s corporate membership.
141. Type of legal entity
Unsurprisingly, the vast majority of businesses in this
sample are wholly foreign-owned through a
combination of subsidiaries, branch offices and wholly-
owned full companies.
A few of those surveyed also have R&D centers and
some have regional HQ’s and even global HQ’s, located
in Taiwan. Consequently, the results in the next chart
show multiple responses and total more than 100%.
142. 0.5%
1.0%
1.0%
1.4%
2.9%
2.9%
6.3%
8.2%
12.5%
14.9%
20.7%
43.8%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%
NGO
Research & Development Center
Not for Profit
Representative Office
Global Headquarters
Regional Headquarters
Partnership
Joint Venture
Wholly locally-owned Company
Wholly foreign-owned Firm
Branch Office
Wholly foreign-owned Subsidiary Company
2016 Sample Profile
by Business Entity
143. 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’:
– 26% are relatively new to Taiwan with less than 15 years
here
– 26% have been established between 16-25 years
– 20% have been established for 26-35 years
– And those who are well-established (more than 35 years)
at 28%.
145. Number of Full Time Equivalent
Employees (FTEE)
Our sample covers a wide spectrum of employers -
from the very small to the very large.
– 20% employ 20 or less FTEE
– 30% employ between 21 and 75
– 19% between 75 and 250
– 16% between 250 and 750
– 15 % more than 750 (6% of whom employ more than
2000).
147. Business Focus
The business leaders surveyed are clearly focused on
Taiwan as the primary goal of most entities is to supply
the Taiwan market with goods or services. This makes
their comments and observations especially pertinent
to the Taiwan government.
148. Taiwan
63%
Greater China
5%
Export to the U.S.A.
1%
Markets other than Greater
China or USA
2%
Multiple markets including
Taiwan and Greater China
28%
Taiwan & SE Asia
1%
Provide/source goods or services for:
149. 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.
150. For more details, please contact…
American Chamber of Commerce in Taipei
Suite 706, Worldwide House,
129 MinSheng East Road, Section 3,
Taipei 10596, Taiwan
Tel: +886-2-2718-8226 Fax: +886-2-2718-8182
amcham@amcham.com.tw
OR:
Independent Marketing & Research Limited at:
gordon@independentmarketing.com.au
