Connect Taiwan, China

CONNECT Taiwan A smart guide to shipping

This is your quick guide to help you connect with customers and businesses across Taiwan. It’s here to help you understand the local culture, shipping requirements, regulations and key commercial opportunities to expand your business.

united problem solversTM Contents CONNECT Taiwan Visit UPS.com

Taiwan Overview 03 > Find out the most important facts about the markets to help you assess the potential for your business.

Economic Potential 04 > Learn about what sells where and the most popular exports and imports that may be relevant to your sector.

Business Culture 08 > Pointers on how to build successful relationships with local businesses and consumers.

Tips and Advice 09 > Useful information and directory to help you ship to and from Taiwan.

Connecting with UPS 11 > A quick overview of UPS capabilities and experience and how we can help connect your business with customers across Taiwan.

Contents Taiwan Overview Economic Potential Business Culture Tips and Advice Connecting with UPS Taiwan Overview CONNECT Taiwan Visit UPS.com

Open your new trade Taiwan has a dynamic capitalist economy, largely driven by industrial manufacturing and exports of electronics, machinery and petrochemicals. It is one of the world's top producers of computer technology. It is also one of the Asia's biggest traders and its route to Taiwan. major trading partners include China, Hong Kong, the U.S., Japan and the countries in the European Union.

National facts and figures

Taiwan Capital Taipei Population 23,464,787 (2016) Land Area 36,197 sq. km

Major Urban Centers Taipei 2.666 million; & Population Kaohsiung 2.779 million; Taichung 2.778 million; Tainan 1.886 million [there are 16 officially recognized indigenous groups] Economy Agriculture: 1.8%, Industrial: 36.1%, Services: 62.1% Language Mandarin (official), Taiwanese Hokkien, Hakka dialects

One of the largest trading and import Solid manufacturing hub Openness to foreign investments Taiwan is ranked 11th in 'ease of doing markets With a long history of strong manufacturing, Taiwan actively pursues Foreign Direct Investments business' Taiwan is the 19th largest trading market and Taiwan is reinventing itself, focusing on (FDI) from both foreign companies and Taiwan According to the World Bank, Taiwan scored 18th largest import market in the world. The total intellectual property and innovations that are less firms operating overseas. particularly well when it comes to providing import value in 2015 was at US$ 249 billion and capital-intensive. A number of policies and incentives have been electricity, dealing with construction permits has been growing at nearly 10% every year. 7% of the world’s integrated circuits are introduced to support sectors in the areas of: and enforcing contracts. Taiwan has strong R&D manufactured in Taiwan, and Taiwanese have transportation, pesticide manufacturing, real estate capabilities that contribute to innovation in for years excelled in mobile phone, computer development, brokerage, leasing, and trading. business. hardware and electronics engineering.

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Unlocking your The Taiwan economy is highly dependent on international trade. Taiwan works to boost its economic growth and diversification through deepening ties with The Association of Southeast Asian Nations (ASEAN). The government is also working to strengthen potential. economic and trade cooperation at the bilateral level, including institutional, professional and academic interaction.

Taiwan has bilateral Free Trade Agreements Innovation transformation with: El Salvador, Guatemala, Honduras, In addition to the efforts to boost international trade and Nicaragua, New Zealand, Singapore and investment, the government is making a heavy commitment to transform Taiwan into an innovation-driven market. This is Panama. achieved through: According to The Economist, a revival in global trade is the • Promoting Industrial Innovation; boosting industrial research main reason for Taiwan’s growth. and development; nurturing innovation and entrepreneurship and fostering small and medium-sized enterprises • Exports rose 15% in the first quarter of 2017, the fastest rate in six years • Sustainable Energy and Resource Management; starting energy transitions and the revolution of the electricity • Taiwan’s stock market has also been up by 40% in dollar industry; strengthening water resource management and terms, about the same as those in South Korea flood prevention infrastructure • Taiwan shipped US$ 280.5 billion worth of products Currency New Taiwan Dollar • Creating an excellent business environment; improving the around the globe in 2016. This figure represents about investment environment; adjusting regulations and systems 1.7% of the overall global exports GDP (US$) 524 billion (2016) By introducing a ‘five plus two’ industrial transformation Foreign Investment and low investment risk 47,800 (2016). Taiwan has a slow plan, the government is hoping to move Taiwan away from GDP Per population growth and an expanding traditional contract manufacturing model and move towards Taiwan is a preferred destination for foreign direct Capita (US$) economy. high-value-added and solutions-oriented business models. investment (FDI) as its economy benefits from regional The plan includes amending existing regulations that stand in economic dynamism, a population with high purchasing CPI inflation Rate 1.4% (2016) the way of innovation in the following areas: power and the prominence of high-tech. Total Imports – the Internet of Things (also referred to as Asia Silicon Valley) A relatively stable economic performance has attracted 231 billion (2016) continuous investments and tapping into the Taiwanese (US$) – Biomedical assets. Total Exports – Green Energy 280 billion (2016) According to the Investment Commission of Taiwan, the (US$) – Smart Machinery market has benefited from a 130% increase in FDI flows in China (26.4% of total Taiwanese exports), – Defense 2016, reaching US$ 11 billion. The investment from China Hong Kong (13.7% of total Taiwanese Top trading – New Agriculture has also increased comparatively from prior years. exports), U.S. (12% of total Taiwanese Partners exports), Japan (7% of total Taiwanese – Circular economy exports)

