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What are the challenges?

Overview

Most of the world, including the UK, does not recognise Taiwan as a sovereign entity separate from China. This has led to diplomatic isolation for Taiwan – however, the continuing liberalisation of links across the Taiwan Strait means that foreign companies are increasingly choosing Taiwan, both as a market in its own right, and as a stepping stone into China.

Market access issues faced by UK companies include:

  • public construction regulations

  • the ‘Guanxi’ or ‘connections’ (social or business) element of doing business in Chinese society, which is based on mutual interest or benefit

  • sectoral challenges, including for pharmaceuticals and alcoholic beverages

Other challenges include:

  • Taiwan is about 14 hours away from the UK by plane

  • business can be impacted by typhoons between May and September

  • Taiwan is in an earthquake zone

Contact the DIT team at the British Office Taipei, at: https://www.gov.uk/world/organisations/department-for-international-trade-taiwan#contact-us for more help and advice on doing business in Taiwan.

[Source – DIT/FCO/gov.uk]

 

Business risk

As the situation can change at short notice, you should check the latest Foreign and Commonwealth Office (FCO) Overseas Business Risk information at: https://www.gov.uk/government/publications/overseas-business-risk-taiwan.

Cyber security

British companies, whatever their size, may be subject to cyber-attacks. This can impact on the bottom line thefts of money, customer data or IP – and associated damage to your reputation. As a deterrent the UK Government 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’ (https://www.gov.uk/government/publications/cyber-risk-management-a-board-level-responsibility) guidance provides 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, at: https://www.cyberaware.gov.uk/.

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 – see: https://www.cyberessentials.ncsc.gov.uk/. Companies may also wish to consider joining the Cyber Information Sharing Partnership at: https://www.ncsc.gov.uk/, which shares real-time cyber threat information.

Commercial disputes

Disagreements and disputes can occur in the business community in Taiwan, particularly involving small companies which may be perceived as vulnerable to pressure. Disputes may arise between companies or between a company and the authorities. We generally refer to such incidents as business or commercial disputes. While the majority of foreign-owned businesses in Taiwan operate successfully, commercial disputes can damage confidence and cause concern in the business community.

The DIT team in Taiwan can offer basic advice and information on the local legal system. They can offer a list of English-speaking lawyers, although the list may not always include law practices specialising in commercial disputes.

However, business disputes are primarily a matter for arbitration or the courts.

Whilst DIT in Taiwan can seek clarification from the authorities over your situation, they cannot intervene directly with the courts or the authorities in every case. Your first point of contact should be a reputable lawyer with appropriate experience and knowledge of law and business practice in Taiwan.

DIT are not qualified to offer you legal advice, nor pay your legal fees, undertake an investigation or guarantee your safety in Taiwan, nor can they arrange special treatment because you are a British citizen. They also do not provide dedicated translation services.

Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national nor resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

Taiwan was ranked 29th out of 180 markets in the latest 2017 Transparency International's Corruption Perceptions Index (CPI). Whilst there have been high-profile cases of corruption involving major contracts in Taiwan, the large majority of business transactions take place without corruption. See:  https://www.transparency.org/news/feature/corruption_perceptions_index_2017.  

Also read the information provided on the UK Government’s bribery and corruption page at: https://www.gov.uk/anti-bribery-policy.

FCO overseas business risk

If you are travelling to Taiwan for business, check the Foreign & Commonwealth Office (FCO) pages for the latest business risk advice to help you prepare for your visit: https://www.gov.uk/government/publications/overseas-business-risk-taiwan.

[Source – FCO Overseas Business Risk/gov.uk]

 

Intellectual Property (IP)

IP rights are territorial: they only give protection in the countries or markets where they are granted or registered. If you are thinking about trading internationally, then you should consider registering your IP rights in your export markets. Intellectual Property Rights continues to be a subject near the top of many companies’ agendas when they consider entering the Taiwanese market.

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 World Economic Forum’s 2017-2018 Global Competitiveness Report, Taiwan was ranked 27th out of 137 economies ranked for intellectual property protection.

The establishment of a dedicated IP Court in 2008 was widely welcomed by the business community, and seen as a step in the right direction. The Trade Secrets Act was amended in January 2013 to increase criminal penalties for trade secret misappropriation, including enhanced sanctions for cross-border secrets theft. More recently, the Patent Attorney Act was amended in January 2016. The amendment simplified administrative procedures, expanding areas of practice and introduced heavier punishment for malpractice.

The website of the Taiwanese Intellectual Property Office (TIPO) at: https://www.tipo.gov.tw/mp.asp?mp=2 contains useful information in English. According to TIPO, the average waiting time to acquire a new patent in Taiwan is 15 months.

The UK and Taiwan have regular constructive dialogues on Intellectual Property issues. On 1st 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 UK Government’s Intellectual Property page at: https://www.gov.uk/intellectual-property-an-overview.


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