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Key Industries

國防產業

  • 日期:2018-11-01
國防產業

Source: Industrial Development Bureau, MOEA
Last Updated on: 2018/08/01

 

I. Policy Focus

1. National Defense

The procurement of defense equipment, and the upgraded and renewed domestic market, will stimulate the shipbuilding, aerospace, and information industries as well as manufacturers in peripheral fields such as machinery, materials, and electrical apparatus to become involved in state-of-the-art R&D. This will achieve the goal of technological innovation and help manufacturers to grow.

2. Government-guided Development of the National Defense Industry

To facilitate collaboration among Taiwanese and international companies in the national defense industry and help companies develop the industry in Taiwan, the Ministry of National Defense has tapped into the resources of the Ministry of Economic Affairs and the Ministry of Science and Technology to promote the national defense industry.

3. Driving the Development of National Defense Industry Clusters

Aerospace industry clusters are being established in Taichung, Tainan, and the National Chung-Shan Institute of Science & Technology in Taoyuan. Naval shipbuilding clusters are being established in Kaohsiung, Pingtung, and Yilan. Information security clusters are being established in Taipei and Hsinchu.

4. Development Programs

The government is actively planning the "Program for Bolstering the National Defense Industry" and the fifth-phase national information security development program. Through the manufacturing, procurement, and upgrading of defense weaponry and equipment, these programs will drive the development of technologies and supply chains in the civilian aerospace, shipbuilding, and information security industries.

振興國防產業計畫

 

 

II. Investment Environment

1. An Aerospace Industry Chain of Considerable Scale

In 2017, the gross product of Taiwan's aerospace industry was over 3 billion USD.

2. A Supply Chain Hub for the Global Aerospace Industry

Taiwan has established itself in the global manufacturing and maintenance supply chain in the fields of engine casing, turbine blades, aircraft fasteners, composite material structures, air cargo containers, cockpit instrument panels, and the conversion of passenger airliners to cargo aircraft.

3. Diverse and Comprehensive Shipbuilding Capabilities

Taiwan's shipbuilding industry has a diverse range of commercial shipbuilding capabilities. In 2017, Taiwan ranked fourth globally in the number of superyacht orders. CSBC Corporation is the largest shipbuilder in Taiwan, with the world's fourth-largest million-ton dry dock.

4. High-quality Workforce and ICT Industry Advantages

Taiwan's information security professionals have performed exceptionally well in international information security competitions, proving that the country has capability for advanced information security work. This capability, combined with Taiwan's ICT supply chain advantages, is instrumental in developing innovative information security products and emerging services.

推升資訊安全產業拓展國際市場

 

 

III. Investment Opportunities

1. Business Opportunities in Taiwan's National Defense Industry

Based on its existing defense industry, Taiwan welcomes international research institutes, companies, and investors in the field of defense to collaborate with Taiwanese companies in developing defense products, information security software and systems, and industrial services so as to seize business opportunities in Taiwan's industrial development.

2. Business Opportunities in Taiwan's Aerospace Industry

Through its "indigenous fighter plane" program and aerospace industry development policy, Taiwan will continue to drive growth in the civil aviation industry. It is expected that within 20 years, Taiwan will establish itself as a key player in the fields of aerospace component manufacturing and aircraft maintenance in the Asia-Pacific region. Specific investment opportunities include advanced aviation manufacturing technologies and equipment, composite material technologies and equipment, maintenance, repair, and overhaul(MRO) technologies and base operation, aviation schools, unmanned aerial vehicle development and manufacturing, and innovative applications and services.

3. Business Opportunities in Taiwan's Shipbuilding Industry

The Navy and Coast Guard Administration will have a demand for 7 billion USD new vessels over the next 20 years. Combined with future demand for new submarines and offshore wind farms, with the addition of over 2 billion USD in annual production value for the shipbuilding industry, it is projected that Taiwan's business opportunities in the shipbuilding industry will exceed 3.3 billion USD annually. Specific investment opportunities include advanced nautical technologies and equipment, development and manufacturing of marine propulsion systems and components, development and manufacturing of nautical electronic systems, development and manufacturing of unmanned surface and underwater vehicles, and innovative applications and services.

4. Business Opportunities in Taiwan’s Information Security Industry

Taiwan encourages overseas and domestic companies to engage in joint-investment in developing advanced information security technologies and solutions, and to cooperate in field testing in the Internet of Things and the cloud environment (e.g. Smart Cities, critical infrastructure) to accelerate the development of information security products. It is projected that by 2020, the production value of Taiwan's information security industry will reach 1.6 billion USD.

臺灣航太、造船與資訊安全產業聚落

 

臺灣與全球航空產業商機

 

 

IV. Investment Incentives

1. Tax and Tariff Incentives

(1) Business income tax rate in Taiwan is 17%.

(2) Up to 15% of R&D expenses may be credited against the profit-seeking enterprise income tax payable by the company in the current year.

(3) Imported machinery that is not yet manufactured domestically may enjoy tariff-free treatment.

(4) Royalty payments to foreign companies for imported new production technologies or products that use patents, copyrights, or other special rights owned by foreign companies are, with the approval of the Ministry of Economic Affairs, exempt from the business income tax.

(5) For operators stationed in Export Processing Zones, Science Parks and Free Trade Zones, import duty, commodity tax, and sales tax can be exempted on imported raw materials, fuel, materials, semi-processed goods, and machinery. The business tax rate in such areas is zero on goods and services shipped abroad.

2. R&D Subsidies

(1) Global Innovation and R&D Partnership Plan: Subsidies are available for up to 50% of total spending by foreign enterprises on the establishment of R&D centers in Taiwan.

(2) Advanced Technology Research Plan: Subsidies are available for 40% to 50% of total development funding for new technologies that are not yet mature in Taiwan and that will, in the future, generate strategic products, services, or industries.

(3) Integrated R&D Plan: Subsidies are available for 40% to 50% of total project cost for the integration of key and cross-sector technologies.

(4) Industrial Upgrading and Innovation Program: For companies having R&D teams in Taiwan, subsidies are available for 40%-50% of project funding for projects that conform to government programs and up to 40% of project funding projects generated by the applicants themselves.

 

 

V. Major Foreign Investors in Taiwan

The French company Airbus provides repair service and training in cooperation with China Airlines, and the American company GE co-founded an engine repair company with Evergreen Aviation Technologies to offer services to clients in the Asia-Pacific region.

 

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