Taiwanese city scape

How to Do Business in Taiwan

The Republic of China

 

When Portuguese explorers found Taiwan in the 16th century, they named it Ilha Formosa or “beautiful island.”

 

Taiwan is a small nation that packs a large punch. Despite being an island, Taiwan is the most populous country, and largest economy, not a member of the United Nations.

 

Taiwan also happens to be an international business delight. It ranked 11th out of 189 economies in the World Bank’s 2017 Ease of Doing Business survey

 

Why isn’t Taiwan a member? After the Chinese Civil War, the Chinese government fled to Taiwan and established a government, calling themselves the Republic of China. Since then, mainland China (People’s Republic of China) insists that Taiwan isn’t a independent country, and that it shouldn’t be a part of the UN.

 

Taiwan also happens to be an international business delight. It ranked 11th out of 189 economies in the World Bank’s 2017 Ease of Doing Business survey.

 

If you’re still having doubts… Taiwanese garbage trucks play Beethoven’s Für Elise… Any questions?

 
 

Major Cities

 
close up of taiwan map
 

Taipei City

Taipei is the world’s sixth-most technologically advanced city in 2017. Over 88% of Taiwanese people are online, and with average speeds that are faster than in the US.

 

It’s the capital of Taiwan, and the country’s political, educational, business and culture epicenter.

 

Taipei's MRT, or Mass Rapid Transit, is a national wonder. Cheap and effective, trips across Taipei often cost less than $1 USD.

 

If Taipei’s technological advantage isn’t enough to woo your business, the city’s transportation should seal the deal.

 

Taipei’s MRT, or Mass Rapid Transit, is a national wonder. Cheap and effective, trips across Taipei often cost less than $1 USD.

 

That means you don’t have to choose your hotel based on how close it is to your business meetings, which could save you quite a bit of money.

 

Kaohsiung City

In the 1960s, Taiwan experienced rapid industrialization and economic growth (known as the “Taiwan Miracle”), which led them to being named one of the four “Asian Tiger” economies.

 

Kaohsiung is the industrial center of Taiwan, and was the engine behind the country’s rapid development.

 

Kaohsiung is the only city in Taiwan with an international airport, and one of the world’s greatest seaports. Most suppliers are located within 20 miles of Kaohsiung Port and Kaohsiung International Airport.

 

This means Taiwanese supplies can be swiftly sent to your business, reducing transportation costs and delays.

 

Taichung City

When the county and city of Taichung merged in 2010, it became the second largest city in Taiwan.

 

In 2017, the Taiwanese government announced plans to invest $2.29 billion USD to transform Taichung into a city that specializes in exporting “smart machinery” such as robotics, big data and precision manufacturing.

 

Suppliers using smart manufacturing lower their expenses while increasing their productivity. Your small business benefits from purchasing Taiwanese exports because they’re cheaper and in greater supply.

 

Smart manufacturing, they hope, can be used to overtake Germany and Japan’s machinery industry.

 

Taiwan’s government estimates this investment could attract close to $3 billion in global supply orders.

 

Suppliers using smart manufacturing lower their expenses while increasing their productivity. Your small business benefits from purchasing Taiwanese exports because they’re cheaper and in greater supply.

 
 

Currency

 

Taiwan’s official currency is the New Taiwan dollar. Considering this is a weaker currency ($1 USD =$30 NTD), purchasing Taiwanese exports makes sense for your business.

 

Today, there are still large numbers of older Taiwanese people that can speak Japanese because Japan ruled over Taiwan in the past. Japanese also exists as an elite language among some Taiwanese business people who went to school in Japan.

 

These supplies will likely be much cheaper than what can be found domestically. This provides your business with the best price, while improving economic growth in Taiwan.

 

Plus, Taiwan’s excellent world-class transportation makes it even cheaper for Taiwanese supplies to be shipped to the US.

