Guidance

Overseas business risk: Taiwan

Updated 14 January 2025

Politics

Taiwan is a stable, liberal democracy with a free press, independent judiciary, and a vibrant civil society. Taiwan is routinely ranked in global freedom indexes as amongst the top democracies with strong democratic rights in Asia. The last set of Presidential and Legislative Elections were held in January 2024 and elected representatives serve a fixed four-year term.  

There are three main parties in Taiwan, the governing Democratic Progressive Party (DPP), the main opposition Chinese Nationalist Party / KMT (KMT), and an emergent third party called the Taiwan People’s Party (TPP). 

Taiwan has 22 local administrative divisions, including 6 special municipalities and the remainder as cities and counties. Local Elections for mayors, county magistrates and district level representatives are held every four years. The last elections took place in November 2022. Referendums are also common in Taiwan, with issues such as energy policy, food safety and the voting age voted upon in recent years. Taiwan has a population of 23.4 million and the voting age is 20 or older. 

The UK’s longstanding policy on Taiwan has not changed: we have no diplomatic relations with Taiwan but a strong, unofficial relationship, based on deep and growing ties in a wide range of areas, and underpinned by shared democratic values. Only 12 countries, mainly in the South Pacific and Latin America, formally recognise Taiwan (as the “Republic of China”). The PRC does not object to other countries’ commercial, cultural and other non-political links with Taiwan, but protests against anything it views as formal official contact.

Elections

In January 2024, serving Vice President LAI Ching-te (DPP) won the presidential election alongside his running mate, HSIAO Bi-khim, for a historic third DPP presidential term with 40.05% of the popular vote (5.58 million votes). KMT candidate HOU Yu-ih had won 33.49% while TPP contender KO Wen-je came third with 26.46% of the vote. The turnout was 71.86% amongst an electorate of 19.5 million. 

This is the first time since Taiwan’s democratisation in the 1990s that a political party has retained the presidency for a third term. Presidents are elected in a first-past-the-post system. Compared to 2020, the governing DPP’s vote share has reduced from 57.13% (8.1 million) of the popular vote. 

The DPP lost its legislative majority in the concurrent legislative elections securing 51 seats compared to the KMT’s 52 and the TPP’s 8. A total of 57 seats are required in the 113-member Legislative Yuan to reach an overall majority. 2 Independents are aligned with the KMT. The incumbent legislative Speaker is HAN Kuo-yu from the KMT. Legislators in Taiwan have the power to propose and amend legislation, as well as to freeze and cut budget proposals by the Executive Yuan. 

Taiwan’s legislative elections produce 79 constituency/indigenous seats by first-past-the-post and 34 party list seats by proportional representation. Taiwan has a dual executive system – the presidency and the Executive Yuan (executive branch of government, headed by the Premier, who appoints cabinet ministers). 

Compared to previous instances when the legislature was controlled by the opposition (2000 to 2008), opposition parties have been particularly proactive at proposing new laws and amendments to existing laws in the Legislative Yuan. In May 2024, the opposition parties were able to pass a package of reforms to the powers of the Legislative Yuan, which sparked street protests (known as the “Blue Bird movement”). However, the main reforms were overturned by the Constitutional Court in October 2024.

Domestic policies

President Lai pledged a new “National Project of Hope” during his election campaign to tackle a range of domestic issues in Taiwan, including the cost of living, low wages, inequality and unequal development, healthcare and social warfare, crime, corruption and scams, and public safety. The Lai Administration has been developing further a focus on various socioeconomic issues begun by former President TSAI Ing-wen.  

Lai has set out a vision for innovative, inclusive growth, with Taiwan continuing to be a vital link in global supply chains. He plans to build on existing technology strategies with the “Five Trusted Industries”, first mentioned at his inauguration in May 2024 (semiconductors, AI, military, security and surveillance, and next-generation communications). 

In June 2024, President Lai has announced three new presidential committees on health, climate change, and whole-of-society defence and resilience. These committees intend to engage across government, the private sector and civil society to develop national strategies and consensus on the DPP Administration’s priorities.

Cross-Strait relations

Managing the cross-Strait relationship with China remains a high political priority for the current Administration.  

The People’s Republic of China (PRC) has claimed sovereignty over Taiwan since the end of the Chinese civil war in 1949, when the defeated Chinese Nationalist Party (Kuomintang or KMT) government fled to the island. The PRC maintains its threat of forceful unification if Taiwan ever declares independence. 

Although cross Strait links have grown, with direct flights and shipping links across the Taiwan Strait, trade and investment in both directions, and large numbers of Taiwanese business people studying and working in the PRC, Taiwan is working to diversify away from its reliance on China and insulate its supply chains. Numbers of visitors from China have reduced and there is little to no official level dialogue between the two sides.  

