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In July, 2007, the Taiwan government promulgated the “Act for the Development of Biotech and New Pharmaceuticals Industry” offering more attractive tax incentives to companies wishing to engage in biotech and new pharmaceuticals R&D. On January 18, 2017 new strategic biotech development directions were announced. In Nov. 2016, Taiwan adopted the “Biomedical Industry Innovation Promotion Program”. The program focuses on biopharmaceuticals, medical devices, and health and well-being as well as three key developmental efforts: “Development of Niche Precision Medicine,” “Development of International Grade Medical Treatment,” and “Promotion of Health and Well-being.”

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 terms of revenue, the number of manufacturers, the number of practitioners, and also imports and exports, the biotechnology industry in Taiwan has shown further growth on all fronts in 2018 compared to 2017, and the revenue in 2018 reached NT $ 344.2 billion. Among them, the revenue of medical device industry is the largest in scale, amounting to NT $ 159.2 billion, followed sequentially by the biotechnology and pharmaceuticals, the revenues were NT $ 104.7 billion and NT $ 80.3 billion ,respectively.

 

  • As the aging population increases in the Asia-Pacific region and economies such as those of China and Southeast Asian countries rise, the demand for basic medicine, home care, health promotion, and disease medication is significantly increasing, driving current rapid growth in the biotechnology and pharmaceutical market in Asia. Foreign investors, taking advantage of Taiwan's industrial foundation, its preferred geographical location, the momentum available for connecting with the international market, and the preferential taxes and R&D subsidies from the government, can utilize Taiwan as a regional headquarter or R&D production site.

  • The recently approved "Regulations Governing the Administration or Use of Specific Medical Technology-based Testing or Laboratory Medical Instruments" features the lifting of restrictions over cell therapy and autologous bone marrow mesenchymal stem cell transplantation, making Taiwan second only to Japan, allowing the use of autologous immune cells in the treatment of various types of cancer, which will help foreign investors to explore the advanced medical care markets in the Asia-Pacific region.

 

  • The supply chain for the development of Type II medical devices (including smart assistive devices, minimally invasive surgical imaging, orthopedics, dental materials, cell therapy, cranial and cardiovascular medicine and ophthalmology) in Taiwan is mature, and opportunities are actively being sought for cooperation in system integration and the development of high-end and high-value medical equipment. Foreign companies that invest in Taiwan will be able to accelerate the development and marketing of products with high quality and fair prices. Backed by Taiwan's marketing experience, they will be able to sell their products in China and other emerging markets.

 

  • In 2018, Taiwan officially entered an elderly society (the proportion of the elderly population in the total population exceeded 14%). The policy budget of the Long-term Care 2.0 also increased year by year depending on demand. In 2020, it will increase from NT $ 33.8 billion in 2019 to approximately NT $ 40 billion. Taiwan is laying a foundation for medical trials, and is adapting its policies and regulations to provide for more flexibility. These changes, combined with innovative service models from both domestic and foreign companies, will open the door to new business opportunities in the senior citizen market.

  • Taiwan’s high-quality of medical-care systems and solid ICT foundation are conducive to the establishment of infrastructure for supporting environmental systems, such as monitoring service platforms, information system services, and an integrated platform for intelligent health services.

Policy Focus

  • The industry's targets for 2025 call for a production value of more than one trillion New Taiwan Dollars, development and international marketing of 20 new drugs and introduction to the international market of 80 new medical devices, and fostering of at least 10 flagship health-service brands. The effort to achieve these targets will stimulate breakthrough growth in the production value of Taiwan's drug, medical device, and health & welfare industries, boosting annual growth of those industries from 6% now to 9% in 2025.

Investment with Government Participation

  • To accelerate the transformation and upgrading of Taiwan's industries, the National Development Fund invests up to 49% of total equity in enterprises under the 5+2 Industrial Innovation Plan - Smart Machinery, Asia Silicon Valley, Green Energy, Biomedicine, Defense, New Agriculture, and Circular Economy. The National Development Fund has allocated NT$10 billion for investment in SMEs, cultural/creative industries, strategic services, and strategic manufacturing industries, with total investment not to exceed 49%. Investment is conducted in conjunction with a professional management company.