 
 

Language

 

Since 1945, Mandarin Chinese has been Taiwan’s official language. It’s almost identical to the mainland Mandarin Chinese that was brought to Taiwan by Chinese immigrants.

 

Besides Mandarin, Hakka Chinese and Hokkien (Taiwanese) are the other dominant languages of Taiwan. Mandarin is used in Taiwan’s government and law, but most still use Taiwanese as the language of everyday life.

 

Today, there are still large numbers of older Taiwanese people that can speak Japanese because Japan ruled over Taiwan in the past

 

Today, there are still large numbers of older Taiwanese people that can speak Japanese because Japan ruled over Taiwan in the past. Japanese also exists as an elite language among some Taiwanese business people who went to school in Japan.

 

English is a common foreign language in Taiwan. It’s a compulsory class in Taiwanese elementary schools, and is a subject in educated exams.

 

For your business trip to Taiwan, you should check whether or not you need a translator. Taiwanese business clients are more likely to speak English in major cities like Taipei, so the location of your business negotiations certainly matter.

 
 

Holidays

 

These are the public holidays that are recognized in Taiwan.

 

HolidayDateObservance
New Year's Day (Republic Day)January 2Nationwide
Lunar New Year's EveJanuary 27Nationwide
Lunar New YearJanuary 28-30Nationwide
Peace Memorial DayFebruary 27-28Nationwide
Women's Day and Children's DayApril 3-4Nationwide
Tomb Sweeping (Qingming) FestivalApril 4Nationwide
Dragon Boat (Duanwu) FestivalMay 29-30Nationwide
Mid-Autumn FestivalOctober 4Nationwide
National Day/Double Tenth DayOctober 9-10Nationwide

 

Note that some holidays are specific to Taiwanese regions or occupations. It’s important that you do some homework on your business clients and location to ensure you don’t schedule a meeting during a holiday.

 
 

Telecommunications

 

Taiwan has the second-highest smartphone penetration in the world, with 73% of Taiwanese people using a smartphone.

 

Businesses can use this knowledge to their advantage by advertising in Taiwan through mobile platforms to reach their market audience.

 

Prepaid SIM cards can be purchased at the airport, in shops or online in-advance. They’re inexpensive and easy to obtain. When applying for a SIM card, you must bring two pieces of ID.

 

SIM cards can be reserved online from Taiwan Mobile and Chungwa Telecom for five, seven or ten days. Getting a data plan is simple, but you should make sure you take the time to check all the available options.

 

Which Provider Should I Go With?

If you’re staying in Taiwan’s major cities, you should go for one of the cheaper providers like FarEast and Taiwan Mobile. This is because reception in these cities is high quality regardless of your provider.

 

When you travel outside of these cities, Taiwan’s mountainous regions can pose a problem for your cell service. This is where you should think about using Taiwanese provider Chungwa. It offers the best cell service in Taiwan, but does cost more than the others.

 

If you're staying in Taiwan's major cities, you should go for one of the cheaper providers like FarEast and Taiwan Mobile. This is because reception in these cities is high quality regardless of your provider.

 

Chungwa shops are less common than others, so you will want to reserve your SIM card online for pickup at the airport once you arrive in Taiwan.

 

If you need to contact a Taiwanese business client, Taiwan’s area code is +886. This number must be added before any number you’re calling in Taiwan. For example, the US and Canada use +1.

 
 

Finding a Supplier for your Business

 

Taiwan is actively trying to attract foreign investment, particularly those interested in Taiwanese exports.

 

When US businesses try to import goods from a foreign country, the US embassy in that country helps connect them to suppliers. This isn’t possible in Taiwan, as it has no US embassy.

 

Here are some ways that your business can find Taiwanese suppliers.

 

TaiwanTrade

A B2B e-marketplace that connects international importers with Taiwan suppliers and manufacturers.

 

Global Sources

A leading B2B trade facilitator that uses e-marketplaces, trade shows and magazines to connect Asian suppliers with the international importers.

