Survey of Taiwan business leaders (Chairs, Presidents, CEO's, MD's and GM's), of current results and forecasts for business growth, investment, and hiring status in Taiwan. Business indicators tracked for ten years with trend lines. First published on January 12, 2020

1. 0
Copyright ©2020 Independent Marketing & Research Limited
10TH ANNUAL TAIWAN
BUSINESS CLIMATE STUDY

2. Contents
Background...........................................................................................................................................2
Summary of results..............................................................................................................................3
Presidential Election Forecast and Impact: DPP and not a lot....................................................4
Summary of Key Financial Indicators with 10-year Trendlines.....................................................5
Profitability: Recovers.........................................................................................................................5
2020 Forecast for Revenues and Profits: Return to growth........................................................6
Investment Forecast for 2020: Back to positive territory ...........................................................7
Forecast for the next 5 years: Optimism returns ..........................................................................8
Some quotations concerning their 5-year outlook...........................................................................9
Employment and Human Resources Trends.................................................................................10
Forecast changes in employment: Growing, but slowing.........................................................11
Perceptions about Taiwanese Human Capital ..............................................................................12
The major risks confronting business..............................................................................................14
Impacts & Issues................................................................................................................................15
Taiwan Government(s)......................................................................................................................17
Other National Governments............................................................................................................19
Quality of Living..............................................................................................................................20
A little bit more information… .......................................................................................................22
In conclusion… ...............................................................................................................................23

3. Taiwan Business Climate Survey 2020
Background
For the last ten years, it has been our pleasure to run the Taiwan Business
Climate Survey.
Each year the study has been conducted amongst, on average, more than 200
key business leaders holding titles such as Chairman, President, CEO,
Managing Director, and General Manager.
The companies they lead are headquartered in 17 countries throughout the
world.
Collectively, these leaders employ almost 134,500 full-time equivalent
employees (FTE) throughout Taiwan (up from 126,300 in 2018). The largest
entity employs 32,000 FTE’s. The average number of FTE’s was 672 (up from
628.5 last year) and the most frequently occurring entity size had 20 FTE - the
same as last year.
To measure trends across numerous subject areas, we have consistently asked
identical questions and utilised identical answer formats.
One significant addition in this year’s study was asking business leaders for
their prediction of the outcome in the January 11th
, 2020 presidential election
and what impact, if any, that may have on their business forecasts.
The survey was conducted over a seven-week period from mid-October to
early December 2019.
We would like to sincerely thank all those who took part for their time,
insights, and comments.
We hope you find the following summary report of interest and help.
For additional information, please contact us at
gordon@independendentmarketing.com.au

4. Summary of results
The majority of business leaders correctly predicted the winner of the 2020
Presidential election – The Democratic Progressive Party (DPP) - and
consequently, the re-election of President Tsai Ing-wen. Whilst not everyone
responded to this question, of the 160 who did, more than two thirds (69%)
predicted a DPP win. Only 8% predicted a Kuomintang (KMT) win and 23%
responded that they didn’t know/couldn’t predict. Irrespective of which party
they believed would win, almost half (48%) believed that the outcome would
have no impact on their business with another 32% believing it would have a
“somewhat” or “very” positive impact.
Generally, all the financial metrics studied reflect promising signs, with a return
to pre-2018 levels.
After a significant decline experienced in 2018 (likely due to the changes in
labour costs), profitability levels appear to have recovered during 2019.
2020 forecasts for both revenues and profitability are up, and more in line with
pre-2018 levels.
Investment forecasts have shown a statistically significant increase over a year
ago (2019 was the lowest in nine years) and a return to more ‘normal’ levels.
Employment forecasts, whilst still positive, are slowing.
Most companies are still optimistic about the 5-year business outlook.
The issues that companies see as potential risks are a slowdown in either the
Taiwan and or global economy along with concerns about Taiwan’s ongoing
relationship with the People’s Republic of China (PRC).
Regulatory, governmental and political matters are identified as having the
greatest adverse influence on the Taiwan business environment.
With an otherwise stellar workforce, concerns expressed in previous studies
regarding employees lacking in creativity, innovation and initiative, persist.
In addition, the survey also addresses general ‘quality of living’ issues. Again,
whilst generally incredibly positive, we find the same concerns amongst
business leaders remain. For example, pedestrian safety at designated
crossings, continue to be of concern year after year.