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Key Business Electronic, Information and Communication Technologies are the biggest players in the manufacturing sector, which employs 26% of the national workforce. The government has approved funding for the development of 10 high-tech industries: Sectors in Taiwan. communications, information, consumer electronics, semiconductors, precision machinery and automation, aerospace, advanced materials, speciality chemicals and pharmaceuticals, medical and healthcare equipment, pollution control and treatment.

The High-Tech Center of Excellence Key centers in Taiwan ICT Industry Taiwan has excelled in the semiconductor, optoelectronics, Taiwan is highly specialized in manufacturing and R&D information technology, communications and electronics Hsinchu Science Park for the ICT sector. Taiwan raised its economic growth Taiwan's first science park, fields. At present, the economy is shifting towards committed to creating a outlook to a three-year high as exports improve, nanotechnology, biotechnology, optoelectronics development base for Taiwan's top driven by strong global demand for smartphones and the tourism service industry. high-tech industries. and other high-tech electronic gadgets. Taiwan is determined to capitalize on the next Advanced Technology Central Taiwan Science Park generation of mobile communication technology. Hosting domestic and overseas Taiwan has consistently been a stronghold of global firms, it promotes sustainable It has ambitious plans for 5G, a new mobile semiconductor manufacturing. According to the Industrial development and preservation of communication technology with faster speeds, Technology Research Institute's Industrial Economics and local landscapes and culture. greater capacity and lower latency. Telecom industry Knowledge Center, Taiwan’s semiconductor production watchers expect the official 5G standard to be grew over 7.2% to US$ 77 billion in 2016 (23% of the announced in 2018, with full commercialization likely total global market and about 13% of Taiwan’s GDP). Tainan City, to follow in 2019 or 2020. Promoting 6 emerging industries It accounted for 28% of exports in 2016. including biotechnology, green Semiconductor firms are continuing to expand energy, fashion, tourism and Medical Devices and upgrade advanced processing technologies medical, quality agriculture, and culture and creativity. Taiwan holds a competitive advantage in sectors and operations to maintain its competitiveness. These TainanScience Park of Taiwan servicing manufacturing of medical devices. These huge projects boost the demand for manufacturing is located in Xinshi, Shanhua and include electronics, ICT, precision machinery and equipment and materials. Anding Districts of Tainan City. fasteners. Therefore, Taiwan is able to develop and Taiwan ranks as the leading location for foundry services, manufacture high quality medical devices with costs IC packaging and testing services in the world. This is the far lower than that of the U.S. and Europe. Southern Taiwan driving force behind equipment and materials investment. Science Park, The export of Taiwan’s medical devices has been Currently, Taiwan has great potential to develop advanced Leading in the development growing steadily since 2005. The main export markets packaging equipment for back-end processing. Taiwan of semiconductor packaging, for Taiwan’s medical devices are the U.S. (27%), Japan electronic components, is home to electronic equipment manufacturers like Acer, (15%) and EU (>14%). optoelectronics, information ASUSTek and HTC, as well as home to the largest EMS software, biotech and medical (electronic manufacturing services) company in the world, equipment. Foxconn/Hon Hai.

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Economy powered Taiwan consumers follow global trends closely and possess high purchasing power. Product quality and after-sales service are key consideration when making purchases. According to the Trading Economics, consumer confidence in Taiwan has been at its by consumer demands. height since mid 2016, mainly driven by more optimism because of higher disposable income.