 

HKTDC

Organizes more than 320 trade fairs and 590 networking events every year to help Asian exporters connect with international businesses.

 

Traveling to Taiwan

Entering Taiwan doesn’t require a visa if you stay for less than 90 days. All you need is a valid US passport and a return air ticket.

 

You need a visa if you plan on staying longer than 90 days, or if you plan on working or studying in Taiwan. A Taiwan visa costs $164 USD.

 

More information on the Taiwan visa application process can be found on the Taipei Economic and Cultural Office’s website.

 

Internet

Taiwan’s internet is fast and reliable, ranking fifth fastest in the Asia-Pacific region.

 

In 2011, more than 5,000 WiFi hotspots were created to provide foreign travelers with free internet access.

 

Accessing these networks requires you to register on iTaiwan’s online activation service website. The effective use of time is 30 days, and can be extended to 60 or 90 days.

 

Once you arrive in Taiwan, you must present your passport at a Travel Service Centre, located in Taiwan’s major airports and train stations. The service personnel will provide you with your login details, so you can enjoy free internet during your stay in Taiwan.

 

If you don’t end up registering with iTaiwan, wifi can still be found in many of Taiwan’s major cities. Internet cafes in Taiwan can charge from NT$15-30 an hour (roughly USD$0.50-$1.00).

 
 

Major Trade Shows and Events

 

WhatWhere
WhenWhat about
TWTC New Year Shopping FairTaipeiWinter Taiwan New Year shopping fair.
Wood TaiwanTaipeiWinterInternational woodworking machinery and supplies show.
Taipei Manufacturing Technology Show - MT DuoTaipeiFall Every Two YearsInternational machine tool and manufacturing technology trade show.
Fastener TaiwanKaohsiungWinter Every Two YearsInternational fastener show.
Semicon TaiwanTaipeiFallInternational exposition and conference dedicated to semiconductor equipment.
Taichung International Tea and Coffee ShowTaichungSummerInternational tea, coffee, bakery and food fantasy fair.

 

Business in Taiwan

 

Business Culture

Taiwan has become a highly-developed market economy, yet its business culture is still based on trust, honor and tradition.

 

Small and medium-sized businesses (SMBs) account for most of the market, with many of them being family-owned.

 

Personal relationships are a crucial part of doing business in Taiwan. Your business should avoid rushing into business negotiations, and instead spend the necessary time to learn your Taiwanese supplier so you can establish a strong relationship with them.

 

One way to help speed this process along is by giving gifts: a common occurrence in Taiwanese business culture.

 
 

Business Communication

 

Face

If you want to communicate in Taiwan, you need to know about “face” and guanxi.

 

Face is a mixture of dignity, reputation and honor, and is a cultural mainstay in many Asian and Arabic cultures.

 

You can 'save face' by avoiding humiliation or embarrassment. You can also 'give face' by treating others with respect. To 'lose face' is to do something that is shameful, and can have a negative effect on your business’ face as well.

 

You can “save face” by avoiding humiliation or embarrassment. You can also “give face” by treating others with respect. To “lose face” is to do something that is shameful, and can have a negative effect on your business’ face as well.

 

Here are a few examples.

 

Taiwanese business clients will avoid pointing out others’ mistakes to allow them to keep their face, even if it the mistakes could have a negative impact on their business.

 

When exchanging business cards in Asian cultures like Japan or Taiwan, business clients will often receive the card with both hands and study it intently.

 

This is different from most Americans and other Westerners, who would likely stuff it in their pocket.

 

Handling the business card with both hands and reading it shows respect for the gesture, the individual and the negotiations.

 

Guanxi

This translates to “relationships”, and is at the heart of every business meeting in Taiwan.

 
people networking in a business setting
 

Guanxi stems from Confucianism, which emphasizes the importance of keeping social harmony through hierarchy. Although it can be compared to the Western idea of “networking,” there are differences between the two.

