Minister of Economic Affairs Yiin Chii-ming (尹啟銘) told a seminar yesterday that he expected NT$35 billion (US$1.06 billion) to be repatriated by overseas Taiwanese businesses this year, compared with NT$20.5 billion last year.
Yiin was speaking at the 2009 Taiwan Business Alliance Conference, which was attended by 700 Taiwanese expatriates, one-third of whom were from the US and China.
A survey in August revealed that 9.9 percent of 2,612 businesspeople polled expressed an interest in repatriating capital. Although not a staggering number, this figure is five times what it was in 2007, said the ministry’s Department of Investment Services deputy director-general, Yu Chi-cheng (余吉政).
For the first two months of this year, the ministry registered NT$4.9 billion in capital inflow, Yu said.
“To facilitate further capital repatriation, the government is implementing a five-year tax-free measure for investments from overseas made from July 7 last year through the end of this year. It has also lowered estate as well as gift taxes to 10 percent from the previous 50 percent, and increased tax-free estate and gift deductible amounts to NT$12 million and NT$2.2 million respectively,” Yu said.
Additionally, small and medium-sized enterprises (SMEs) will receive preferential financing as well as possible government capital assistance. Large corporations can benefit from promotional rates on industrial land use and can, along with SMEs, apply for subsidies for technological upgrades, he said.
Wang Jeng-tang (王振堂), chairman of Acer Inc (宏碁) and head of the Taipei Computer Association (台北市電腦公會), seemed unimpressed at the efforts of the government.
He said the only way Taiwanese companies and international corporations could be encouraged to invest in Taiwan was to build a state-of-the-art international business center, to provide a first class platform for business development, from manufacturing, branding, sourcing and distribution.
“Doing so will not only attract Taiwanese companies operating overseas to set up their headquarters in Taiwan, but also foreign corporations. Only then will Taiwan be a true global technology hub. Moreover, I suggest lowering international high-tech professional income tax to 12 percent, rather than the current 40 percent,” Wang said.
Wang also voiced frustration over the bureaucracy and found it hard to understand why an economic cooperation framework agreement (ECFA) with China was still in limbo.
Other than big corporations that have doubts about coming back to Taiwan, Andrew Yeh (葉春榮), head of a Taiwanese businessmen’s association in Dongguan, China, said government measures should also favor SMEs. After all, the Taiwanese business landscape continues to be SME-dominated, he said.
“The Chinese government charges Taiwanese businesses 25 percent income tax outright. When we come back, the Taiwanese government charges another 25 percent, so what is the point of coming back? Not to mention manual labor costs NT$8,000 in Hong Kong, so why should it cost NT$20,000 in Taiwan?” Yeh asked.