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Taiwan's regulatory requirements governing the approval process for medicinal products are on a par with their international counterparts. In addition, Taiwan has robust R&D capabilities and biomedical talent, as well as abundant international clinical trial experience which can help foreign companies accelerate product development. Taiwan also has comprehensive ICT industrial clusters and production capacity and will become the best partner for foreign investors in the development of smart healthcare equipment and systems.

Advantages

  • Taiwan has unique industrial advantages, such as a standard of medical-care technology, outstanding medical-care system.

  • Taiwan's health insurance system and health insurance coverage are world class

  • Taiwan owns comprehensive biotech cluster

  • Taiwan government develops relevant laws and regulations to complete the legal biomedical environment

  • In addition to its complete industrial development hubs in the biomedical field, Taiwan also has abundant data accumulated from the National Health Insurance system, clinical experiences, and R&D capabilities, which will help international biotech enterprises set up R&D centers or production sites in Taiwan. The government has identified the biopharmaceutical industry as one of its core strategic industries, and supports the manufacture of reagents and the research and development of new drugs and vaccines.

  • Taiwan continues to strengthen the talents, funding, choices, intellectual property, laws, and resources for the biotechnology and pharmaceutical industry to create a comprehensive industrial eco-system. Moreover, the sound incubation mechanism and the industrial development hubs connected from north to south have made Taiwan one of the best sites for the innovation, research, and development of new drugs and medical devices. With foreign companies coming to Taiwan for investments, it will help expedite the timeline of research and development and introduction to the market of new products and jointly secure business opportunities for the biotechnology and pharmaceutical industry.

  • The nanovaccine and the glycoprotein vaccine have been successfully developed in Taiwan are now being tested in clinical trials. Outstanding R&D technology has enabled Taiwan to achieve great success in the treatment of influenza, enteroviruses, and liver disease, and has attracted advanced countries such as the US and others in the European Union to work with Taiwan in the development of vaccines and drugs.

  • Taiwan has outstanding capacity in production management, R&D, and rapid adjustments in response to market demand. Taiwan has become an important supplier of aids, contact lenses, and physiological testing and monitoring devices, and it also increased the production capacity of face masks, personal protective equipment, ventilators, and other disease control products during the epidemic. Foreign biotechnology and pharmaceuticals companies can make use of the ICT and other cross-sector capacity for product or system development when they invest in Taiwan.

  • As countries in the Asia-Pacific region experience demographic aging and the economies of China and various Southeast Asian countries grow stronger, the demand for basic medicine, home care, health promotion, and medication is significantly increasing, driving rapid growth of the biomedical markets in Asia. Foreign investors can make use of Taiwan's advantages such as its biotechnology and pharmaceuticals industrial base and advantageous geographical location to locate regional headquarters or R&D production sites in Taiwan.

  • In response to ongoing innovation in the biomedical industry, Taiwan continues to amend related legislation and lift restrictions on cell therapy and autologous stem cell transplantation. These measures will help foreign companies set up operations in Taiwan and expand business opportunities in advanced medical services in Asia Pacific.

Focus of Policy

  • Precision Health Strategy Development Program: The government is implementing strategies designed to build up Taiwan as a global leader in precision health and the development of high-tech solutions to epidemics. Those strategies include the following: (a) build a Taiwan Bio-Medical Data Commons; (b) develop high-precision disease prevention, diagnosis, and treatment systems; (c) develop high-precision epidemic prevention products; and (d) expand international biomedical business opportunities.
  • National Biotechnology Research Park: To accommodate the development of translational medicine research, the "Innovation Incubation Center" has been set up in the Nangang National Biotechnology Research Park. Other institutions there include the National Laboratory Animal Center (NLAC), the Development Center for Biotechnology (DCB), and the Taiwan Food and Drug Administration (TFDA). The businesses based in the Park have access to startups in the biomedical field to seek more collaborative opportunities. Resources are available in the Park to provide one-stop assistance with such matters as clinical trials, commercialization of R&D results, and information on regulatory restrictions.
  • Hsinchu Biomedical Science Park: Inside the Park are the "Biomedical Technology and Product Research and Development Center," the "Industry and Incubation Center," and the "Hsinchu Biomedical Science Park Hospital." These three major centers share R&D resources and take advantage of their proximity to the Hsinchu Science Park. Businesses based in the Park can join hands with the information and communication industry in the surroundings while engaging themselves in basic biomedical research and translational medicine research, commercialize and verify R&D results, and conduct clinical trials in the Park Hospital to shorten the time to market.
  • BioMed Commercialization Center: The Ministry of Science and Technology established the "BioMed Commercialization Center," which, by integrating related resources and strengthening the incubation momentum, can provide businesses with such services as intellectual property analysis, bridging and matching, quick trial production, and clinical regulatory consultation to help expedite commercialization of biomedical technologies and international market exploration.
  • Pingtung Agricultural Biotechnology Park: This is the first park in Taiwan that was set up specifically for the development of agricultural biotechnology. There are currently six industrial development hubs in place that focus on value-added natural products, value-added aquaculture, value-added livestock biotechnology, bioagricultural materials, energy-saving environmentally-controlled agricultural facilities, biotechnology testing, and contract manufacturing. With the services that are available in the Park (such as one-stop investor assistance, industrial talent referral, a steady supply of raw materials and supplies, startup assistance, and technical support), plus future sharing and integration of resources with the Taoyuan Agricultural Logistics Park, should help companies that are based in the Park take root in Taiwan while exploring business opportunities globally.

