Taiwan is an important destination for Foreign Direct Investment (FDI). The island enjoys strong growth sustained by the dynamism of the entire region, a population with high purchasing power and economy with high technological focus. However, in the recent years, its attractiveness has been steadily declining. Between 2011 and 2013, the country experienced negative FDI flux of around $35b, especially to China. FDI flows remain among the lowest in the region. Speculative activities, rising property prices, bureaucratic constraints and a rigid judicial framework are all impediments to investment. FDI flux have been negatively affected by the global economic crisis and later by the euro zone crisis and the difficulties of the U.S. economy. However the Economic Cooperation Framework Agreement (ECFA) signed with mainland China in 2010 has improved Taiwan's investment climate.
|Taiwan||East Asia & Pacific||United States||Germany|
|Index of Transaction Transparency*||9.0||5.0||7.0||5.0|
|Index of Manager’s Responsibility**||5.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||6.0||9.0||5.0|
|Index of Investor Protection****||6.3||5.4||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||1,957||3,207||3,688|
|FDI Stock (million USD)||55,100||59,760||63,448|
|Performance Index*, Ranking on 181 Economies||151||-||-|
|Number of Greenfield Investments***||106||79||67|
|FDI Inwards (in % of GFCF****)||-2.0||3.4||3.9|
|FDI Stock (in % of GDP)||12.2||12.4||13.0|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
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Last Updates: December 2014