Taipei, Oct. 15, 2012 )--Premier Sean Chen preliminarily approved yesterday (Oct. 14) the program for Taiwanese businesses returning Taiwan for investments, which calls for the provision of several major incentives for the returning Taiwanese businesses, including the provision of NT$30 billion low-interest loan by the national development fund and the increase of the ratio of foreign laborers by 15% or 20% without increase of employment stabilization fee for five years.
The decision was made during a meeting convened by Chen and attended by ranking government officials in charge, including Vice Premier Jiang Yi-hua, Yiin Chii-ming, minister of the Council for Economic Planning and Development (CEPD), Shih Yien-shiang, minister of economics, and Chang Sheng-ford, minister of finance. The meeting gave a green light to the aforementioned program, formulated by the CEPD, in principle and the CEPD will submit the program to the Executive Yuan (the Cabinet) for formal approval this week. The program will take effect in November at the earliest.
The program, the latest addition to the economic power-up plan of the Executive Yuan, will embrace six major strategies to solicit qualified Taiwanese businesses to return to Taiwan for investments, including the provision of low-interest loans by the national development fund, assistance for the solution of manpower problem, assistance for the obtaining of land information, 50% cut on imported machinery and equipment, acceleration of follow-up talks for cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA), and provision of consulting assistance.
The program will be put into practice for two years. The CEPD estimated that it can double the influx of returning Taiwanese capital to NT$100 billion a year or NT$200 billion in the two years. In addition, it can generate job vacancies for local laborers double the number of introduced foreign laborers.
The national development fund will appropriate NT$30 billion to help Taiwanese businesses secure low-interest loans via interest subsidy, while the Small and Medium Enterprise Credit Guarantee Fund will guarantee over 70% of banking loans for Taiwanese businesses.
During the discussion process, the CEPD proposed to provide Taiwanese businesses 1.5 percentage points of interest subsidy but some government officials worry that interest subsidy may violate the regulation of World Trade Organization (WTO). The CEPD and the national development fund will further discussion details for the practice.
According to the program, Taiwanese-invested multinationals with R&D center or operating headquarters in Taiwan will be entitled to extra 15% for the ratio of foreign-labor employment. The ratio for foreign-labor employment can be increased by 20% for those Taiwanese businesses dedicated to the development of international brands, owing critical status in industrial chain, or focusing on the production of high value-added products. The ratio of foreign-labor employment will still be capped at 40%, though. In both cases, Taiwanese businesses don't have to pay extra employment stabilization fee for five years.