5. Presidential Election Forecast and Impact: DPP and not a lot
With the elections this year, we felt it important to ask our leaders if they felt
their expected outcome would impact their business.
Those who correctly predicted a DPP win, generally see such this result as
either having no real impact on their business or indeed, a positive one.
0%
0%
0%
8%
23%
69%
New Power Party (NPP)
People First Party (PFP)
Prefer not to say
Kuomintang (KMT)
Don't Know
Democratic Progressive Party (DPP),
Presidential (and legislative) elections will be
held on January 11, 2020. Which political party
do you believe will win the Presidency?
3% 1%
18%
52%
22%
5%
Don't know Very negative Somewhat
negative
Neither
positive nor
negative
Somewhat
positive
Very positive
Perceived impact on business if DPP wins
Presidency

6. Summary of Key Financial Indicators with 10-year Trendlines
Profitability: Recovers
Following on from the financial hit to their profitability last year (from 68%
down to 54%), we see a return to higher proportions of businesses claiming
that their businesses are “relatively” or “very profitable”. Presumably, this is a
readjustment as regulations were clarified around the impact of the
implementation of the amended Taiwan Labor Standards Act (in December
2017, November 2018, and subsequent amendments during 2019).
We see the improvement in the “break-even or small profit” and “relatively
profitable” groups during 2019.
74% 72%
66% 65%
69% 67% 67% 68%
54%
64%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Profitable businesses
0%
3%
24%
53%
21%
1%
3%
24%
58%
14%
1%
3%
31%
56%
10%
0%
1%
34%
54%
11%
0%
2%
28%
56%
14%
0%
3%
29%
52%
15%
1%
3%
29%
58%
9%
1%
3%
28%
57%
11%
1%
3%
42%
47%
7%
2%
2%
32%
57%
7%
VERY LARGE LOSS
RELATIVELY LARGE
LOSS
BREAK-EVEN OR
SMALL PROFIT/LOSS
RELATIVELY
PROFITABLE
VERY PROFITABLE
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

7. 2020 Forecast for Revenues and Profits: Return to growth
We also see a return to businesses upwardly adjusting their forecasts for
revenue and profitability growth in 2020.
71%
59%
69%
63% 61%
54% 56%
52% 50%
56%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Forecast growth in Revenue & Profits

8. Investment Forecast for 2020: Back to positive territory
And forecasting an upswing in Investment, again, back to more ‘normal’ levels.
However, most companies are planning a slight increase in the level of
investment in Taiwan, over the next 12 months.
54%
43%
52%
48% 50%
43% 45% 48%
39%
51%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Forecasting Investment to increase
3%
20%
36%
38%
16%
2%
13%
41%
33%
10%
2%
6%
39%
42%
11%
1%
4%
44%
41%
7%
2%
5%
42%
40%
10%
4%
7%
44%
37%
7%
2%
5%
46%
40%
5%
4%
9%
38%
37%
11%
1%
16%
43%
34%
4%
3%
9%
35%
42%
9%
SUBSTANTIAL
DECREASE
SLIGHT DECREASE NO CHANGE SLIGHT INCREASE SUBSTANTIAL
INCREASE
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

9. Forecast for the next 5 years: Optimism returns
Most businesses (52%) continue to be optimistic about their 5-year outlook.
In recent times, all classifications in the 5-year forecast have remained
relatively unchanged.
81%
70%
56% 54%
60%
47% 49% 52% 49% 52%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
5-Year Business Outlook optimism
3%
10%
7%
52%
29%
1%
7%
22%
43%
28%
3%
16%
26%
37%
19%
4%
14%
29%
37%
17%
2%
14%
24%
42%
18%
5%
19%
29%
34%
13%
3%
16%
32%
38%
11%
4%
14%
30%
43%
10%
2%
19%
30%
37%
12%
3%
14%
31%
41%
11%
PESSIMISTIC SLIGHTLY
PESSIMISTIC
NEUTRAL SLIGHTLY
OPTIMISTIC
OPTIMISTIC
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

10. Some quotations concerning their 5-year outlook
Several comments explaining optimism (49% of responses) in their 5-year
forecast centred around the issues of USA-PRC trade wars and/or issues in
Hong Kong. For example:
“Looking for increased manufacturing activity in Taiwan due to the Sino-
American Trade war.”
“Proximity to SEA, US-China trade war and turmoil in Hong Kong benefit
Taiwan.”
“Taiwan economy benefit by US-China Trade war.”
“More Taiwanese companies are returning to Taiwan.”
“We think Taiwan will begin to attract more FDI [Foreign Direct Investment]
and start-ups and expand its own markets to rely less on China.”
At the opposite end of the spectrum from those who are pessimistic (35%)
about their 5-year business outlook:
“Increased demand in the China market and uncertainty of the political
relationship between China and Taiwan.
“Declining population, rising costs, more regulation.”
“Market and consumption are shrinking, unlikely to resume massive tourists
visit from China in the light of [predicted DPP win] election results.”
“The PRC has become very active in throwing its weight about in recent years -
- while there are some ways this could benefit Taiwan, there is the not-
insignificant chance that the PRC could do something catastrophic in light of
the power vacuum in the United States.”
“Taiwan economy is highly correlated to the global economy, given the unclear
or pessimistic outlook of the global economy, there is no reason to be
optimistic about the local market.”
Those who took a neutral (16%) outlook:
“Increase in global competition for Taiwan traditional companies offset by
potential new markets and returning Taiwanese manufacturers.”
“Taiwan is stable but no development with the current economic and political
environment.”