Taiwan's consumer spending was at an all time high in the first quarter of 2017, reaching TWD 2.23 million. The large middle class demands a variety of consumer goods and services and drives the consumer economy that fuels economic growth. Taiwanese consumers used to resist from buying foreign products. Today this behaviour is changing dramatically. Taiwanese are now more open than ever to the purchase of western brands and products from other regions in Asia.

Purchasing trends – Novelty seeking. – High quality standards and service expectations. – High regard for product information, packaging and advertising. – Brand is important as it conveys a message of social status and insurance of quality. – Luxury purchases deserve a premium price for all the extras related to quality standards and service expectations. – Imported goods carry a positive ‘exotic’ appeal simply because they are not locally made. – As one of the world’s healthiest societies, the Taiwanese are increasingly conscious of their health. Drugstores are among the fastest-growing and popular retail channels. – Preference for products with a low environmental impact: reducing energy consumption and waste, using environmentally-conscious or “green” design. 06

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Sophisticated Taiwan has the world’s third highest rate of eCommerce penetration (62%) after the U.S. and the UK. eCommerce in Taiwan has grown strongly, recording double-digit growth in sales between 2015 and 2017, with an internet penetration rate approaching consumer market. 80%. Taiwan also holds among the highest mobile penetration and smartphone usage rates in the region.

Household Consumer Goods (HCG) eCommerce Taiwan is a viable market for high-quality and differentiated household consumer Taiwan's homegrown eCommerce platforms are mature and transparent which are goods. With the growing demand for better living standards, more Taiwanese are beneficial for both buyers and sellers. The comprehensive logistics infrastructure willing to increase their spending on household consumer goods. The market scale ensures delivery of items being shipped domestically within a few business days. of household consumer goods in Taiwan has remained at around US$ 1.6 billion since The Taiwan eCommerce market has averaged 10-15% annual growth since 2013 and 2015. The import market is expected to increase by 2020, especially for high-end the value of sales reached US$ 34 billion in 2015. One of the major drivers of Taiwan's products. eCommerce growth is the nation's youth (under the age of 30). Retailers are increasingly focused on improving their online offerings, including raising security and delivery standards. Business to consumer (B2C) online shopping is expanding robustly, and reached US$ 21.3 billion in 2016, 15.1% more than 2015. B2C business continues to account for the largest proportion of direct marketing sales.

15.14% up 5% 51%

The eCommerce market has averaged 10-15% annual growth over the past five Average consumer spending in Taiwan has Business to consumer (B2C) online shopping years, and the value of sales reached reached an all time high. reached US$ 21.3 billion in 2016. US$ 34 billion in 2015 .

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Understanding local The general rule of local business culture is that Taiwanese co-workers and superiors should be knowledgeable on Western etiquette and their way of conducting business. Taiwanese are highly motivated people. They value hard work, patience, humility, business culture is the friendliness and respect for others. foundation of your success.

Meetings Business Culture Customer Service Holidays • Telephone and E-mails are the most • Small talk is expected to help know each • Taiwanese people place a great deal Taiwan is an earthquake zone. Business days convenient methods to schedule other better. of emphasis on relationships, many can be affected by natural disasters such as appointments. • Prices are always negotiable. Refusal to of which have been cultivated over typhoon and earthquake which typically • Always be punctual as tardiness is improve prices or incentivize may be a number of years and/or through a happen during the period from May to considered offensive to your Taiwanese seen as a loss of face (always include personal network. Businesses are September. advised to make multiple trips to clients counterparts. some adjustment margin in your original • New Year’s Day/Founding of the Republic of to build that relationship. • Be formal during the first meeting. quotation). China (1st January) Pantsuits are acceptable for women and • Hierarchy is important in the Taiwanese • It is advisable to find a local partner • New Year’s Day Holiday (2nd January) suits and ties are acceptable for gentlemen. workplace. to serve as an agent to gain an initial • Chinese New Year‘s Eve * (27th January) foothold in Taiwan, as well as to help • Offering guests with some specialities from • Official titles are highly valued. It is • Chinese New Year Holiday * (28th January - 1st build a better understanding of local your home country is always appreciated. important to address your counterpart by February) consumers behaviour. They could be shared and consumed their title. • Lantern Festival * (11th February) • The vast majority of Taiwan firms are during the meeting. • Knowing and pronouncing your • Peace Memorial Day (28th February) small and medium-sized enterprises • Meeting schedules are not highly co-workers’ names correctly is key. • Ching Ming Festival * (Tomb Sweeping Day) (SMEs). They are actively trading and structured in Taiwan. Remember that the family name (3rd April) familiar with the local regulations and precedes the given name in Taiwan. • People are expected to exchange name expectations which makes them capable • Children’s Day (4th April) cards during the first meeting. It is • At the workplace, it is important not to be in representing you to local customers. • Labor Day (1st May) preferred to have name cards written in too loud or lose control of your emotions. • Mother’s Day (Second Sunday of May) both traditional Chinese and English and • Workplace attire should be professional. • Dragon Boat Festival * (29th - 30th May) avoid using name cards or brochures using • Business relations can be professional • Father’s Day (8th August) Simplified Chinese. Most Taiwanese also and personal. Personal relationships use a Western first name for convenience • Mid-Autumn Day * (4th October) are the key to doing business in Taiwan. purposes. • National Day/ Double Ninth Day Taiwanese people like to do business with (9th – 10th October) • A Chinese name is preferred. It should be people they know. * Subject to change based on the lunar calendar a real Chinese name and not a phonetic • Do not discuss money openly. transcription. You may seek the help from your local contact in Taiwan if you do not have one.

