Taiwan is finally luring companies back from China after more than 15 years of trying
- Higher costs and dodging trade tariffs from the US-China trade war are key reasons for Taiwanese firms moving back home
- Since January, 14 firms have applied to invest (US$1.29 billion) which would create 4,400 jobs, with 14 projects pending approval
Taiwan is slowly gaining after 15 years of effort to attract local companies to invest at home rather than in mainland China, which has so long been the favoured investment location.
In 2008, then president Chen Shui-bian offered amnesty to firms that had broken laws against investing in the mainland, before successor Ma Ying-jeou leased land and established tech incubators to incentivise the return of capital. Now, a list of government incentives under President Tsai Ing-wen that took effect January 1 is combining with a growing list of business headaches in mainland China to lure that capital back to be invested in Taiwan.
Since January, Taiwanese investors have applied with the Taipei government to invest NT$39.9 billion (US$1.29 billion), the island’s economic affairs ministry said on March 15. The investment by 14 firms would create 4,400 jobs, the ministry’s Investment Commission said, while another 14 projects are pending approval.
Preferential financing, permission to hire low-cost workers from Southeast Asia and the prospect of letting mainland Chinese employees work in Taiwan have all been offered by the commission to returning investors. Some projects also qualify for rent breaks on government-owned land, which is normally hard to find for large-scale investments.
It lacks comparative homebound investment figures for previous years, but sees the latest batch as “not too bad,” said Wang Tzu-yi, an associate with the commission’s comprehensive planning unit.