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Information Security

As the network environment and applications gradually gain prominence, new forms of attacks have become increasingly complicated and diverse. We can no longer rely on singular protection methods to respond to these threats. As monetary losses and business reputation losses caused by information security incidents continue to increase, the tasks of increasing information security protection and seeking effective information security solutions have become matters of key importance across the globe. With a solid foundation in network communication equipment, Taiwan's information security industry has progressed from hardware to software and information security services have also achieved rapid growth.

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Advantages

Position as a global information security hub.
Comprehensive ICT industrial clusters.
Establishment of information security testing grounds.

Position as Information Security Hub Helps with Development and Testing
Diversified Industrial Application Scenarios Facilitate Expansion of Business Opportunities

Taiwan has a unique international position and therefore occupies a key position in global information security. Many hackers have honed their skills in new types of attacks or learned new methods of attacks here and we have become a veritable "cybersecurity firing range" for the world. Taiwan's experience in dealing with unique attacks, analyses of attack models, and a wealth of information security defense experience and data become valuable for the development of anti-hacking strategies by governments or solutions by information security companies.

Although information security service providers in Taiwan remain small, they are familiar with the demands of small and medium enterprises in different industries for information security protection and the root of problems because of their extensive experiences in the local market. Foreign companies can target individual industries and jointly develop innovative solutions with Taiwanese companies, and then seize opportunities on the global market.

Focus of Policy

National Strategy for Cybersecurity Development Program (2021 to 2024)
The Program sets out three major goals: "make Taiwan become the research and training hub for information security in the Asia-Pacific region," "build a proactive safeguard network," and "create a network security environment through collaboration between the public and private sectors." By achieving these goals, Taiwan can become a "smart nation" with robust security. The plan is to focus on the following four strategies: (a) "attract global talent and cultivate capacity for independent innovation and research"; (b) "promote public-private collaborative governance to enhance the resilience of critical facilities"; (c) "leverage smart and advanced technologies to actively ward off potential threats"; and (d) "build secure and smart networks to enhance civil defense." We also plan to cultivate 350 domestic and international professionals with actual experience in information security, achieve more mature information security governance (including objective indicators) at government institutions to bring this governance up to level 3, and complete 12 IoT information security inspection technology guidelines or industry standards within 4 years.
"Cyber Security is National Security" 2.0 Strategy
The government planned the establishment of a Ministry of Digital Development as well as the "Information and Communication Security Agency" to improve the protection of key infrastructure and core databases. The government has also added 9 IoT industry cybersecurity standards for devices such as IP cameras.
Information Security Industry Promotion Plan
The government uses information security test sites and information security integration service platforms to incorporate the capabilities of the information security community and white hat hackers (ethical hackers that specialize in protecting information security) to conduct information security tests, develop total solutions, and verify their effectiveness in actual cases.
The government promoted information security enhancements for smart manufacturing sites. It employed scenarios to help companies understand how to respond before, during, and after an information security incident, and it provides policy tools and support teams to help businesses introduce information security measures to enhance IoT site defense capabilities.
The government in Taiwan has made certain parts of state-run enterprises, such as the CPC Corporation, Taiwan Water Corporation, and Taipower, available for operators to conduct information security tests and attack-defense drills for key infrastructures.

Tax Incentives

The profit-seeking enterprise income tax rate is 20%.
Up to 15% of the company's R&D expenditures may be deducted from its profit-seeking enterprise income tax for current year; or up to 10% of such expenditures may be credited over three years against the profit-seeking enterprise income tax payable by the company.
Royalty payments to foreign companies for imported new production technologies or products that use patents, copyrights, or other special rights owned by foreign companies is, with the approval of the Industrial Development Administration, MOEA, exempt from the corporate income tax.
Imported machinery which local manufacturers cannot produce are eligible for duty-free treatment.
Investment in smart machinery/5G/information security: For investments of no less than NT$1 million and no more than NT$1 billion, either "5% of investment spending deducted from profit-seeking enterprise income tax (current FY)" or "3% of investment spending deducted from profit-seeking enterprise income tax, if total spending spread over three years" may be selected, but the total amount deducted may not exceed 30% of corporate income tax that year. The applicable period is expected to be extended to December 31, 2024.
A company employee who has obtained stock compensation worth a combined total of less than NT$5 million and continuously held the stock while remaining in the company's employ for at least two years may choose to be taxed on the market price of the stock at either the time the stock was obtained or the time the stock is sold, whichever is lower.
Foreign special professionals who meet criteria are eligible for a 50% deduction of total income tax for amounts exceeding NT$3 million.
Companies that set up operations in export processing zones, science industrial parks, or free trade ports are eligible for exemptions on import duties, commodity tax, and business tax for the import of machinery and equipment, ingredients, fuel, materials, and semi-finished products for their own use.
Companies that use undistributed earnings to engage in substantive investments may exclude the amount when calculating their profit-seeking enterprise income tax.

Research and Development Subsidies

Success Stories

Technology Cooperation

In 2020, Microsoft established its sixth global cloud data center in Taiwan, thus expanding partnerships, strengthening information security services, and consolidating Taiwan's position as a digital transformation hub in Asia. It has also made investments to help Taiwanese manufacturers to improve their information security technologies and capabilities.

International Cooperation

Given its robust information and communication capabilities, outstanding talent, and optimal information security industrial environment, Taiwan's information security environment has become important for the United States and Japan, and it has gradually become a preferred international partner in this field. Japan's Rakuten Group, for example, formed its information security "Tiger Team" in Taiwan in 2019. The team will work with Rakuten teams in India, Japan, Europe, and elsewhere in the future.

Cultivation of Information Security Talent

Cisco and Taiwan's Ausenior Information established the "Cisco DevNet information security talent training center" in March 2021 to train international information security talent and support information security startup industries. The Cisco DevNet platform can help companies upgrade their online hardware management to include capacity for integrating software with product development. Moving forward, the Cisco DevNet platform will develop a capacity for training persons seeking international certifications, thereby helping to expand the cultivation of information security talent.

Source: InvesTaiwan

Contact

InvesTaiwan Service Center

Email：service@invest.org.tw / Information Window for Key Innovative Industries

Add: 1F., No. 82, Aiguo E. Rd., Zhongzheng Dist., Taipei City 100031 , Taiwan(R.O.C)

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Key Innovative Industries in Taiwan - Information Security (5.09 MB)