The Executive Yuan yesterday approved a multibillion-dollar project to develop the biomedical industry through a tax incentive scheme to increase innovation and export medical services to the world.
The project, which is part of President Tsai Ing-wen’s (蔡英文) campaign pledge to develop the “five plus two” innovative industries, aims to relax investment and recruitment regulations to lure and retain foreign capital and talent, and to encourage local businesses to acquire international companies and develop foreign markets, Executive Yuan spokesman Hsu Kuo-yung (徐國勇) said.
The government is to invest NT$10.94 billion (US$346.32 million) in the next year to develop 10 large-scale healthcare firms, 20 new drugs and 80 new medical devices to be marketed internationally by 2025 in a bid to boost the annual value of the biomedical industry to NT$1 trillion, Ministry of Science and Technology Department of Life Sciences Director-General Tsai Shaw-jenq (蔡少正) said.
The ministry is to build a “biomedical corridor” connecting the nation’s science parks to maximize research capabilities, he said.
“The nation’s medical service is the best in Asia and the third best in the world, and we want to export the service by completing the infrastructure of the healthcare industry,” Tsai Shaw-jenq said.
The government is looking to tap into the global senior healthcare market, especially in Southeast Asia, while developing specialized medical therapies for diseases that people of Chinese ethnicity are prone to develop.
The program will also exempt biomedical start-ups from taxation in the early stages after an initial public offering, while restrictions that prohibit academics from assuming positions in private companies will be lifted to encourage university spin-off companies, Minister of Science and Technology Yang Hung-duen (楊弘敦) said.
The Executive Yuan also passed an amendment to the Act for the Development of Biotech and New Pharmaceuticals Industry (生技新藥產業發展條例) to provide tax incentives to companies as part of the development package.
The new incentive scheme allows a 35 to 50 percent tax credit on a company’s research and development expenses and personnel training cost. Shareholders are also to receive a 20 percent tax credit on the investment amount, or the purchase price of the stock, Vice Minister of Economic Affairs Shen Jong-chin (沈榮津) said.
“This is special legislation and it is the only legislation that offers a tax incentive scheme,” Shen said, adding that the act, even without the amendment, already saw investment in the biotechnology sector increase to NT$48.4 billion last year.
The amendment will also lift restrictions on the development and production of high-risk medical devices and new drugs to prompt manufacturers to develop such products, as current legislation lags behind technological advancement, Shen said.
The move will benefit about 50 medical instrument and 13 regenerative medicine firms in the fields of precision medicine, gene therapy and cell therapy, he added.
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