Investment

As introduced by the Yearbook of the Republic of China:

According to the World Investment Report 2003 published by the United Nations Conference on Trade and Development (UNCTAD), by the end of 2002 Taiwan had accumulated a total foreign investment of approximately US$33.5 billion. This was about 0.45 percent of all global foreign investment, ranking Taiwan 32nd in the world. The same report listed Taiwan's accumulated outward investment at approximately US$59.2 billion, accounting for 0.86 percent of the global total and ranking the island 17th in the world. Taiwan was also ranked 19th in the world by the report in terms of potential to attract foreign investment due to its sound infrastructure and high-quality workforce. In Asia, Taiwan ranked fifth on the list, after Singapore, Japan, Hong Kong, and South Korea.

Inward Investment

Taiwan's dynamic and flexible innovation, solid base for industrial development, internationally competitive high-tech products, high-quality human resources, large capital market, and global trade networks all help to create an excellent foundation for the development of a knowledge-based economy.

In the 2002-2003 Global Competitiveness Report by the Geneva-based World Economic Forum (WEF), Taiwan ranked third in terms of prospective economic growth among the 80 countries assessed, an advancement of four places from last year. In its 2002 business risk report, the Business Environment Risk Intelligence (BERI) of Switzerland ranked Taiwan fifth among the 50 countries included in its investment environment assessment.

In 2002, Taiwan recorded 1,142 approved inward foreign investments, totaling US$3.3 billion. Most of Taiwan's inward foreign investment in 2002 came from British territories in Central America, mainly the British Virgin Islands and the Cayman Islands (24.53 percent). This was followed by Japan (18.60 percent), the United States (18.35 percent), the Netherlands (9.37 percent), and Singapore (6.46 percent).

Taiwan has already opened its financial, insurance, transportation, telecommunication, and real estate sectors to foreign investment. At present, with the exception of a small number of ratio restrictions on foreign investment, such as in telecommunications services, foreign investors enjoy national treatment. Manufacturing is also completely open to foreign investment, except for a small number of items that affect national security, health, and the environment. The degree of market liberalization has reached 99 percent in the manufacturing sector and 95 percent in the service sector.

The top five sectors for foreign investment in 2002 were banking and insurance (26.87 percent), electronic and electrical appliances (20.26 percent), wholesale and retail marketing (11.95 percent), services (10.90 percent), and telecommunication (5.48 percent).

Outward Investment

Overseas investment (not including investment in China, which accounted for over 30 percent of outward investment) by Taiwan in 2002 totaled 925 cases (US$3.37 billion). Most of this investment went to the British Virgin Islands and Cayman Islands, the United States, other areas in the Americas, and Hong Kong. The top five sectors for this outward investment were banking and finance (52.89 percent), electronic and electrical appliances (15.88 percent), services (8.95 percent), international trade (5.11 percent), and transportation (3.54 percent).