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Useful things to remember If you are thinking of shipping to or from Taiwan, help is at hand. Wherever you are, visit UPS.com to get detailed help on everything you need to know about sending export and import shipments. You’ll find guidance on determining exporting costs; how to prepare for an export shipment; when shipping to and how to book and track shipments and how to process payments and deal with returns. Below are some important rules, tools and support from Taiwan. resources to get you started. Any for-profit Taiwanese company or firm wishing to import or export out of Taiwan must register with the Bureau of Foreign Trade (BOFT). Most documents presented for use in customs clearance processing must be prepared in Chinese to avoid delays.

Ship to Taiwan Ship from Taiwan Online Tools

Documentation Documentation A range of tools is available from UPS that can help you with your shipping needs. Visit www.ups.com for these tools. Non-document shipments which require import licenses, or shipments More than 700 products need an export permit (valid for a period of thirty with unclear invoice descriptions will require a Power of Attorney from the days). Accurate cost and delivery time consignee to authorize the clearance. For controlled and remaining permissible items, the permit must be Calculate Time and Cost: Find delivery dates, time and shipping Shipments of textiles and garments require the country of origin marked on obtained directly from the Board of Foreign Trade. costs for UPS services. each item, state the material, brand and the place of origin. For the commodities in the “List of Commodities Subject to Export Days of Operation: Find UPS-observed holidays in Taiwan. Computers, communications equipment and televisions require an Import Restriction”, exports are subject to two regulations: Better knowledge of customs requirement license from the Bureau of Standards Metrology and Inspection, Ministry of - Commodities cannot be exported unless the Bureau of Foreign Trade Import/Export Country Regulations: Click here for country-specific Economic Affairs. grants export permits to them under some special circumstances. facts and requirements that may impact your international Contact lenses and hearing aids require import licenses. Hearing aids - Commodities can only be exported subject to certain conditions. shipment. manufactured in China are prohibited. Exporters shall comply with the requirements prescribed in the list and can export these commodities only after the BOFT export permits. Effective and efficient shipping process Unique Customs Information More information can be found here. UPS Import Control®. Take control of your inbound international Commodities must be imported in accordance with the Foreign Trade Act, shipments and minimize delays and errors. the Enforcement Rules of the Foreign Trade Act, the Regulations Governing Unique Customs Information UPS Paperless Invoice: Electronic commercial invoices speed data to Import of Commodities, the Regulations Governing Export and Import of It is recommended that goods be inspected prior to export (it could be customs. High-Tech Commodities, the Consolidated List of Commodities Subject to done by local agent). Import Restriction and the List of Commodities Entrusted to Customs for UPS TradeAbility®: A suite of Web-based tools to help manage and Import Examination. Export Commodities must be exported in accordance with the Foreign track international trade. Trade Act, the Enforcement Rules of the Foreign Trade Act, the Regulations Low value multiple shipments (the same day/the same consignee/ the Governing Export of Commodities, the Regulations Governing Export and Flex™ Global View : Supply-chain visibility for enterprises with a global same shipper) will be consolidated into one formal entry. Also, shipments Import of High-Tech Commodities. The List of Commodities Subject to reach. with no value declared but that are of value may be sent for evaluation. Export Restriction and the List of Commodities Entrusted to Customs for Quantum View™ Manage: Get up-to-date information about Export Examination can be found here. Restrictions shipments you send, or those you’re expecting, from one Web-based tool that is easily customizable. Goods that originate in China have Prohibited / Controlled / Approved Restrictions status – these can be checked via the Bureau of Foreign Trade The Taiwan system categorizes exports into controlled and permissible items (more details in the Board of Foreign Trade (BOFT)

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Useful links and reference information.

