AmCham Taipei 2016 Business Climate Survey - Full results Jan 19

AmCham Taipei

2016

Business Climate Survey

Full Results

2

Chairman’s Message

In its sixth annual Business Climate Survey, completed in late 2015, AmCham Taipei invited the 406 voting representatives from our member companies (usually the top executive) to answer a series of questions about the business environment in an online questionnaire. In conducting the survey and analyzingthe data, the Chamber was grateful for the professional guidance of Gordon Stewart of Independent Marketing & Research.

I would also like to express my thanks to the 208 member-company executives who took the time to complete the survey. The high 51% response rate, which produced a solid quantity of data, shows that our members keenly recognize the value of this exercise in framing the Chamber’s policies and our recommendations to the Taiwan and U.S. governments.

Message from 2016 AmCham Chairman –

Dan Silver

In the surveys conducted over the past six years, we have intentionally asked our business leaders the same, or nearly the same, set of questions. As a result, we have been able to track the degree of progress – or the lack thereof – across key issues over that period. Overall, the results of the six surveys have been quite consistent. Our companies regard Taiwan as a good place to do business because of such attributes as its industrious and well-educated workforce and its safe and hospitable living environment. A high proportion of respondents reported that their companies are profitable and are continuing to increase investment and expand employment.


Dan Silver

In this year’s survey, however, a sharp drop occurred – to 47% from 60% last year – in the number of respondents expressing optimism about the five-year business outlook for Taiwan. Many factors may have contributed to that decline, including the sluggish state of the world and Taiwan economies, and uncertainties over whether Taiwan will be able to avoid marginalization by gaining entry into emerging regional trade groupings such as the Trans-Pacific Partnership (TPP). An important section of the survey each year asks the business executives to identify factors having the most impact on their business operations. This year the number-one item mentioned was “inadequate or outdated laws,” followed by “inconsistent regulatory interpretations.”


Dan Silver

Among the other categories cited within the top 10 were “insufficient notice before changes to regulations or laws are introduced,” “inconsistent application of the Rule of Law,” “differences between local and internationally accepted standards,” and “lack of transparency.” Fortunately, with an eye to preparing Taiwan’s prospective bid for TPP membership – and more fundamentally to enhancing Taiwan’s competitiveness in the global marketplace – the current government has already been seeking to bring Taiwan’s regulatory procedures more fully in line with standard international practices. We hope that the long transition period before the new administration takes office does not slow the process, and that the new government will carry the reform effort forward with vigor.


Dan Silver

In particular, revising the Administrative Procedure Act to ensure ample opportunity for stakeholder response to proposed new regulations would go a long way in remedying existing shortcomings in the regulatory regime. The survey results also show an interest in seeing more diversification in Taiwan’s external economic relations. A substantial 87% of respondents support Taiwan’s pursuit of membership in the TPP, for example, and two-thirds consider that the resumption of Trade and Investment Framework Agreement (TIFA) talks with the U.S. in 2013 has been beneficial to Taiwan. Finally, since the business focus for the great majority of our member companies is the local market, one of their chief concerns is the state of domestic demand.


Dan Silver

We encourage the government to undertake programs and policies designed to boost consumption, including broadening employment opportunities and investing in the development of domestic infrastructure and human capital. AmCham Taipei offers the findings of the 2016 Business Climate Survey as reference for the new administration that will soon take office in Taiwan, and assures the new government of the Chamber’s commitment and support for initiatives to bolster Taiwan’s economic competitiveness.

Dan Silver 2016 AmCham Taipei Chairman


Dan Silver

9

Executive Summary

74%72%

81%

54%

81%

66%

59%

43%

70%

65%69%

52%56%

67%

61%

50%

60%

54%

43%

47%

Profitability Forecast for Revenue & ProfitGrowth

Increased Investment Forecast 5-Year Business Outlook

Key Financial Indicators

2010 2011 2012 2013 2014 2015 2016

72%

66% 65%

69%67%

40%

45%

50%

55%

60%

65%

70%

75%

2011 2012 2013 2014 2015

CURRENT PROFITABILITY

59%

69%

63%61%

54%

40%

45%

50%

55%

60%

65%

70%

75%

2012 2013 2014 2015 2016

FORECAST FOR REVENUE & PROFIT GROWTH

43%

52%

48%50%

43%40%

45%

50%

55%

60%

65%

70%

75%

2012 2013 2014 2015 2016

FORECAST INVESTMENT

70%

56%54%

60%

47%

40%

45%

50%

55%

60%

65%

70%

75%

2012 2013 2014 2015 2016

5 YEAR BUSINESS OUTLOOK

Key Indicators: Latest 5-years trend

Key Takeaways: Profitability

Current profitability remains in the “Relatively” to the “Very Profitable” zone for more than two-thirds of our companies. This has been the case for six consecutive years.

Key Takeaways: 2016 Forecast

Forecasts for 2016 Revenue & Profitability growth, and levels of new Investment, are trending lower.

Key Takeaways: 5-Year Business Outlook a cause for concern

A concerning and statistically significant decline (down from 60% to 47%), in the number of leaders expressing optimism in their outlook for their next five year business forecast. The trend, when lagged by 1 year, tracks closely with the trend in y-o-y Gross Domestic Product (GDP) growth.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

2011 2012 2013 2014 2015

5 y

r. O

utl

oo

k (l

agge

d)

GD

P G

row

th

Taiwan’s y-o-y GDP growth

GDP 5-yr Outlook

Key Takeaways: Employment

Half of all our member companies increased their employment numbers either “slightly” or “significantly”, during 2015. Whilst less than 2014’s increase, it’s still a very encouraging reflection of our members’ businesses.

The great news is they plan to hire still more in 2016.

Key Takeaways: The Issue that has regressed the most

Since we started measuring ‘Political turmoil’, it is the one issue to have regressed the most in the past few years. The intensity by which it is felt is evident by the negative scores it achieves - which surpass the closest, ‘other issues’, by 20-40%.

150

200

250

300

2011-2013 2012-2014 2013-2015

Political turmoil in Taiwan5th Factor4th Factor3rd Factor2nd Factor

Key Takeaways: Issues with Impact

The top 5 issues adversely impacting our business leaders are:

1. Inadequate/Out-dated laws

2. Inconsistent regulatory interpretation

3. Drop in domestic demand

4. Governmental bureaucracy

5. Insufficient notice before changes to regulations or laws are introduced.

Key Takeaways:Mergers & Acquisitions (M&A)

On average, 1 in 8 of our member companies are involved in M&A each year. The reasons for seeking M&A and for failing to complete the deals are also consistent.

Additionally, 1 in 5 companies every year, “consider” M&A.

Key Takeaways:Support for Trade Liberalization

There is very strong support for Taiwan’s entry into the TPP.