11. Employment and Human Resources Trends
DEFINITION: For simplicity, Full-Time Equivalent employees (FTE) are determined
by counting part-time employees as half an employee and adding them to the
number of full-time employees
The rate of growth in headcount has essentially remained unchanged from last
year’s historically low level.
1%
16%
39%
36%
7%
1%
12%
32%
48%
7%
2%
15%
32%
43%
8%
1%
13%
38%
43%
5%
3%
14%
41%
36%
5%
2%
15%
43%
36%
4%3%
17%
40%
36%
4%
Decreased
significantly
Decreased slightly No change Increased slightly Increased
significantly
Actual changes in FTE
2013
2014
2015
2016
2017
2018
2019

12. Forecast changes in employment: Growing, but slowing
FTE hiring in most companies is not expected to grow in 2020; with the
majority forecasting no or negative changes in hiring levels. However, a
sizeable proportion (42%) of entities are still planning to increase their FTE, so
the overall impact on employment should continue to be positive.
0%
8%
49%
39%
2%
2%
7%
42%
45%
4%
2%
9%
46%
37%
4%
1%
7%
49%
38%
3%
2%
13%
40%
37%
5%
2%
13%
46%
33%
5%
1%
9%
47%
37%
5%
DECREASE
SIGNIFICANTLY
DECREASE
SLIGHTLY
NO CHANGE INCREASE
SLIGHTLY
INCREASE
SIGNIFICANTLY
Forecast changes in FTE
2014 Forecast
2015 Forecast
2016 Forecast
2017 Forecast
2018 Forecast
2019 Forecast
2020 Forecast

13. Perceptions about Taiwanese Human Capital
Taiwanese employees are highly regarded for the work ethic, being team
players and loyalty.
The following table expresses the weighted index scores given on each
criterion. The higher the number the more strongly positive the sentiment.
Attribute 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Average
Hard-working 111% 111% 111% 112% 107% 112% 104% 120% 119% 129% 114%
Good team
players
84% 84% 78% Attribute first introduced in 2018 82%
Very loyal 70% 61% 64% 70% 60% 70% 52% 55% 52% 61% 62%
Extremely
well-
educated
56% 55% 67% 85% 58% 85% 57% 76% 79% 80% 70%
Highly
productive
56% 34% 55% 67% 65% 67% 47% 43% 54% 49% 54%
Easy to
develop/train
55% 50% 62% 75% 68% 75% 50% 40% 46% 49% 57%
Easy to retain 32% 29% 39% 26% 26% 26% 22% 2% -16% -14% 17%
Show a high
degree of
Emotional
Intelligence
(EQ)
13% 30% 28% 46% 21% 46% 26% 24% 26% 18% 28%
Well-rounded 13% -6% 8% 34% 18% 34% 1% 19% 11% 12% 14%

14. Where Taiwanese are perceived of needing improvement is in the
demonstration of creativity, innovation and initiative-taking.
Attribute 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Average
Show a
great deal
of
creativity
-42% -45% -39% -23% -10% -23% -17% -21% -17% -10% -25%
Innovative -34% -47% -28% -9% -22% -9%
Attribute first introduced in
2015
-25%
Show a
great deal
of initiative
-25% -55% -20% -8% -8% -8% -17% -3% 7% 3% -13%
Of 'world
class'
standard
-22% -34% -26% -15% -24% -15% -26% -20% -14% -22% -22%
Good
English
language
skills (if
required
for role
and/or
promotion)
-21% -33% -14% 2% -15% 2% -26%
Attribute first introduced
in 2014
-15%
Easy to
recruit
-16% -18% -5% 4% -27% 4% -6% -16% -11% -11% -10%

15. The major risks confronting business
Concerns about a downturn in domestic and global economic activity and the
threat of a change or the uncertainty surrounding the relationship between
Taiwan and the PRC are the major risks concerning the business leaders in this
study.
17%
20%
17%
26%
26%
21%
37%
32%
29%
32%
45%
44%
20%
21%
21%
27%
28%
20%
36%
39%
29%
30%
43%
53%
19%
21%
21%
22%
22%
24%
24%
26%
31%
31%
36%
37%
40%
48%
Economic slowdown in the PRC
Economic slowdown in the USA
USA-PRC Trade disputes
Increased governmental interference
Energy shortage in Taiwan
Increasing cost of labour (including labour insurance,etc.)
Lack of human resources
Increased domestic political unrest
Uncertainty/lack of flexibility in Taiwan's labour laws
Increased government regulation and compliance costs
Change or uncertainty in the PRC's policy towards Taiwan
Change or uncertainty in Taiwan's policy towards the PRC
Global economic slowdown
Economic slowdown in Taiwan's domestic consumption
2020 2019 2018