 

Relationships in a Western context may be described as two individuals who share common interests, while Asian cultures see it as a close friendship.

 

Here’s an example.

 

Let’s say your US business is trying to finalize a deal with a French supplier. You know they like golf, so you invite them to play a few games.

 

Once you’re done, the French client agrees to your proposal and the deal is done. Both of you shake hands and call it a day.

 

This relationship may work for these two Western cultures.

 

If the French business client was Taiwanese however, they’d probably wonder why you aren’t inviting them to play golf again next week.

 

One of the biggest problems for Westerners looking to do business in Asia is understanding the different relationship dynamic.

 
 

Hierarchy

 

With Taiwan’s traditional business culture, it’s no surprise that business hierarchy is similar.

 

Their management is typically paternal and hierarchical, with an emphasis on valuing seniority and rank. Compared to Japan and South Korea, Taiwan’s business structure is much more informal, with less focus on protocol and procedure.

 

It’s unusual for Taiwanese employees to question the decisions of their manager. Before decisions are made, however, Taiwanese managers make sure to build consensus to ensure that a majority agrees on the decision.

 

Your business can respect Taiwan’s hierarchical system by paying the utmost respect to Taiwanese officials with seniority, position or age.

 
 

Business Etiquette

 

  • Seniority is important. Address your presentation to the most senior member, and wait until they sit before you do. Not doing so may cause them to lose face, which will have a devastating impact on your business negotiations.
  • Dress conservatively. Although Taiwan is beginning to open up on dress code, with half of the population being under the age of 30, you should go for the safe option.
  • No touching. Don’t touch another person’s shoulders or their head. Especially children, who are held in very high regard in Taiwan.
  • Be subtle. Taiwanese business culture disapproves of boisterous behavior. Try to be calm and casual, matching your tone and volume to the other Taiwanese business members in the room to avoid appearing loud.
  • Presentation protocol. This isn’t just about directing your presentation to the most senior person in the room. You should also have all written documentation, including business cards, translated in Mandarin as well as in English. For easier readability, dividing your presentation topics into segments can help Taiwanese business clients understand you better.
  • Invitation only. Don’t arrive at a Taiwanese business client’s house without being invited. If you are though, good conversation topics are art, family and sightseeing.
  • Giving gifts. This is common practice in Taiwanese business culture. Receive and give gifts with both hands, otherwise the presents may seem undervalued. Note that Taiwanese business partners usually won’t open gifts in front of you, for fear of losing face if they don’t like it. Gifts like food or products with your business logo on them would be graciously accepted by most Taiwanese business clients.

 

 

Business Negotiations

 

You should meet face-to-face with Taiwanese clients. Guanxi is a key part of Taiwan business culture, and getting to know your Taiwanese partner in-person will help this.

 

Taiwanese people are firm about punctuality. Business appointments in Taiwan can be made by email or phone, and are easy to schedule at all organization levels.

 

Head nods are considered appropriate greetings in Taiwan, although handshakes are becoming more common with westernization.

 

A great way to connect with your Taiwanese business audience is to adopt a temporary Chinese name. Similar to how many Asians take on Western names, finding a Chinese name can help your Taiwanese clients speak with you.

 

Some older Taiwanese business clients may greet you with nǐ chī le ma. This is a traditional greeting, which translates to “have you eaten?”

 

It’s equivalent to “how do you do?” in English, and you should probably avoid using this antiquated phrase. But if you are greeted with nǐ chī le ma, you should respond by nodding or shaking your head depending on if you recently ate.

 

A great way to connect with your Taiwanese business audience is to adopt a temporary Chinese name. Similar to how many Asians take on Western names, finding a Chinese name can help your Taiwanese clients speak with you.

 
 

Import and Export Regulations

 

Importing Taiwanese products requires you to pay value-added tax (VAT) and duties. After this, you will receive a commodity code which classifies what your goods are and what you paid.