Along with support for:

ECFA; TIFA; China-Taiwan Cross-Strait Services Trade Agreement (CSSTA); and the establishment of a USA-Taiwan Bilateral Investment Agreement (BIA).

Key Takeaways:Human Resources

As in past years, the survey-takers praised the caliber of the Taiwan workforce in most respects, but found deficiencies in the degree of creativity, initiative, and innovativeness. Certain industry sectors are also having difficulty recruiting sufficient talent.

Key Takeaways:Quality of Living

AmCham Taipei business leaders consider Taiwan to be a safe and friendly place to live, with a good healthcare system. The main negative is the degree of “English-friendliness” of the environment.

Detailed Findings

2015: Another Profitable Year for Business

The majority (67%), of our business leaders experienced either a “relatively” or “very profitable” year in 2015. A very similar result to prior years.

0%3%

24%

53%

21%

1%3%

24%

58%

14%

1%3%

31%

56%

10%

0% 1%

34%

54%

11%

0%2%

28%

56%

14%

0%3%

29%

52%

15%

Very Large Loss Relatively Large Loss Break-even or smallProfit/Loss

Relatively Profitable Very Profitable

How would you characterize your Taiwan business' financial performance in 2015?

2010 2011 2012 2013 2014 2105

2016: Business slight decline?

Compared to 2015, the majority of our business leaders are forecasting a slight decline for 2016 in their revenues and profits.

6%8%

54%

17%

10%

23%

46%

11%

6%

19%

53%

13%

6%

16%

53%

11%9%

18%

50%

11%11%

22%

39%

15%

Modest decline in both Revenues &Profits

Remain the same Modest growth in both Revenues& Profits

Substantial growth in bothRevenues & Profits

What is your Taiwan business’ Revenue & Profits forecast for 2016 compared to 2015? (Top responses only)

2011 2012 2013 2014 2015 2016

Short-term investment : Levelling-off

After a period of recovery and stabilization, forecasted levels of investment are likely to remain unchanged or to decrease slightly in 2016.

1%

3%5%

36%38%

16%

2% 2%

13%

41%

33%

10%

1% 2%

6%

39%

42%

11%

2%1%

4%

44%

41%

7%

1% 2%

5%

42%40%

10%

2%4%

7%

44%

37%

7%

Don't know/can't say Substantial decrease Slight decrease No Change Slight increase Substantial increase

What is likely to happen to your entity’s level of investment in Taiwan over the next 12 months?

2011 2012 2013 2014 2015 2016

Unfortunately, or realistically…

Taiwan is generally viewed as “Not a high priority” at the global head office level – with more than half of our member companies saying it is not in the top ten priority markets.

We have said in previous years and repeat again, that Taiwan needs to better position and market itself to try and gain more global attention as a business destination. Changes to: personal taxation rates; improvements to direct foreign investment rules and incentives; research & development incentives; and lowering bureaucratic barriers, amongst other things, may go a long way here.

10%

3%

54%

11%10%

7%5%

10%

3%

46%

15%

7%

10% 10%

10%

4%

45%

13%10% 9% 8%

10%

5%

48%

10%7%

10% 10%

11%

1%

48%

12%8% 10% 10%

6% 5%

51%

10%

6%

14%

9%

How does Taiwan fit into your global entity’s investment plans?

2010 2011 2012 2013 2014 2015

Looking forward five years…

After a fairly consistent and optimistic outlook over recent years, this year there has been a significant (statistically), decline in the level of positivity. Now, less than 50% of our members are either “slightly” or “optimistic” about the next 5 years of business in Taiwan. This should be a major cause for concern for the next government.

How would you describe your five-year business outlook for Taiwan?

3%

10%

7%

52%

29%

1%

7%

22%

43%

28%

3%

16%

26%

37%

19%

4%

14%

29%

37%

17%

2%

14%

24%

42%

18%

5%

19%

29%

34%

13%

Pessimistic Slightly Pessimistic Neutral Slightly Optimistic Optimistic

How would you describe your five-year business outlook for Taiwan?

2011 2012 2013 2014 2015 2016

Merger & Acquisition (M&A) Activity

As economic indicators go, merger and acquisition activity has long been a sign of a maturing equity market and as general indicator of economic activity. From our survey over the last 6 years, Taiwan appears to have a relatively low, but consistent level of M&A activity.

Merger & Acquisition (M&A) Activity

Over the past six years around 12% of our companies engaged in merger and acquisition (M&A) activity of a Taiwanese entity, each year.

This year, as in previous years, some tried and failed (5%), and some considered M&A but didn’t pursue it (20%). However, for the vast majority of business leaders (69%), M&A, understandably, simply isn’t on their radar in any given year.

61%

23%

4%

7%5%

71%

17%

4% 4% 4%

71%

18%

2%5% 5%

72%

17%

3% 4% 3%

68%

21%

3%5%

3%

69%

20%

5%3% 4%

Did not pursue or consider Considered, but didn'tpursue

Pursued, but not successful Pursued, and still in theprocess

Pursued and completed deal

Did your entity pursue, or consider, a merger with or acquisition of a Taiwanese entity in the past 12 months?

2011 2012 2013 2014 2015 2016

When it happens, there are sound business reasons for M&A

While only a few companies did attempt the M&A route in the past 12 months, their reasons for doing so, as in previous years, show sound business logic such as: To enlarge customer base, gain synergies (by reducing costs and improving profits),increase local market access; and to acquire capacity or technology . These, as they have been in past years, are the major drivers behind M&A.

0 2 4 6 8 10 12

Gain Taxation advantages

Improve IPO possibility

Acquire management team

Acquire key local brand(s)

Gain access to China market

Defensive move to counter competitor(s)

Acquire business license in a restricted industry

Acquire technology

Acquire capacity

Gain greater local market access

Ability to gain synergies (reduce costs - improve profits)

Enlarge customer base

Top Objectives of M&A during 2015

Primary Secondary Tertiary

Finding an “appropriate target” the major challenges to M&A in 2015

Followed by negotiating its valuation, and obtaining government approvals.

We note that inconsistency in interpretation of, and a lack of transparency in, government regulations, list prominently in the challenges standing in the way of mergers and acquisitions.

0 2 4 6 8 10 12

Information leakage

Negotiating the letter of intent

Language issues

Transparency of regulations

Inconsistent regulatory interpretations

Obtaining government approvals

Financial issues

Obtaining permission for target to be sold

Post-deal restructuring

Cultural issues

Conducting due diligence

Negotiation of valuation gap

Finding an appropriate target

Major Challenges of M&A During 2015

Major Challenge Second Third

One-in-five interested in M&A for 2016

In the past 3 years, 19% of our business claim they would “definitely” or “possibly” consider M&A in the next 12 months.

