The nation’s business environment reform has shown significant signs of improvement, the Council for Economic Planning and Development (CEPD, 經建會) said in a statement yesterday, in response to the annual Index of Economic Freedom report released on Wednesday.
The report, which was compiled by The Heritage Foundation and the Wall Street Journal, showed that Taiwan edged up eight notches to become the world’s 27th economically freest among 183 countries this year, from 35th last year. Taiwan ranked seventh in the Asia-Pacific region of 41 countries, the report showed.
The council attributed the achievement to amendments to the Company Act (公司法), which lifted the minimum capital requirement in establishing a corporation and eased business formation.
“This year, the council will continue to improve the nation’s international competitiveness rankings in IMD and WEF [two other competitiveness reports] to modernize the legalization of domestic business environment,” the CEPD said in the statement.
Since May 2008, the CEPD has conducted a review of the advantages and disadvantages of the nation’s business environment to find ways to improve the domestic trade regime, the statement said.
Taiwan was given an overall score of 70.4, up 0.9 points from last year — “primarily because of a notable improvement in business freedom,” the report said.
The CEPD said that Taiwan increased as much as 3 points from last year in the category of business freedom and advanced 50 places to rank 29th in the world on the time required to start a business.
According to the Index of Economic Freedom report, it takes an average of 23 days to start a business in Taiwan, compared to the world average of 35 days, with fairly easy and straightforward bankruptcy proceedings, while getting a business license in Taiwan required less than the world average of 218 days.
“The Taiwanese economy benefits from a well-developed legal and commercial infrastructure and a long tradition of entrepreneurship,” the report said.
However, the report showed that Taiwan lost points in the “freedom of trade” section because of non-tariff barriers imposed by the government.
Among these barriers listed by the report: Import and export bans and restrictions, access barriers to the services market, import taxes and fees, burdensome standards and certification requirements, restrictive pharmaceutical regulations, cumbersome sanitary rules, state trade in rice and weak enforcement of intellectual property rights.
There was also criticism of Taiwan’s labor laws.
“Taiwan’s labor regulations are rigid,” the report said. “The non-salary cost of employing a worker is low, but dismissing an employee is relatively costly and burdensome. Regulations on work hours are not flexible.”
Also on the negative side, the report said that the level of state involvement in the economy remained “considerable” and “corruption and the rigid labor market” were holding the country back.
For the 16th straight year, Hong Kong was given the world’s No. 1 ranking and three other economies in the Asia-Pacific region also made the top 10 — Singapore, Australia and New Zealand.
China was ranked 140th in the world for economic freedom — one place above Haiti.
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