Preparing to export
Consultation and bespoke research
Visit: www.great.gov.uk for guidance on how to research overseas markets as well as a range of other important issues for exporters.
Although Taiwan is not a large market, different regions have different industry clusters. Therefore regional plans and good local research are likely to be needed, using both desk research and market visits.
You should determine whether:
there is a market for your product or service
your pricing is competitive
to localise your product
to adapt your business model
The questions listed below should help you to focus your thoughts. Your answers to them will highlight areas for further research and also suggest a way forward that is right for your company. You may then want to use this as a basis for developing a formal Taiwan strategy, although this may not be necessary or appropriate for all companies:
It is unlikely that you will have the answers to all these questions at the outset and these ‘knowledge gaps’ could form the basis for further research and investigation. Some of these questions will require quantitative research in your sector, while others involve more contextual and cultural considerations.
Talking to other people in your industry and regularly visiting Taiwan will give you access to the most current advice, and such experience can often lead to new insights and form the basis for further research.
There is also some useful guidance on developing a marketing strategy, customer segmentation, competitor and SWOT analysis etc. on the https://www.great.gov.uk/ site – and the IOE&IT and British Chamber can help too.
There are a number of trade shows held in Taiwan each year – these can be useful to test product viability in the market. The Department for International Trade (DIT) Tradeshow Access Programme at: https://www.gov.uk/guidance/tradeshow-access-programme provides funding in the form of grants for eligible businesses to attend overseas trade shows.
The funding helps your business gain:
experience in attending and getting the most from overseas trade shows
advice and support from trade experts
Visit the DIT events portal at: https://events.trade.gov.uk/ to find upcoming events and missions in Taiwan.
Find out more about marketing your goods and services for Taiwan, at: https://www.great.gov.uk/.
Contact the DIT team at: https://www.gov.uk/world/organisations/department-for-international-trade-taiwan#contact-us for events and company launches at the British Office Taipei.
It is possible to set up a company office, branch office, representative office, job-site office or joint venture in Taiwan.
Mergers and acquisitions are also an option, although you must be aware of fair trade and antitrust issues. Foreign investors need to obtain approval from the Taiwanese Ministry of Economic Affairs (MOEA) to set up a company in Taiwan, see: http://www.moea.gov.tw/Mns/english/home/English.aspx.
Once approval has been obtained, it is possible for foreign investors (with the exception of certain restricted industries) to establish:
an unlimited company
an unlimited company with limited liability shareholders
a limited company
a company limited by shares
Taxation and legal obligations differ depending on which business structure you choose. It is therefore recommended you consult legal professionals in Taiwan prior to establishing an office, to ensure you choose the way that is best suited to your sector of activity. See: https://www.gov.uk/government/publications/taiwan-list-of-lawyers.
[Source – DIT/ gov.uk]
Direct exports and sales
Direct exports means you supply your products direct to the customer. You handle all the logistics of marketing, selling, sending overseas and getting paid.
However, direct sales into the Taiwanese market can be difficult. It is more effective to approach the market through local business partners (agents and distributors). They will have the ability to distribute and provide locally-based technical and language support.
Appointing a local agent or distributor is therefore the most common method. You should look closely at their:
local business reputation
DIT’s trade specialists at the British Office Taipei can help you identify local representatives for your products in Taiwan. See: https://www.gov.uk/overseas-customers-export-opportunities.
If you want to establish a business relationship that goes beyond exporting, you will need to carry out further research. A thorough evaluation of your potential partner may be time consuming and expensive, but doing so will greatly reduce the risk of serious problems in the future.
Online selling to Taiwan (e-commerce)
E-commerce in Taiwan is a multi-billion Dollar industry. Taiwan’s e-commerce penetration rate is one of the highest in the world, with a large market of sophisticated consumers familiar with global trends.
E-commerce legislation is continually being updated and amended in Taiwan, so you should contact the DIT team at the British Office Taipei for the latest detail, and lists of local tax advisers and lawyers.
Find out about DIT’s E-Exporting Programme at: https://www.gov.uk/guidance/e-exporting, which can help you export your products to Taiwan.
Check out online marketplaces in Taiwan at: https://selling-online-overseas.export.great.gov.uk/, where DIT has negotiated listings at better-than-commercial rates.
Franchising is also an increasingly popular option. However, local competition is strong and considerable support from the UK may be needed to ensure success.
Shared joint-venture partnerships, master franchisees and regionally-based conglomerates are not uncommon, and there are no specific laws that regulate franchising in Taiwan, and IP regulations are the same for both domestic and foreign companies.
It is recommended you use a reliable professional service provider for advice on the structure and implementation of a franchising agreement.
Visit the international section of the British Franchise Association at: http://www.thebfa.org/international for more information on franchising.
Contact the DIT team at the British Office Taipei at: https://www.gov.uk/world/organisations/department-for-international-trade-taiwan#contact-us for help in finding partners, distributors and tax advisers before entering into agreements, as the tax and legal obligations of each business structure can differ.
Consult local lawyers and translators to avoid costly mistakes and ensure you start out in the way that is best suited to your sector of activity. See: https://www.gov.uk/government/publications/taiwan-list-of-lawyers.
You should conduct due diligence checks once you have chosen your method of entry into the market.
Getting finance to fulfil an export contract
Globally, Taiwan ranks 90th out of 190 economies, in the World Bank’s “Doing Business – Ease of Getting Credit” report 2018. See: http://www.doingbusiness.org/data/exploreeconomies/taiwan-china.
To make it easier to fulfil an export contract and grow your business, schemes are available to UK companies selling products and services to Taiwan. Contact your bank or specialist financial organisation for assistance.
UK Export Finance (UKEF) has significant risk capacity to support exports to Taiwan, see: https://www.gov.uk/guidance/country-cover-policy-and-indicators#taiwan. Contact one of UKEF’s export finance advisers at: https://www.gov.uk/government/publications/find-an-export-finance-manager for free and impartial advice on your finance options.
You may wish to talk to a specialist about finance, including how to get paid in Taiwan. This could be a bank, an accountant or you can contact the DIT team at the British Office Taipei at: https://www.gov.uk/world/organisations/department-for-international-trade-taiwan#contact-us to help you find a local financial adviser.
Your contract will specify the terms for payment. If there is any dispute you will need to go through the Taiwanese legal system for resolution.
UKEF helps UK companies to get paid by insuring against buyer default.
You may have difficulty accessing foreign exchange. Be confident you will get paid for your export contract. Speak to one of UKEF’s export finance advisers at: https://www.gov.uk/government/publications/find-an-export-finance-manager for free and impartial advice on your insurance options or contact one of UKEF’s approved export insurance brokers at: https://www.gov.uk/government/publications/uk-export-finance-insurance-list-of-approved-brokers/export-insurance-approved-brokers.
Currency risks when exporting
If you have not fixed your exchange rate you have not fixed your price.
You should consider whether the best option for you is to agree terms in Sterling, US Dollars, RMB or New Taiwan Dollars in any contract. You should also consider getting expert financial advice on exchange rates (sometimes called FX).
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