7%

22%

20%20%21%

11%

5%

17%18%

28%

19%

13%

7%

16%

22%

27%

17%

11%

5%

14%

28%

26%

17%

9%

5%

14%

25%

23%23%

11%

4%

15%

21%

27%

20%

13%

Definitely consider M&Aactivity in next 12

months

Possibly consider M&Aactivity in next 12

months

Unlikely to considerM&A in next 12 months

Definitely not considerM&A activity in next 12

months

Don't knowPrefer not to answer

Likelihood to consider M&A in the next 12 months

2011 2012 2013 2014 2015 2016

What impacts their business?

Inadequate/Out-dated laws this year has topped the list of greatest negative impacts on our members’ businesses, followed by Inconsistent regulatory interpretation and Changes in local demand”. Other consistent (negative) impacts are:

– Governmental Bureaucracy

– Insufficient notice before changes to regulations or laws are introduced

– Inconsistent application of the Rule of Law

Which of the following impacts your operation in Taiwan? 2016 Ranking

Issue 2016 2015 2014 2013 2012 2011

Inadequate/Out-dated laws 1 4 5 4 6 5

Inconsistent regulatory interpretation 2 1 2 2 2 3

Changes in local demand 3 2 3 1 1 1

Governmental Bureaucracy 4 3 1 3 4 2

Insufficient notice before changes to regulations or laws are introduced

5 8 6 6 New in 2013

Inconsistent application of the Rule of Law 6 5 4 New in 2014

Ability to recruit appropriate new personnel 7 6 9 5 3 4

Differences between local and internationally accepted standards

8 7 7 New in 2014

Currency Exchange rate fluctuations 9 16 12 7 5 7

Lack of transparency 10 9 8 9 10 10

Issue 2016 2015 2014 2013 2012 2011

Political turmoil in Taiwan 11 10 13New in 2014

China-Taiwan government relations 12 11 16 13 7 8

Changes in employment expenses 13 13 10 8 8 9

Customs & Trade regulations 14 12 14 15 11 16

Corporate Taxation levels 15 14 15 11 9 6*

Domestic protectionism 16 15 11 12 12 12

Government reform/restructuring 17 17 17 10 New in 2013

Personal Taxation levels 18 18 18 18 22 6*

Intellectual Property Rights infringements 19 23 21 14 15 15

USA - Taiwan government relations 20 20 23 22 16 19

*Combined in 2011

Which of the following impacts your operation in Taiwan? 2016 Ranking continued

Issue 2016 2015 2014 2013 2012 2011

Changes in overseas demand 21 22 20 16 21 18

Direct flights to/from Mainland 22 21 22 17 14 28

Inadequate Infrastructure (Power, Water, Telecommunications, Transport, etc.)

23 30 29 26 27 21

Financial Industry reform 24 29 31 20 23 23

Government procurement procedures 25 28 26 27 26 25

The Economic Cooperation Framework Agreement (ECFA) 26 24 30 28 18 14

Changes in Energy costs 27 25 19 New in 2014

Ability of PRC personnel to travel to Taiwan 28 34 33 New in 2014

Corruption 29 19 24 19 17 22

Changes in Tariffs 30 26 27 21 20 24


Issue 2016 2015 2014 2013 2012 2011

Changes in Raw Material costs 31 31 32 24 25 26

Changes in Transport costs 32 27 25 25 19 17

Changes in Financing costs 33 32 28 23 24New in 2012

EU - Taiwan government relations 34 33 35 29 28 27

Ability of PRC personnel to work in Taiwan 35 36 36New in 2014

Illegal imports 36 35 34 30 29 29

Ability to secure credit, locally 37 37 37 New in 2014

Slow processing of PRC personnel work permits 38 New in 2016

Ability to raise capital, locally 39 38 38 New in 2014

Access to Private Equity financing 40 39 39 New in 2014


“Lack of double tax treaties and other trade agreements with other countries than US, China

for example Korea and Japan.”

“Biased TV talk shows & media reports.”

“Lack of motivated well-educated design staff.”

“Government healthcare funding and annual price cut.”

What impacts their business?Other Direct Quotations

Each year we have asked: “Over the past 3 years, how would you describe the progress made in Taiwan in (list of issues).”

We are therefore able to cross-tabulate the progress and intensity* of these impacts over time.

Looking at the top ten issues that have the greatest impact on our member companies, we can see thatsince 2008-2010, in the views of our business leaders, they all show a trend of a lack of progress.

*Intensity is a numerically weighted measure applied to the calculation of the net difference between progress and regress.

Analysis of the Top 10 impacts

-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

1. INADEQUATE/OUT-DATED LAWS

-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

2. INCONSISTENT REGULATORY INTERPRETATION

Intensity and trend of perceived lack of progress in Top 10 impacts

-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

3. CHANGES IN LOCAL DEMAND

-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

4. GOVERNMENTAL BUREAUCRACY


-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

5. INSUFFICIENT NOTICE BEFORE CHANGES TO REGULATIONS OR LAWS

ARE INTRODUCED

-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

6. INCONSISTENT APPLICATION OF THE RULE OF LAW


-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

7. ABILITY TO RECRUIT APPROPRIATE NEW PERSONNEL

-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

8. DIFFERENCES BETWEEN LOCAL AND INTERNATIONALLY ACCEPTED

STANDARDS


-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

9. CURRENCY EXCHANGE RATE FLUCTUATIONS

-100

-50

0

50

100

150

200

250

2008-2010 2010-2012 2012-2014

10. LACK OF TRANSPARENCY


The Lack of Progress in Taiwan on Key Issues

When we view the issues that have made progress over the

period 2008-2015 time horizon, some good strides have made to

help business – especially in connection with China.

There has also been some progress, on Taiwan–USA relations

and intellectual property rights enforcement.

In the following list, those items in green have shown progress.

All other issues have either regressed or stagnated.

Recently, “political turmoil” has regressed the most.

