HSBC Treasury Management Profiles 2018 -

Current section, Introduction


As one of Asia’s Four Tiger economies (alongside South Korea, Singapore and Hong Kong), Taiwan has over the past four decades transformed itself from a largely agrarian-based economy to one dominated by industry and services and powered by exports. Exports, of technology goods in particular, account for approximately 60 per cent of GDP. As a territory reliant on trade, recent economic growth has been impacted on by the global economic slowdown – exports fell 10.6 per cent in 2015 and 1.7 per cent in 2016 year-on-year. A revival in the global economy in 2017, however, has seen exports rebound; in September 2017, Taiwan’s exports rose 28.1 per cent on a year earlier. This strong demand for exports saw the growth forecast for 2017 raised to 2.15 per cent, up from 1.92 per cent in February. Growth of 2.27 per cent is forecast for 2018. Surging exports also drove economic growth of 3.1 per cent in Q3. In order to lessen the territory’s economic dependence on exports, the government is introducing initiatives to spur private investment. The World Bank currently ranks Taiwan 11th out of 190 in its Doing Business 2017 ranking; the territory is also a preferred destination for foreign direct investment. In September 2017, Premier William Lai announced plans to eliminate investment obstacles and to push forward its ‘Forward-looking Infrastructure Development Plan’ which includes investment in a wide range of industries such as rail transportation, urban and rural development, digital development and green energy.

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Legal and regulatory

  • Foreign exchange and domestic currency (TWD) accounts can be held by residents both domestically and abroad. TWD cheque, demand and time-deposit accounts are subject to a refundable 10 per cent withholding tax on the interest and interest-related income
  • Non-resident bank accounts are permitted in both foreign and domestic currency. TWD current, demand and time-deposit accounts are subject to a non-refundable 20 per cent withholding tax on the interest and interest-related income
  • All transactions between residents and non-residents must be reported to the central bank on a monthly basis. A declaration statement must be made to the CBC for all foreign exchange transactions over TWD500,000. Corporate transactions greater than USD1 million must be reported by banks immediately

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  • A company headquartered in Taiwan is taxed on its worldwide income
  • A company headquartered outside of Taiwan (such as a branch of a foreign company) is taxed on Taiwanese-sourced income only
  • The flat rate of corporation tax is 17 per cent

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Payment instruments and systems

  • Cash is an important payment medium in Taiwan, particularly for low-value commercial and retail transactions. Although its use is in decline due to a preference for electronic payments for high-value corporate and low-value retail payments, the cheque remains a common method of payment in Taiwan. Payment card use is widespread, while electronic wallet schemes are popular. In June 2017, the government launched, a mobile payment platform to enable the payment of utility bills and parking fees
  • Taiwan operates a number of national payment systems: CIFS, an RTGS system; FISC, which operates several subsystems, including the IRS, the Credit Card and Shared ATM System, and the Internet and Mobile Banking systems; the ACH, for electronic payments; and the USD Settlement System

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Cash management

  • Domestic notional pooling and cash concentration is permitted. Prior approval is required from the Ministry of Finance before banks can offer pooling services. Cross-border structures are not permitted
  • A range of collection services are available, including cheque collection services provided by courier companies

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Electronic banking

  • Electronic banking is commonplace in Taiwan. There is no bank-independent electronic banking standard
  • Internet and mobile banking services are provided by all of the territory’s banks for both corporate and retail purposes
  • The Mobile Banking Payment System, which links telecoms companies with financial institutions, enables users to initiate fund transfers via mobile phone

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  • Ministry of Finance
  • World Bank
  • Trading Economics
  • Directorate General of Budget, Accounting and Statistics

The materials contained on this page were assembled in June 2017 (unless otherwise dated).



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