Following the 2016 election of the DPP, the PRC government broke off official contact between the two sides of the Strait, making DPP acceptance of China’s “One China” framework a precondition for resumption of contact. Since his election in 2024, Lai’s Administration has committed to continue former President Tsai’s policies, remaining open to dialogue with China, but also calling out increasing levels of grey zone military activity around Taiwan and pushing back on Chinese misuse of UN resolution 2758 to block Taiwan’s international participation. 

Chinese pressure on Taiwan has continued to increase. PLA air incursions into Taiwan’s Air Defence Identification Zone (ADIZ) - an area where air traffic controllers ask incoming aircraft to self-identify - have now become a near-daily occurrence. There have also been increased Chinese Coast Guard activities around Taiwan’s outlying islands of Kinmen, Matsu and Penghu. A total of 1714 aircraft entered Taiwan’s ADIZ in 2023 compared to 961 in 2021. Chinese military activities around Taiwan can increase around the time of political events. In August 2022, following Nancy Pelosi’s visit to Taiwan, China conducted live fire exercises around Taiwan. Following President Tsai’s transit through the USA and meeting with Speaker McCarthy in April 2023, the PLA simulated surrounding and attacking Taiwan. China has undertaken two large scale exercises in the Taiwan Strait in 2024, Operation Joint Sword A & B. In addition, China has enacted anti-secession laws which place an emphasis on penalising those China regards as “secessionists”. A successful conviction under these laws can carry heavy sentences, including the death penalty. 

Information on political risk, including political demonstrations, is available in FCDO Travel Advice.

Economy

Taiwan is the world’s 21st largest economy, with an advanced high-tech industry and a key role in global supply chains. 

Taiwan’s economy experienced a period of rapid industrialisation in the decades after the end of the Chinese civil war with GDP growth rates approaching 8% on average between 1958 and 2008. During this period, building on foundations established during the Japanese colonial era (1895 to 1945), Taiwan’s economy diversified away from the previously dominant agricultural sector towards greater industrial development – it geared up to meet external demand and the economy became increasingly export-orientated. 

Taiwan became known as one of Asia’s “Four Tiger” economies in the 1980s as it focused on hi-tech industries. This transition was driven by the establishment of world-class industrial clusters, beginning with Hsinchu Science Park (today one of the leading global semi-conductor industry hubs), and policies aimed at liberalising the economy. 

Taiwan’s 2002 accession to the WTO increased exports and improved foreign firms’ market access to Taiwan. This development stemmed from Taiwan’s success as one of Asia’s most dynamic and innovative economies, which created a favourable business environment for both internal and overseas investment. According to the 2024 IMD World Competitiveness ranking, Taiwan is ranked 8th in economic competitiveness, receiving high scores in administration and business efficiency. 

Taiwan today is an advanced, export-orientated economy, with exports equivalent to 65% of GDP in 2022. GDP growth was 1.28% in 2023. The official forecast for growth in 2024 is 3.9%. 

Taiwanese firms are world leaders in several high-tech manufacturing sectors, such as semiconductors, laptops, servers, LCD panels, smartphone components, and machine tools. Taiwanese firms are also renowned for providing contract manufacturing services, with the most famous examples being Taiwan Semiconductor Manufacturing Company (TSMC) and Foxconn Hon Hai. TSMC is the most valuable semiconductor manufacturer in the world, with 61.7% of the global foundry market share in the first quarter of 2024. Foxconn, Apple’s main contract manufacturer for iPhones, is China’s largest private sector employer with over one million employees. Taiwan’s ASUS and Acer are ranked as the top 5th and 6th for global PC shipments, respectively.  

Having historically enjoyed substantial trade surpluses, Taiwan’s foreign exchange reserves are the fourth largest in the world. Taiwan is a major regional investor, particularly in China and Southeast Asia. Taiwan was China’s fifth largest source of FDI in Asia in 2023 with US$3 billion of investment according to Taiwan’s Department of Investment Review. An estimated 80,000 Taiwanese companies are located in China, accounting for approximately 70% of China’s electronics manufacturing. According to the results of China’s 2020 census, around 160,000 Taiwanese residents live in China. In 2023, Taiwan’s investment in China dropped to a 20-year-low, due to recent shifts in of global supply chains, the slowdown of Chinese economy, and adjustments on the types of Taiwanese businesses’ investment in China.   