 

The value-added tax is 20% for most goods shipped out of Asia, but some exceptions have a cheaper rate. Children’s goods are tax-free, for example, and if you’re using the exports in your business, some of the VAT could be refunded. It’s important that you do your research so you know what benefits you can be entitled to.

 

Duties can vary from 0% to 17% depending on the Taiwanese export.

 

Each Taiwanese export must be declared on a Single Administrative Document (SAD) during the customs process.

 
 

Business Advisories in Taiwan

 

Before traveling to Taiwan, you should be aware of the political environment.

 

A Brief History…

In 1946, civil war broke out in China between the Nationalists and the Communists, led by Mao Tse-tung.

 

The Nationalists fled to Taiwan and put a government in place, cutting ties with the Communist mainland.

 
Taiwan-history
 

The US proposed that the Nationalist government in Taiwan accept dual-representation, meaning Taiwan and China can both represent China in the United Nations.

 

But the Nationalist government refused, claiming that they were the sole leaders of China.

 

This, along with Communist China’s insistence that any friend of Taiwan is no friend of China, led to Taiwan losing their seat in 1971.

 

Taiwan’s official name is the Republic of China (ROC), while mainland China is known as the People’s Republic of China (PRC).

 

Considering how they feel about one another, try not to mix up the names.
What does this mean for your small business?

 

Well, since the US doesn’t recognize Taiwan as an independent country, there is no US embassy in Taiwan.

 

However, the Taipei Economic and Cultural Representative Office plays a similar role in Taiwan for US businesses, and you should reach out to them if you have questions.

 

You should also remember that although China and Taiwan are beginning to speak again, they still aren’t the best of friends.

 

Try to avoid anything related to mainland China, such as simplified Chinese characters on your business cards or in your presentation.

 
 

Payments in Taiwan

 

There are three common business payment methods in Taiwan.

 

Cash in Advance

This tends to be used when it’s a new business relationship with smaller transactions, and when the buyer has to pay before receiving the goods.

 

Documentary Collections

Businesses that have an established relationship tend to use this payment method, as it provides a certain level of protection.

 

Open Account

If a Taiwanese supplier really trusts that the buyer will pay once the goods are shipped, they might opt for an open account method of payment.

 

Which One Should You Use?

The best payment option for your small business, however, is Veem.

 

It’s a digital payments platform built with small businesses in mind.

 
oldway_8
 

With its specialized multi-rail system, Veem calculates the optimal route for B2B money transfers, ensuring that they reach your Taiwanese business partner quickly and securely.

 

Working with Veem ensures that your global business payments are as easy as sending an email.

 

The Key to Successful Business in Taiwan

If you want to find success in Taiwan, and in other Asian countries, adapting to the culture is crucial.

 

Understanding the concept of face will help you maintain social harmony with your Taiwanese clients. Being aware of seniority, and of the impact that shaming can have on Taiwanese society, can help your business seal a supply deal in Taiwan.

 

The relationships you make with your Taiwanese business clients have to be real, too.

 

In Japan, there’s a custom called kuki wo yumu, which translates to “reading the air.” A lot of communication in Japan, and in Taiwan as well, relies on nonverbal cues.

 

Taiwanese business clients will likely know how you perceive their relationship based solely on your body language.

 

The solution?

Actually make some friends!

 

If a Taiwanese client asks you out to a party after your business meeting, say yes.

 

If they offer you some beer, graciously accept it with both hands, and drink it. Don’t be scared to “let loose.”

 

Taiwanese business clients want to know who you are, the real you, so the best way to adapt to their culture is to allow them to get to know you.

 
 

Resources

 

Here are some resources that you may find useful for your trip to Taiwan:

Taipei Economic and Cultural Representative

Taiwanese Culture Differences

US Department of Commerce on Taiwan

CNN Travel on Taiwan

Central Intelligence Agency on Taiwan

 

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