Areas where regress, or little progress, has occurred in the past 3 years. Worst to Best ranking

Issue2013-

152012-

142011-

132010-

122009-

112008-

10

Political turmoil in Taiwan 1 1 1

Personal Taxation levels (*combined with Corporate in 2010) 2 2 15 11 9 26*

Changes in Local Demand 3 16 3 3 20 20

Governmental reform/restructuring 4 15 11 15 19 18

Ability to Recruit Appropriate New Personnel 5 13 5 1 5 3

Consistency of the application of the Rule of Law (i.e., well-established and clearly written rules, regulations, and legal

principles)6 7 9

Consistency of regulatory interpretations 7 10 7 2 2 1

Governmental Bureaucracy 8 5 6 4 11 11

Sufficiency of notice before changes to regulations or laws are introduced

9 12 8

Changes in Employment expenses 10 8 4 5 1 2

Issue 2013-15

2012-14

2011-13

2010-12

2009-11

2008-10

Domestic protectionism 11 3 10 6 3 7

Revision of inadequate/Out-dated laws 12 11 12 14 9 5

Changes in Overseas Demand 13 26 19 12 16 24

Government procurement procedures 14 6 16 9 7 9

Changes in Financing costs 15 21 20 10 8 8

Illegal imports 16 23 27 16 12 10

Transparency 17 24 18 18 15 15

Changes in Tariffs 18 18 31 19 18 16

Ability to secure credit, locally 19 29 23

Customs and trade regulations 20 25 26 22 17 17


Issue 2013-15

2012-14

2011-13

2010-12

2009-11

2008-10

Changes in Transport costs 21 20 13 8 6 12

Access to Private Equity financing 22 17 25

Differences between local and Internationally accepted standards 23 27 28

The Economic Cooperation Framework Agreement (ECFA) 24 30 27 27 27 28

Corporate Taxation levels 25 14 32 21 26 26*

Changes in Raw Material costs 26 9 14 7 4 4

Changes in Energy costs 27 4 2

Financial Industry Reform 28 28 21 13 13 13

Management of Currency Exchange rate fluctuations 29 32 24 17 14 14

Ability to raise capital, locally 30 19 22


Issue 2103-15

2012-14

2011-13

2010-12

2009-11

2008-10

Corruption 31 22 17 20 24 19

Infrastructure (Power, Water, Telecommunications, Transport, etc.)

32 36 29 23 25 22

EU - Taiwan government relations 33 31 30 24 23 25

Processing of PRC personnel work permits 34

Ability of PRC personnel to work in Taiwan 35 34 35

Intellectual Property rights enforcement 36 33 33 25 22 23

USA - Taiwan government relations 37 35 34 26 21 21

China - Taiwan government relations 38 37 38 28 28 27

Ability of PRC personnel to travel to Taiwan 39 38 37

Direct flights to/from the Mainland 40 39 39 29 29 29


The major worries confronting business

A slowdown in the global economy is of greatest concern for our business leaders.

Downturns in Taiwan’s domestic consumption and in the Chinese economy along with uncertainty in Taiwan’s policy towards China are, unsurprisingly, the next greatest worries for them.

Worsening political unrest within Taiwan, round-out the top five concerns.

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

Cybersecurity risks to enterprise

Taiwan Dollar (TWD) appreciation

Taiwan unemployment rising

Taiwan inflation rising

Economic slowdown in Europe

Energy shortage in Taiwan

Economic slowdown in USA

Decreased exports

Enactment of TPP without Taiwan as a member

Lack of Human Resources

Taiwan Dollar (TWD) depreciation

Increased governmental interference

Increased domestic political unrest

Uncertainty about Taiwan's cross-Strait policy

Economic slowdown in China

Slowdown in Taiwan's domestic consumption

Global economic slowdown

What are the major risks facing your entity in the coming years?

How can governments help?

We asked: What are the main things the Taiwanese and the USA governments could do in the next 12 months to help business?

For the Taiwan government the top issues are the recurring themes of: Simplify Government Bureaucracy, Reduce Political Turmoil, Resolve Inadequate/Out-dated laws, and Reduce Personal taxation.

Top 10 things Taiwan Government Could do to Help

Issue 2016 2015 2014 2013 2012 2011

Simplify Government Bureaucracy 1 2 2 1 1 1

Reduce Political Turmoil in Taiwan 2 1 1

Resolve Inadequate/Out-dated laws 3 3 7

Reduce Personal Taxation 4 5 6 3 3 2

Devise plan to stimulate local demand 5 6 3

Provide sufficient notice before changes to regulations or laws are introduced.

6 8 8

Remove differences between local & internationally accepted standards

7 4 5

Consistent application of the Rule of Law 8 7 4

Improve Research & Development incentives 9 15

Reduce domestic protectionism 10 9 11

Other things Taiwan Government Could do to Help (Ranked)

Issue 2016 2015 2014 2013 2012 2011

Educate civil servants on international regulatory best-practices

11 27

Increase Direct Foreign Investment incentives 12 14

Implement Financial Industry Reform 13 26

Negotiate and sign more bilateral trade deals with other (non-US) countries

14 18

Devise plan to stimulate Overseas Demand (e.g. exports, tourism)

15 30

Liberalize the Labour market 16 13 23 5 5 10

Improve Inadequate Infrastructure (Power, Water, Telecommunications, Transport, etc.)

17 25

Reduce Corporate Taxation further 18 20

Improve Government procurement procedures

19 22

Tighten enforcement of Intellectual Property rights

20 23

More Things Taiwan Government Could do to Help (Ranked)

Issue 2016 2015 2014 2013 2012 2011

Manage Currency Exchange rate fluctuations 21 29

Broaden ECFA 22 10 9 10 7 7

Negotiate and sign a Bilateral Investment Agreement with the USA

23 12 14 16 19

Reduce Corruption 24 16

Provide adequate transition or grace period when implementing new laws and regulations

25

Ratify the China-Taiwan Service Trade Pact (CSSTA)

26

Reduce Tariffs 27 24

Reduce Employment expenses 28 11 24

Pass Free Economic Pilot Zones (FEPZ) legislation

29 19

Conduct more regular follow-up meetings TIFA items with the USA

30 34

How else could Taiwan government help? Additional suggestions

“Build Taiwan as expatriate hub for NE Asia”

“All of the above. Taiwan must modernize it's entire bureaucracy, it's banking, eliminate protectionism, it's preferential treatment of domestic airlines and join the

21st century. In many ways China is more forward thinking in business.”

“Allow foreign workers to come to Taiwan (non PRC) to fill the labour shortages.”

How else could Taiwan government help? Additional suggestions

“Improve education system to improve R&D and innovation capabilities.”

“Reduce dividend withholding tax for foreign investors.”

Main things USA Government Could do to Help (Ranked)

Issue 2016 2015 2104

Support Taiwan's admission into the TPP 1

Assist Taiwan to prepare for accession to TPP 2 1

Negotiate and sign a Bilateral Investment Agreement with Taiwan 3 2 1

Continue to liaise with Taiwan on USA experience regarding regulatory coherence

4

Help establish cooperative exchanges between US and Taiwan regulatory agencies 5

Reduce Personal Taxation 6 6 4

Send more senior US Government officials to visit Taiwan 7 4 5

Ensure that regular meetings are held with Taiwan under the TIFA process 8

Reduce Corporate Taxation 9 5 3

Repeal or re-evaluate the Foreign Account Tax Compliance Act (FATCA) 10 7

Resolve Agricultural disputes with Taiwan 11 9

Negotiate and finalize an Extradition Treaty with Taiwan 12 8 6

Conduct more regular follow-up of TIFA items with Taiwan 3 2

How else could USA government help?Additional suggestion…

“Greatly reduce ‘pork lobbying’ -- there are other

far more important issues and it harms the

American ‘brand’ every time it is brought up,

which damages our business.”