Taiwan’s economy is facing some significant long-term challenges, including a rapidly aging population, a shortage of skilled labour, stagnating wages, an overdependence on key export sectors, periodic droughts, and challenges around energy security. To address these and use Taiwan’s strength in tech to lever its overall economic energy, President Lai has introduced strategies aimed at promoting sectors key for its future economic development. The ‘Five Trusted Sectors’ are listed as semiconductors, AI, military, security and surveillance, and next generation communications. 

The world’s largest offshore wind market outside of China and Europe, Taiwan aims to reach 5.6 GW of offshore wind-powered generating capacity by 2025 and is planning for 20.6GW capacity by 2035. The sector is forecast to create foreign and domestic investment exceeding NTD$2.6 trillion (£65 billion) and bring more than 57,000 new jobs. Taiwan is now the UK’s largest offshore wind market in Asia Pacific region with around 35 UK offshore wind companies setting up offices in Taiwan, many of these offices serving as the regional Asia-Pacific hub.

UK-Taiwan trade and investment

British businesses are highly visible in the Taiwanese domestic market while trade links continue to grow. In the four quarters to the end of Q2 2024, Taiwan was the UK’s 33rd largest trading partner globally. In this period, the UK-Taiwan bilateral trade in goods and services decreased slightly by 3.5% (£300 million) year-on-year to £8.3 billion. UK’s exports to Taiwan increased 13.9% (£576 million) during this period with growth concentrated in the financial services sector. 

There is a substantial market for infrastructure consultancy and products, financial services, high-value manufacturing, chemicals and green technology and services. Taiwan also has a sophisticated market for consumer goods, particularly for international designer labels. 

Taiwan is performing strongly as a top 20 export market for UK food & drink, reaching £404.9 million in 2023, growing 6.9% year-on-year. Taiwan was the fourth largest market for Scotch whisky exports in 2023 by value, with a strong demand for single malt brands. Taiwan is also a top six market for Scottish salmon.

Investment in Taiwan

Taiwan ranks 15th in the World Bank’s Ease of Doing Business Rankings (2020), scoring well above the regional average for East Asia and the Pacific. 

In 2022, the stock of FDI from the UK in Taiwan was £3.1 billion, 21.6% higher than in 2021. There is a large British business presence in Taiwan, covering a wide range of sectors from financial services to pharmaceuticals, from ICT to offshore wind. British companies operating in Taiwan include ARM, Diageo, GSK, AstraZeneca, Standard Chartered Bank, HSBC, Macquarie Green Investment Group, Oxford Instruments and Bechtel.

Business and human rights

Taiwan has constitutional protections for civil rights. The constitution protects the right to unionise. 

The Labour Standards Law (LSL) provides for minimum employment standards, including minimum working age and standards for working conditions and health and safety. 

Taiwanese law provides for gender equality with regard to salaries, promotions, and assignments, although men still dominate senior positions in many industries. For more information on labour regulations, contact the British Office’s DBT team. 

On 17 May 2019, Taiwan’s parliament passed a law to recognise same-sex marriage. The rights of married same-sex couples are the same as those of heterosexual couples, except that same-sex couples can only adopt a child who is biologically related to one partner and that marriage to a same-sex partner from overseas is only possible if that country also recognises same-sex marriage. 

On 20 September 2024, Taiwan’s Constitutional Court ruled the death penalty to be conditionally constitutional, significantly restricting its application. Under the ruling, the death penalty may only be applied to individuals who commit “the most serious crimes,” although this remains undefined. The court mandated that death sentences must be unanimously agreed upon by all judges on the panel. Furthermore, individuals suffering from mental health disorders at the time of their crimes are exempt from capital punishment. This ruling aligns with previous court interpretations while introducing clearer criteria to safeguard against wrongful convictions, uphold the principle of proportionality in sentencing, and strengthen the protection of human dignity and the right to life.

Bribery and corruption

Bribery is illegal. Under UK law, it is an offence for British nationals or someone who is ordinarily resident in the UK, or a body incorporated in the UK, to bribe anywhere in the world. In addition, a commercial organisation carrying out business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. It does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere. 

Taiwan scored 68 out of 100 (0 is highly corrupted and 100 represents very clean) in the Corruption Perceptions Index 2022. While there have been high-profile cases of corruption involving major contracts in Taiwan, the large majority of business transactions take place without corruption. The Lai Administration is increasing efforts to tackle an increase in fraudulent activity and scams targeting Taiwanese people. Read the information provided on our Bribery and corruption page.

Security

Terrorism threat

For the most up-to-date information on terrorism see the terrorism section of the FCDO Travel advice for Taiwan.

Protective Security Advice

Taiwan is generally a safe place to live and do business. Small-scale petty crime affecting foreign nationals is not commonplace, but exists. Read the information provided on our safety and security page on the FCDO Travel Advice. 