Tax Incentives

  • The profit-seeking enterprise income tax rate is 20%.
  • For the purpose of encouraging the incorporation or expansion of biotech and new pharmaceutical companies, investors who have invested in a biotech or new pharmaceutical company and have held the shares for more than three years are entitled to a deduction from the profit-seeking enterprise income tax payable for a period of five years starting from the year the tax liability is incurred. The amount is up to 20% of the acquisition cost of the shares.
  • Biotech and new pharmaceutical companies undertaking R&D on new drugs or technologies are entitled to a deduction from their profit-seeking enterprise income tax liability. The deduction is limited to 35% within five years from the year the tax liability is incurred. When expenditure on research and development for the current year exceeds the mean R&D budget for the preceding two years, a tax deduction of up to 50% of the excess may be taken.
  • 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 Bureau, 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: 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.
  • For the purpose of encouraging high-ranking professionals of biotechnology and new pharmaceutical companies or technology investors to hold shares, the investors will be exempted from comprehensive tax or profit-seeking enterprise income tax liability for the current year. Investors are entitled to pay taxes based on the actual trading price when the ownership of the shares is transferred. The profit is deducted from the costs of the shares.
  • Supported by a majority of the directors that attended the Board of Directors meeting and account for at least two-thirds of all directors and upon approval by the competent authority, biotechnology and pharmaceuticals companies may issue stock certificates to high-ranking professionals or technical investors. Holders of the said stock certificates in the preceding paragraph may subscribe shares in certain quantities at the price agreed upon. The subscription price may be unrestricted by Article 140 of the "Company Act" where it says that the subscription price may not be below par value. The obtained shares are subject to income tax according to the requirement in the preceding paragraph about "deductibles for income from technical shares."
  • 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.
  • As of 31 December 2021, a proposed amendment to the "Act for the Development of Biotech and New Pharmaceuticals Industry" was under deliberations at the Legislative Yuan.

Research and Development Subsidies

 

成功案例

Success Stories

Development of Clinical Trials

GSK and Novartis have come to Taiwan to set up clinical trial research centers for investigational new drugs. Merck, Pfizer, Johnson & Johnson, and MSD have also established clinical trial or related collaborative mechanisms with medical or R&D institutions in Taiwan, which help them conduct international/cross-regional clinical trials.

Creating Connections to Consolidate Capacity

GyroGear Ltd., a UK-based neuromuscular medical device company, announced a partnership with Foxconn in February 2021. Foxconn will assume responsibility for manufacture of the wearable medical device "GyroGlove" in Asia. The GyroGlove is the world's first and only wearable medical device that adopts cutting edge aerospace technology and satellite-grade mechanical gyroscopes to mechanically control trembling hands. This wearable can help persons with Parkinson's Disease and Essential Tremor to live independently.

Pursuit of Joint R&D Work and Technical Cooperation

Roche (Switzerland), Merck (Germany), and Chugai Pharmaceutical (Japan) formed a pharmaceutical alliance and signed an agreement with Taiwan's National Health Research Institutes (NHRI) and the National Biobank Consortium of Taiwan (NBCT) in March 2021 to collaborate in developing a platform for the use of Taiwanese biobanks for the development of precision treatments for cancers such as personalized cancer treatments.

 

Source: InvesTaiwan

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Key Innovative Industries in Taiwan - Biopharmacy (5.29MB)

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