Taiwan Government Incentives

For the third consecutive year, we asked our members if they had taken advantage of any incentives provided by the various levels of government in Taiwan. The answer was that the majority had not - only 8% did.

Don't know 12%

Don't know 19%

Don't know 15%

No, 73%

No, 71%

No, 76%

Yes, 15%

Yes, 10%

Yes, 8%

2014

2015

2016

Has your company participated in, or taken advantage of, any of the Taiwan government's business incentives?

Taiwan Government Incentives

The most popular incentives for the small number who have qualified and availed themselves are:

• Free Trade Zone Incentives• Tax Incentives for R&D• Indirect Tax Incentives for Science Parks, Export Processing

Zones, Bonded Factories, and Bonded Warehouses• Industrial Technology Development Program

It should be noted that in some cases, multiple incentives were utilized.

Full Time Equivalent Employees(FTEE)

Full Time Equivalent Employees (FTEE) are defined by counting part-time employees as a half an employee and adding them to the number of full-time employees.

We estimate that AmCham member companies employ approximately a quarter of a million full time equivalent employees in Taiwan.

As in past years, our members show continuing growth in employee numbers.

During 2015

• 51% (versus 55% in 2014) of AmCham companies increased their FTEE numbers either significantly or slightly

• 32% (same as 2014) maintained their numbers of FTEE

• 17% (2014 in 13%) decreased their numbers either slightly or significantly

1%

16%

39%

36%

7%

1%

12%

32%

48%

7%

2%

15%

32%

43%

8%

Decreased significantly Decreased slightly No change Increased slightly Increased significantly

Changes in Employment Levels Over Previous Year(Actual Changes in FTEE)

2013 Actual 2014 Actual 2015 Actual

Our members were reasonably accurate in the forecasts they made during 2014 about 2015.

If anything, they under-estimated the actual growth.

2014 Forecast and 2015 Actual

2%

15%

32%

43%

8%

1% 0%

8%

49%

39%

2%

Don't know/Can't say Decreased significantly Decreased slightly No change Increased slightly Increased significantly

Changes in FTEE –Actual vs. Forecast

2015 Actual 2014 Forecast

When the decreases are taken away from the increases in FTEE, and numerically weighted to take into account the degrees of change, we see that in 2015 there was a net gain in FTEE numbers of 38%. This compares to gains of 47% and 33% in 2014 and 2013, respectively.

During 2015

2013

2014

2015

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Actual Net Increases in FTEE (weighted)

In 2015, net FTEE growth occurred across a variety of business sizes – from the quite small to the very large –with only two exceptions (6 to 10 and 300 to 350).

FTEE Growth by Employer Size

-2.5 -0.5 1.5 3.5 5.5 7.5 9.5 11.5

5 or less6-10

11-2021-3031-4041-5051-75

76-100101-150151-200201-250251-300301-350351-400401-450451-500501-550551-600601-650651-700701-750751-800801-850851-900901-950

951-1,0001,001-1,5001,501-2,000

More than 2,000

2015 % Net Change in FTEE’s by Number of Employees

Top Human Resource Consulting Group 4 Foods and/or Non-Alcoholic Beverages

Group 2 Chemicals Group 4 Insurance

Group 2 Finance Group 4 Legal Services

Group 2 Medical Devices Group 4 Logistics and Distribution

Group 3 Banking Services Group 4 Pharmaceuticals

Group 3 Consumer Packaged Goods Group 4 Real Estate and Rental and Leasing

Group 3 Manufacturing - General Group 4Semiconductor and Other Electronic Component

Manufacturing

Industries that increased FTEE in 2015

Hiring forecast to increase in 2016

• The majority (41%) of our members plan to increase their headcount during 2016

• 46%, will maintain their 2014 levels

• Only 11% anticipate reducing their headcounts slightly

1% 0%

8%

49%

39%

2%1% 2%

7%

42%

45%

4%1%

2%

9%

46%

37%

4%

Don't know/Can't say Decrease significantly Decrease slightly No change Increase slightly Increase significantly

Hiring Forecasts for the Coming Year(Forecast Changes in FTEE)

2014 Forecast 2015 Forecast 2016 Forecast

On a numerically weighted basis, 31% of our business leaders are forecasting an increase in employment numbers. This compares with last year’s forecast of 42% and the 35% forecast in 2014.

Forecast growth in 2016

2014

2015

2016

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Businesses forecasting a net increase in FTEE in 2016 (weighted)

Growth is forecast over most companies regardless of size – with three, mid-sized exceptions:

• 300 to 350 FTEE’s

• 400 to 450

• 450 to 500.

Forecast FTEE by Number of Employees

-2.5 -0.5 1.5 3.5 5.5 7.5 9.5 11.5

5 or less6-10

11-2021-3031-4041-5051-75

76-100101-150151-200201-250251-300301-350351-400401-450451-500501-550551-600601-650651-700701-750751-800801-850851-900901-950

951-1,0001,001-1,5001,501-2,000

More than 2,000

Net % Forecast change in FTEE’s by number of Employees

Top Human Resource Consulting Group 5 Foods and/or Non-Alcoholic Beverages

2 Medical Devices Group 5 Finance

3 Insurance Group 5 Health Care Services

Group 4 Logistics and Distribution Group 5 Legal Services

Group 4 Pharmaceuticals Group 5 Manufacturing - General

Group 4Real Estate and Rental and

LeasingGroup 5 Market Research Services

Group 4 Accounting Services Group 5Semiconductor and Other Electronic Component

Manufacturing

Group 5 Banking Services Group 5 Travel and Leisure

Industries forecasting FTEE growth 2016

Human Resources – Remain a big issue

Deficiencies in the quantity and quality of available human resources are one of the highest risk factors seen as confronting businesses in the future.

We asked our corporate leaders to give us their impressions of the quality of available human capital in Taiwan. First the positives…

Taiwanese Human Resources are seen as …

Hard-working, very trustworthy, easy to develop or train, highly productive, very loyal, extremely well-educated, generally show a high degree of emotional intelligence quotient (EQ), and generally well-rounded. A very positive profile of the workforce.

Understandably, no major changes where seen in this year’s survey compared to prior years.

0 50 100 150 200 250

Well-rounded

Show a high degree of Emotional Intelligence (EQ)

Easy to retain

Extremely well educated

Very loyal

Highly productive

Easy to develop/train

Very trustworthy

Hard working

Net Positive Perceptions of Human Resources in Taiwan

However…

They are perceived as being difficult to recruit, not being innovative, not being of ‘World-class’ standard and they do not display a great deal of creativity. These are enduring perceptions over the six years of this study.