The Centre for the Protection of National Infrastructure (CPNI) also provides protective security advice to businesses.

Cyber security

The Taiwanese authorities have reported increases in cyber attacks, particularly DDOS attacks, directed against public infrastructure and websites around the time of key political or geostrategic events happening in Taiwan. There has also been a rise in reported data breaches in recent years, but with limited impact on foreign entities. The Taiwanese authorities are focusing on strengthening cyber resilience to mitigate against the impact of these challenges. 

British companies, whatever their size, may be subject to cyber attacks. Thefts of money, customer data or IP damage company profits and reputation. As a deterrent we advise companies to get their cyber security right. This is a board-level issue that all businesses need to deal with, and the 10 Steps to Cyber Security guidance provides Government advice on how to protect your business. Smaller firms starting out with implementing cyber security measures may find the related Cyber Security: what small businesses need to know guidance more useful, as well as visiting the Government’s advisory website Cyber Streetwise. 

Businesses wishing to implement the most important technical controls and demonstrate that they take cyber security seriously can apply to be assessed under the Cyber Essentials Scheme, leading to the Cyber Essentials or Cyber Essentials PLUS badge. Companies may also wish to consider joining the Cyber Information Sharing Partnership, which shares real-time cyber threat information on cyber threats.

Organised crime

Taiwan remained in Tier 1 of the 2022 Trafficking in Persons report, meaning that Taiwanese authorities fully meet the minimum standards for the elimination of trafficking.

Commercial disputes

While the majority of foreign-owned businesses in Taiwan operate successfully, disagreements and disputes can occur, particularly involving small companies which may be perceived as vulnerable to pressure.

What we can do

We can offer basic advice and information based on our experience and sign-post UK firms to English speaking legal companies.  

We have prepared a limited list of English-speaking lawyers which is available via the British Office Taipei website. This list includes lawyers who specialise in commercial law and trade disputes. 

We advise that you read the legal disclaimer on this list before using this service.

What we cannot do

Business disputes are primarily a matter for arbitration or the courts. We cannot get involved (including offering advice) in private disputes over property, employment, commercial or other matters. 

Your first point of contact should be a reputable lawyer with appropriate experience and knowledge of law and business practice in Taiwan. We are not qualified to offer you legal advice. We cannot pay your legal fees, undertake an investigation or guarantee your safety in Taiwan, nor can we get you special treatment because you are a British citizen. We also do not provide dedicated translation services or other notarial services. 

If you require a UK document to be legalised for use in Taiwan, this cannot be done at the British Office Taipei. You should use the service provided by the Legalisation Office in London. Legalised UK documents must also be authenticated by the Taipei Representative Office (TRO) before they are valid for use in Taiwan.

Intellectual Property

The intellectual property framework in Taiwan is well developed and the local authorities have adopted a number of measures in recent years to strengthen IP protection. According to the International Institute of Management Development’s World Competitiveness Ranking 2022, Taiwan was ranked 19 out of 63 economies for intellectual property protection. 

The establishment of a dedicated IP Court in 2008 was widely welcomed by the business community. The website of the Taiwanese Intellectual Property Office (TIPO) contains useful information in English. Recent amendments to Taiwan’s IP system can be found in the TIPO 2023 Annual Report. 

According to the TIPO 2023 Annual Report, the average waiting time to acquire a new invention patent in Taiwan was 14.4 months, 2.8 months for a utility model patent, 5.5 months for a design patent, and 7.5 months for trademarks. 

The UK and Taiwan have regular constructive dialogues on intellectual property issues. On 1 December 2017 the UK Intellectual Property Office signed a Memorandum of Understanding to make it easier for UK and Taiwanese businesses in biotechnology and pharmaceutical fields to protect their intellectual property. In another positive move, Scotch Whisky was registered as a trademark in both English and Mandarin in Taiwan in 2016. This was a major breakthrough for the industry in one of its most important global markets. 

Further information is provided on the Intellectual Property page.

Department for Business and Trade contact

For information regarding conducting business in Taiwan, contact the Department for Business and Trade team.

The British Chamber of Commerce in Taipei

The British Chamber of Commerce in Taipei has 150 members at the time of writing and continues to grow as UK business interests and investment in Taiwan increase.

Useful links

• British Office Taipei 
• Taiwan Market guide 
• FCDO travel advice 
• UK Science and Innovation Network snapshot: Taiwan - GOV.UK 
• World Competitiveness Centre - Global Competitiveness Ranking 
• World Bank - ‘Ease of Doing Business’ 
• anti-bribery policy 
• find a lawyer in Taiwan