Useful Links Sources & References

Bureau of Standards, Metrology and Inspection FocusEconomics U.S. Department of State Chinese International Economic Cooperation Association Laws & Regulations Database of CEIC The Republic of China Directorate General of Customs Trading Economics The World Bank Group Invest in Taiwan Nations Encyclopedia Angloinfo Ministry of Economic Affairs (MOEA) Contact Taiwan National Development Council Central Intelligence Agency BBC Taiwan External Trade Development Council (TAITRA) Meet Taiwan Market Intelligence & Consulting Taiwan Trade World’s Top Exports Institute Department of National Treasury, Ministry of Finance GOV.UK Chung-Hua Institution for Economic Research TransWorld Trade Net Forbes MEDICA Magazine World Factbook - Taiwan Brookings Importers & Exporters Association of Taipei Santander Information Service Industry Association (CISA) Taiwan Business TOPICS The Environmental Protection Administration (EPA)

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Partnering for Whatever your needs are across Taiwan and the globe, import or export, business or consumer – UPS has the expertise in global logistics to help you succeed. With access to our comprehensive service portfolio you can capitalize on international market maximum potential. potential. The UPS network will connect you with your customers in Taiwan, Asia region and beyond, giving you the reassurance of our experience and the latest technology on your side to help you succeed.

Authorized Economic Operator Status UPS became an Authorized Economic Operator in Taiwan in 2012 and has since maintained that status. The authorization reinforces the fact that UPS customers enjoy preferential levels of efficiency through customs procedures. This means high quality service guarantee to all UPS customers who connect with businesses in Taiwan. Speed and convenience across the whole island UPS in Taiwan offers a self-drop-off service at over 3,000 FamilyMart convenience stores, including small towns and rural areas. Your suppliers in Taiwan can take in and fulfil last minute orders from you by dropping your packages any time of the day at any of the stores usually located within 5 minutes’ walk away. Up-to-Date Information UPS has launched the fifth generation Delivery Information Acquisition Device (DIAD V) which is used to electronically capture delivery information including signatures and scan barcodes in Taiwan. The information is gathered for analysis to improve safety, service and performance throughout UPS’s service network. Along with improvements to network utilization and schedule planning, the DIAD V maximizes service efficiency to ensure that UPS is well equipped to keep tabs on the pickup and delivery of packages, no matter the volume. This ensures that you are kept up to date with the latest status of your packages to and from Taiwan.

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Delivery commitment from Taiwan

To Canada 1 day

To U.S.A. 1 day

To Russia 4 days

To the UK 2 days

To the Netherlands 2 days To Belgium 2 days To Germany 2 days To France 2 days To South Korea 1 day To Italy 2 days To Spain 2 days

To China 1 day To Japan 1 day To the Rest of Europe 2 days To Hong Kong 1 day To Africa Region 3 days

To Middle East Region 2 days To Vietnam To Thailand 1 day 1 day To the Rest of Asia Pacific2 days To the Philippines 1 day

Region To Malaysia 1 day To Singapore 1 day Asia Pacific To Indonesia 1 day Europe To Latin America Region 2 days

North America To Australia 2 days Middle East

Africa

Latin America

*Based on the earliest delivery times by UPS Worldwide Express service and may vary by origin and destination postal codes. Time-in-transit can be subject to change without prior notice. Please visit ups.com for guarantee details, service availability and commitments before shipping. Certain commodities and high-value shipments may require additional transit time for customs clearance. The above information is updated as of July 2017. 12

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Delivery commitment to Taiwan

From Canada 3 days

From U.S.A. 3 days

From Russia 2 days

From the UK 2 days

From Belgium 2 days From Germany 2 days From France 2 days From South Korea 1 day From Italy 2 days From Spain 2 days

From China 1 day From Japan 1 day From the Rest of Europe 2 days From Hong Kong 1 day From Africa Region 2 days

From Middle East Region 3 days From Vietnam 1 day From Thailand 1 day From the Rest of Asia Pacific2 days From the Philippines 1 day

Region From Malaysia 2 days From Singapore 1 day Asia Pacific From Indonesia 2 days Europe From Latin America Region 3 days

North America From Australia 2 days Middle East

Africa

Latin America

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