-250 -200 -150 -100 -50 0

Show a great deal of initiative

Show a good deal of creativity

Good English Language skills (If required)

Innovative

Of 'World class' standard

Easy to recruit

Net Shortcomings of Human Capital in Taiwan

Overall perceptions

Whilst the preceding charts show the net differences in scores of positive and negatives perceptions, it should be remembered that there are varied views with many opposing views on the same criterion. The next chart shows these.

-150 -100 -50 0 50 100 150 200

Show a good deal of creativity

Of 'World class' standard

Innovative

Show a great deal of initiative

Show a high degree of Emotional Intelligence (EQ)

Easy to recruit

Good English Language skills (If required for role)

Well-rounded

Easy to retain

Extremely well educated

Easy to develop/train

Highly productive

Very loyal

Very trustworthy

Hard working

Perceptions of Human Capital in Taiwan

Strongly Agree

Agree

Disagree

Strongly Disagree

Trans Pacific Partnership (TPP)

The TPP is s a free-trade agreement currently being negotiated by 12 nations (US, Australia, New Zealand, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Canada, Mexico and Peru). The aims of TPP are to eliminate, or at least substantially reduce, barriers to trade and investment and to create 'gold standards' to deal with economic issues such as intellectual property.

Trans Pacific Partnership (TPP)

TPP - Business leaders are sure that …

• Taiwan is capable of meeting the high standards required for membership into the Trans Pacific Partnership (TPP).

• Whilst only 43% are convinced that Taiwan will be accepted as a member of the TPP, nonetheless, a resounding majority (87%) of leaders believe that Taiwan should continue to pursue membership with only 2% suggesting that it shouldn’t.

Yes, 65%Yes, 68%

Yes, 60%

No, 13%No, 12%

No, 12%

Don't know, 23% Don't know, 20%

Don't know, 28%

2014 2015 2016

Is Taiwan capable of meeting the high standards required for membership into the TPP?

Yes, 40%Yes, 36%

Yes, 43%

No, 21%

No, 19%No, 11%

Don't know, 39%Don't know, 45% Don't know, 46%

2014 2015 2016

Will Taiwan be accepted as a TPP member?

Yes, 83% Yes, 83%Yes, 87%

No 2% No 3%

No 2%Don’t know, 15% Don’t know, 14%

Don’t know, 11%

2014 2015 2016

Should Taiwan pursue membership of the TPP?

TPP: Additional comments

“Taiwan will have to substantially reduce or eliminate domestic protectionism to join. If it

does not it will not be able to join- with disastrous economic consequences.”

“The risk of China blocking Taiwan's entry is high. Preparations should be made to avoid this

possible eventuality.”


“In theory I believe Taiwan has the capacity but to meet it will require lots of changes in

particular in terms of mindset and governance across government institutions so not sure they

will be able to meet the timelines.”

“Our business's existence in Taiwan relies on Taiwan being accepted as a TPP member”


“Taiwan has to be clear, which strategic industries or capabilities it has to develop. The optoelectronic industry in Taiwan is facing strong headwind from

China and might not remain competitive. New industries will have to be developed. Taiwan is a small market and mainly benefiting from export. Whether TPP will be helpful for that by increasing

export opportunities or just increases competition in the country (maybe to the benefit of the consumers,

depending on the agreed upon standards), will depend on the future focus of Taiwan. Assuming

that the agreed upon standards will not put consumers at risk, the export opportunities should

outweigh the increased competition.”


“TPP or not, Taiwan really needs to step up in its regulatory reform if it doesn't want to be

marginalized economically.”

“The rationale behind the TPP is purely security-centric, although politicians cannot say this aloud. Taiwan should make any necessary

sacrifices to join, but the domestic protectionist sentiment is too strong. Also, US commitment is

wavering due to failure of politicians to recognize the security imperative.”

Yes87%

No3%

Don't know/Can't say

10%

Should the USA government support Taiwan’s ascension into the TPP?

“Emphatic, public support should be given by the U.S.”

“U.S. needs to treat Taiwan as an equal partner.”

“TPP is crucial to USA foreign policy and crucial to Taiwan trade policy.”

Additional Comments

“But Taiwan has to make smart decisions on its own and align itself with the basic standards required. This is clearly

a pact aimed at showing China that it cannot do whatever it wants in Asia, and part of that is sending a message that the US stands by Taiwan (China gets the message; they

know this is not really about trade), but if Taiwan does not reform and take care of itself (economically, as well as in

the security realm), the government here cannot expect US elected officials to stand by it indefinitely for purely

strategic reasons, which the US politicians themselves apparently do not even understand. Thus, the TPP can be

seen as a barometer of the US's commitment to Taiwan and Taiwan's commitment to itself.”

Additional Comments

China-Taiwan Cross-Strait Services Trade Agreement (CSSTA)

In June, 2013 China and Taiwan signed a services trade agreement (although, this has still not yet been ratified into law), with the intent to open areas such as financial services, retail and travel, to greater levels of cross-strait investment. We asked our business leaders what they thought about it and who they believed would gain (or lose) from it.

Assist, 68%Assist, 60%

Assist, 55%

Harm, 15%

Harm, 16%

Harm, 15%

Don't know/can't say, 17%Don't know/can't say, 24%

Don't know/can't say, 30%

2014 2015 2016

How will the China-Taiwan Cross-Strait Services Trade Agreement (CSSTA) impact Taiwan

Assist, 81%

Assist, 70%Assist, 66%

Harm, 5%

Harm, 7%

Harm, 0%




2014 2015 2016

How will the China-Taiwan Cross-Strait Services Trade Agreement (CSSTA) impact China

Assist, 23% Assist, 26% Assist, 25%

Harm, 37%

Harm, 11%Harm, 9%


Don't know/can't say, 63% Don't know/can't say, 66%

2014 2015 2016

How will the China-Taiwan Cross-Strait Services Agreement (CSSTA) impact USA

“China cannot be trusted, they violate Human Rights etc. Any cooperation with China only benefits China,

any other partnerships will provoke China.”

“There are pros and cons for Taiwan: tourism will be bringing more money but also might have a negative effect on housing prices. More competition might be beneficial for consumers, however, the standards for

health and safety will be very important.”

Unprompted Additional Comments

“The help it will give China and harm it will bring to Taiwan will be in the geostrategic/security realm.

Economically, it would be good for Taiwan (although would only benefit the few ultra-rich), and will have

little to no economic effect on China or the US.”

“In the long run Taiwanese people are better off without China investment.”