Tax and Tariff Incentives

  • The corporate income tax rate of Taiwan is 20%.
  • Up to 15% of the company's R&D expenditures may be deducted from its corporate income tax that year.
  • Imported machinery that local-manufacturers cannot produce is eligible for duty-free treatment.
  • Royalties paid to foreign companies for new production technologies or products imported from overseas that have patent rights, trademarks, or various concessions are exempted from income tax after gaining approval from the Industrial Development Bureau, MOEA.
  • After becoming a registered shareholder of a biotechnology or pharmaceutical company for a period of three years or more, a reduction of payable corporate income tax may be enjoyed for a period of five years starting from the time that it is subject to corporate income tax, but only if is within twenty percent (20%) of the total amount of the price paid for the subscription of shares.
  • Biotech and New Pharmaceuticals Company may, for a period of five years from the time it is subject to corporate income tax, enjoy a reduction in its corporate income tax payable for up to thirty-five percent (35%) of the total funds invested in research and development ("R&D") and personnel training each year; provided, however, that if the R&D expenditure of a particular year exceeds the average R&D expenditure of the previous two years, or if the personnel training expenditure of a particular year exceeds the average personnel training expenditure of the previous two years, fifty percent (50%) of the amount in excess of the average may be used to credit against the amount of corporate income tax payable.
  • New shares issued by a Biotech and New Pharmaceuticals Company to top executives and technology investors (in return of their knowledge and technology) shall be excluded from the amount of their consolidated income or corporate income of the then current year for taxation purposes.
  • Companies that move into export processing zones, science industrial parks, and free trade zones are exempted from import tariffs on machinery and equipment, raw materials, fuel, supplies, and semi-finished products. The business tax rate is zero for exporters of goods and labor services.

R&D Subsidies

成功案例

Success Stories

CH Biotech R&D Co., Ltd.

CH Biotech is a company that focuses on the development of new agricultural biotechnology products, and specializes in the development of plant growth regulators and high efficiency trace element fertilizers. The company’s business model, which includes R&D in Taiwan, manufacturing in the US and marketing worldwide, has helped Taiwan shine in the international market.

Investments in Taiwan

CH Biotech was established in the Changhua Coastal Industrial Park in 2013. It successfully entered the CTSP Chung Hsing Park in 2016, and its global R&D center and corporate headquarters were formally opened in June 2018.

Assistance provided by InvesTaiwan

InvesTaiwan provided CH Biotech with legal advice and information regarding land for factory construction and accelerated the administrative process, which allowed for efficient and prompt investment implementation.

Clinical trials
  1. GSK and Novartis have come to Taiwan to set up clinical trial research centers for investigational new drugs in light of the preferred medical environment, quality healthcare professionals, and medical technology and equipment comparable to that in advanced countries in Europe and America. Besides, the abundant practical experiences in clinical trials as well as preferred capabilities are also the reasons why Taiwan attracts investment.
  2. Germany's Merck and the US companies Pfizer and Johnson & Johnson, among others, have also established clinical trials or related collaborative mechanisms with medical or R&D institutions in Taiwan, such as Veterans General Hospital, the China Medical University, the National Taiwan University, and the Industrial Technology and Research Institute, which is conducive to them carrying out international/cross-regional clinical trials.
Manufacturing and production

Pfizer is not only the first foreign pharmaceutical company in Taiwan, but also the largest. Its products cover the following fronts: cardiovascular disease, the urinary system, vaccines, antibiotics/antifungals/antivirals, pain, cancer, cerebral neurological system, vision care, endocrine system, smoking cessation, female health, hemophilia, immune system, gastrointestinal system, anesthesia, and antidotes.

Source: InvesTaiwan

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Key Innovative Industries in Taiwan - Biomedicine (2.44MB)

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