Unprompted Additional Comments

Yes55%

No13%

Don't know32%

Should the Taiwan Legislature ratify the CSSTA?

“I am against such an agreement despite the short term positive effects for businesses, it will be harmful to the

general population in the long run.”

“And the sooner the better.”

“Focus on goods first and expand to other markets before working on services with any other.”

Unprompted comments on the question: Should the Legislature ratify the CSSTA?

“Taiwan’s credibility continues to be undermined by Legislative process and inability of executive

government to make agreements.”

“China will always do what is in their own interest, look at the South China Sea issue. Any agreement that gives

China access to Taiwan is dangerous.”

“It will all depend on the standards, which have to be established, in order to prevent harm to the

consumers.”


“Security trumps economics. Period. The fact that the Chinese government is so intent on pushing through an agreement with Taiwan that, despite what proponents claim, offers essentially no economic benefit to China is

concerning. If not economic, what benefit does the Chinese government see in this? Clearly political. CSSTA is the fastest route to erode Taiwan's sovereignty. The wolves in the CCP are licking their chops and cannot

wait for the Taiwanese lambs to follow their blind shepherds to their doom.”


ECFA: Business leaders are (still) bullish

The Economic Cooperation Framework (ECFA),is generally perceived has having a positiveeffect on Taiwan as a whole, and positive for ourmembers’ businesses. The effect on the U.S.A. is more neutral withmany seeming unsure what, if any, impact it hashad or will have, on the U.S.A.

2% 2%5%

3%

49%

40%

9%

3% 2%

11%

46%

30%

9%

1%

4%

13%

60%

13%12%

1%

9%11%

54%

13%14%

4%6%

17%

39%

21%

11%

3%

11%

22%

36%

17%

Don't know/can't say Very Negative Effect Some Negative Effect Neither Positive norNegative

Some Positive Effect Very Positive Effect

ECFA’s Effect on Taiwan

2011 2012 2013 2014 2015 2016

8%

2%

7%

27%

42%

15%

7%

1%3%

41%

38%

9%10%

2% 2%

37%

44%

5%

9%

1%

5%

41%40%

4%

11%

1%

4%

37%

34%

13%11%

0%

7%

45%

29%

9%



ECFA’s effect on my business

2011 2012 2013 2014 2015 2016

27%

2%

8%

32%

27%

5%

25%

2%

6%

35%

30%

3%

23%

1%

8%

36%

30%

2%

23%

1%

10%

35%

27%

4%

20%

1%

13%

38%

20%

8%



ECFA’s effect on the U.S.A.(NB: New question in 2012)

2012 2013 2014 2015 2016

TIFA: Business leaders glad to see talks

The resumption of Trade and InvestmentFramework Agreement (TIFA) talks in 2013, aftera more than five-year break, was a welcomerelief. Taiwan is seen as receiving the greatestadvantage resulting from TIFA talks, followed bythe USA, and then to a lesser extent, ourmembers’ individual businesses.

17%

0%

2%

21%

42%

18%17%

1%3%

12%

37%

30%

Don't know/Can't say Major Disadvantage Slight Disadvantage Neither Advantage norDisadvantage

Slight Advantage Major Advantage

Belief that TIFA talks impact Taiwan

2015 2016

17%

0%2%

21%

42%

18%19%

1% 1%

17%

47%

15%

Don't know/Can't say Major Disadvantage Slight Disadvantage Neither Advantage norDisadvantage


Belief that TIFA talks impact USA

2015 2016

14%

0%1%

32%

39%

14%

17%

0%2%

39%

28%

14%

Don't know/Can't say Major Disadvantage Slight Disadvantage Neither Advantagenor Disadvantage


Belief that TIFA talks impact my business

2015 2016

The lack of a Bilateral Investment Agreement (BIA) with the USA…

Is perceived as negatively impacting Taiwan the most. The USA and to a lesser extent their businesses, are believed to be disadvantaged by the lack of a BIA.

22%

40%

11%

7%

20%

22%

44%

13%

6%

16%

19%

34%

17%

6%

24%

20%

32%

14%

7%

27%

17%

34%

15%

6%

28%

Major Disadvantage Disadvantage Slight Disadvantage Not a disadvantage Don't know/can't say

Effect on Taiwan of a lack of a Bilateral Investment Agreement with the U.S.A . (NB: New question in 2012)

2012 2013 2014 2015 2016

8%

23%22%

25%

22%

9%

28%

22%21%

20%

9%

25%

20%

18%

27%

12%

25%

16%

20%

27%

9%

20%

15%

23%

33%

Major Disadvantage Disadvantage Slight Disadvantage Not a Disadvantage Don't know/can't say

Effect on my business of a lack of a Bilateral Investment Agreement between Taiwan and the U.S.A. (NB: New question in 2012)

2012 2013 2014 2015 2016

12%

27%

22%

14%

25%

9%

39%

20%

10%

21%

10%

31%

23%

9%

26%

8%

27%

22%

13%

30%

10%

27%

22%

11%

31%

Major Disadvantage Disadvantage Slight Disadvantage Not a Disadvantage Don't know/can't say

Effect on the U.S.A. of a lack of a Bilateral Investment Agreement with Taiwan (NB: New question in 2012)

2012 2013 2014 2015 2016

*Whilst we use the term “Taiwan” it should be remembered that most of our leaders live in the Taipei area and many of their comments will reflect “living in Taipei”.

And finally…”The Living is Nice, Easy, & Safe”

When asked about the quality of life in Taiwan*, corporate leaders strongly agree that Taiwan is a place where: “Taiwanese people are extremely nice”; “My family feels safe”; and Understandably, there was no significant change in the rankings in this year’s survey.

The Top Benefits of Living in Taiwan (Ranked)

Benefits 2016 2015 2014 2013 2012 2011

Taiwan is an easy country to live in 1 3 3 3 4 3

Taiwanese people are extremely nice 2 1 1 1 1 2

My family feels safe in Taiwan 3 2 2 2 2 1

Taiwan provides quality Health/Medical/Dental services

4 4 4 4 3 4

Alternative transportation options are usable and provide options to driving my car (i.e., buses, bike lanes, taxis, trains, sidewalks).

5 5 5 7 6 5

The Top Benefits of Living in Taiwan (Ranked)

Benefits 2016 2015 2014 2013 2012 2011

Mobile telephone coverage is excellent 6 8 8 9 9 8

Taiwan provides adequate shopping opportunities 7 7 6 6 7 7

Taiwan delivers reliable electricity 8 6 7 5 5 6

Taiwan provides quality parks and trails 9 12 10 12 12 11

Internet connectivity is excellent 10 11 17 14 8 9

The Postal service is excellent 11 9 9 8 10 10

Living in Taiwan…The not so great things.

Given the topicality of food scandals it was not surprising that food safety reached the number one spot last year, of the worst things about living in Taiwan. However, this year it drops to the third position. As we have seen over past years:

– Taiwan is not an English-friendly environment– Banking and other financial services are seen as sub-

par– Water runoff from storms is not controlled and does

not minimize flooding

The Least Appreciated Aspects of Living in Taiwan (Ranked)

Concerns 2016 2015 2014 2013 2012 2011

Taiwan provides an 'English-friendly' environment for me and my family

1 2 1 1 1New in 2012

Banking and other financial services are excellent 2 3 3 4 6 4

Taiwan provides safe food 3 1New in 2015

Water runoff from storms is controlled and minimizes flooding

4 7 5 2 2 1

Taiwan provides quality drinking water. 5 4 2 3 3 3

The Least Appreciated Aspects of Living in Taiwan (Ranked)

Concerns 2016 2015 2014 2013 2012 2011

The library services provided to our community are current and meet our needs

6 5 4 7 5 4

The standard of schooling is excellent 7 6 8 9 10 8

Taiwan government is approving development that enhances the quality of life in our community

8 13 11 10 12 17

Taiwan provides quality youth activities 9 8 6 6 4 2

There are plentiful opportunities to enjoy the arts 10 11 12 14 12 15

The sewer system in Taiwan works reliably 11 10 7 5 8 7

Taiwan provides quality Police services 12 9 13 8 9 6

136

About our sample

http://www.sxc.hu/browse.phtml?f=download&id=1319105&redirect=photo

http://www.sxc.hu/browse.phtml?f=download&id=1319105&redirect=photo

Who, When, and How.

The survey was addressed, via email, to the 406 voting representatives – usually the CEO – among AmCham’s Corporate Sustaining and Company membership. The survey invitation was sent out on October 23, 2015, and the last response was accepted on December 18, 2015.The 30-question survey was conducted online with each respondent receiving a unique link. Certain question choices were randomized - to avoid bias.The survey received a total of 208 responses, representing a 51% response rate.

Industry Classifications

Our respondents identified their industry classification based upon the one which best described their principal business in Taiwan.

We have reclassified our sample according to the STANDARD INDUSTRIAL CLASSIFICATION SYSTEM OF THE REPUBLIC OF CHINA（Rev.9 , 2011) and used the STATISTICAL YEARBOOK OF THE REPUBLIC OF CHINA 2014, Edited 2015, for the number of businesses.

Our sample draws from all of the major industrial classifications in Taiwan.

Industry Classifications (Cont’d.)

Our sample is more skewed towards ‘Manufacturing’, ‘Professional Scientific and technical services’, and the ‘Finance and Insurances’ industries. And it is under-weighted in the ‘Wholesale and Retail Trade’ industry –by virtue of the fact there are 650,040 of these businesses registered in Taiwan, representing over 49% of all business numbers. With these covenants, we believe the sample to be a fairly good representation of business in Taiwan and an extremely good sample of AmCham’s corporate membership.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2016 Sample vs. Taiwan

Sample Taiwan

Type of legal entity

Unsurprisingly, the vast majority of businesses in this sample are wholly foreign-owned through a combination of subsidiaries, branch offices and wholly-owned full companies.

A few of those surveyed also have R&D centers and some have regional HQ’s and even global HQ’s, located in Taiwan. Consequently, the results in the next chart show multiple responses and total more than 100%.

0.5%

1.0%

1.0%

1.4%

2.9%

2.9%

6.3%

8.2%

12.5%

14.9%

20.7%

43.8%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

NGO

Research & Development Center

Not for Profit

Representative Office

Global Headquarters

Regional Headquarters

Partnership

Joint Venture

Wholly locally-owned Company

Wholly foreign-owned Firm

Branch Office

Wholly foreign-owned Subsidiary Company

2016 Sample Profile by Business Entity

Time in Taiwan

In terms of the time that there has been a physical presence in Taiwan, our sample is split roughly into four ‘ages’:

– 26% are relatively new to Taiwan with less than 15 years here

– 26% have been established between 16-25 years

– 20% have been established for 26-35 years

– And those who are well-established (more than 35 years) at 28%.

Lessthan

5years

6-10years

11-15years

16-20years

21-25years

26-30years

31-35years

36-40years

41-45years

46-50years

51-55years

56-60years

61-65years

66-70years

71-75years

76-80years

81-85years

86-90years

91-95years

96-100

years

Morethan100

years

% 5.3% 10.1%10.6%11.1%14.4%14.4% 7.2% 6.3% 5.3% 4.3% 3.8% 3.8% 1.0% 1.0% 0.5% 0.0% 0.0% 0.0% 0.0% 0.5% 0.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Length of Physical Business Presence in Taiwan

Number of Full Time Equivalent Employees (FTEE)

Our sample covers a wide spectrum of employers -from the very small to the very large.

– 20% employ 20 or less FTEE

– 30% employ between 21 and 75

– 19% between 75 and 250

– 16% between 250 and 750

– 15 % more than 750 (6% of whom employ more than 2000).

9.1%

6.7%

4.3%

9.1%

3.8%

6.3%

10.6%

3.8%

8.2%

4.8%

2.4%2.9%

1.9%1.9%1.9%1.9%

0.0%

2.9%

1.4%

0.0%1.0%

0.5%0.5%0.0%

1.0%1.0%

4.8%

1.0%

6.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

FTEE

Business Focus

The business leaders surveyed are clearly focused on Taiwan as the primary goal of most entities is to supply the Taiwan market with goods or services. This makes their comments and observations especially pertinent

to the Taiwan government.

Taiwan63%

Greater China5%

Export to the U.S.A.1%

Markets other than Greater China or USA

2%

Multiple markets including Taiwan and Greater China

28%Taiwan & SE Asia

1%

Provide/source goods or services for:

Statistical Testing for Significance

When comparing the results against previous years surveys we performed a Chi-square test for the comparison of two proportions (from the two independent samples), expressed as a percentage. Note that for this Chi-square test Yates' correction for continuity is applied, and that P-values are two-sided (or two-tailed). When the calculated P value is less than 0.05, the conclusion is that the two proportions are significantly different. Throughout the results we have highlighted the difference between the two proportions (at the 95% confidence level) via our commentary when we have detected a significant change.

For more details, please contact…

American Chamber of Commerce in Taipei

Suite 706, Worldwide House,

129 MinSheng East Road, Section 3,

Taipei 10596, Taiwan

Tel: +886-2-2718-8226 Fax: +886-2-2718-8182

[email protected]

OR:

Independent Marketing & Research Limited at: [email protected]

mailto:[email protected]

AmCham Taipei 2016 Business Climate Survey - Full results Jan 19

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Transcript of AmCham Taipei 2016 Business Climate Survey - Full results Jan 19