16. Impacts & Issues
Issues are ranked based upon the highest percentage of
businesses citing an issue as impacting their operation in
Taiwan
When asked which categories of issues have the greatest impact on their
businesses, survey respondents identified regulatory, governmental and
political matters as having the greatest influence.
Regulatory & legal
issues (e.g.,
inadequate or
outdated laws)
35%
Human capital -
costs and availability
15%
Government
policy/procedure
issues (e.g.,
international
relations)
16%
Weakening sales
23%
Political
environment
11%

17. Specifically, bureaucracy, differing rules, inadequate or out-dated laws are
consistently cited as top issues which impact businesses in Taiwan.
Ranking in year
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Governmental bureaucracy 1 2 1 1 4 3 1 3 4 2
Differences between local
and internationally accepted
standards
2 3 7 10 8 7 7 New in 2014
Inadequate/Out-dated laws 3 5 6 7 1 4 5 4 6 5
Inconsistent application of
the Rule of Law
4 7 11 6 6 5 4 New in 2014
Insufficient notice before
changes to regulations or
laws are introduced
5 12 12 10 5 8 6 6
New in
2013
Domestic protectionism 6 4 10 16 16 15 11 12 12 12
Changes in local demand 7 19 18 11 3 2 3 1 1 1
Ability to recruit appropriate
new personnel
8 1 8 9 7 6 9 5 3 4
Lack of flexibility in labour
laws
9 6 3 New in 2018
PRC-Taiwan government
relations
10 10 5 2 12 11 16 13 7 8
Lack of transparency 11 11 13 13 10 9 8 9 10 10
Changes in overseas demand 12 21 22 24 21 22 20 16 21 18
Government procurement
procedures
13 24 25 20 25 28 26 27 26 25
Increasing cost of labour
(including labour insurance,
national health insurance,
pension/retirement benefits)
14 8 9 New in 2018
Political turmoil 15 9 16 5 11 10 13 New in 2014

18. Taiwan Government(s)
Please note: When the term “Taiwan government” is used it is
generally thought to relate to the central government, but in
some circumstances, it may also encompass local governments.
For the past ten years, we have asked “What are the three top things that the
Taiwan government could do to help your entity in the next 12 months?”
Given that most of the significant issues impacting businesses are in the
Government’s arena, it is unsurprisingly that the following ranked order
results.
Issue 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Simplify government bureaucracy 1 2 2 5 1 2 2 1 1 1
Increase flexibility of labour laws 2 1 1
Resolve inadequate/out-dated laws 3 4 14 6 3 3 7
Accelerate plans to make English the
2nd official language of Taiwan
4
Remove differences between local &
internationally accepted standards
5 5 3 4 7 4 5
Negotiate and sign more bilateral
trade deals with other countries
6 20 10 17 14 18
Devise plans to stimulate local
demand
7 7 6 8 5 6 3
Improve research and development
incentives
8 6 11 11 10 15 20 8 5 9
Consistent application of the Rule of
Law
9 25 9 1 8 7 4
Reduce domestic protectionism 10 10 18 18 12 9 13

19. Issue 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Educate civil servants on
international
regulatory best practices
11 16 12
Reduce political turmoil in Taiwan 12 3 4 2 2 1 1
Devise plans to slow the
human talent 'Brain Drain'
13 13 17
Clarify labour laws 14 34 5 9
Increase direct foreign investment
incentives
15 14 26 13 11 14 10 2 2 3
Maintain reasonable and stable
energy costs
16 24 33 28 34 22 19
Liberalise the labour market 17 19 21 20 15 12 22 5 6 11
Reduce tariffs 18 9 31 37 27 24 25 12 15 14
Remove or loosen prohibitions or
restrictions on foreign investment
into Taiwan
19 17 16 22
Reduce corporate taxation further 20 18 38 32 18 20 17 4 4 4

20. Other National Governments
We also asked what other governments (from 16 countries other than Taiwan)
could do to assist their business in Taiwan, the results were:
Help establish cooperative inter-government exchanges with Taiwan
regulatory agencies
1
Continue to liaise with Taiwan on regulatory coherence
2
Negotiate and sign a trade and/or investment agreement with Taiwan 3
Support/Assist Taiwan's entry into the Regional Comprehensive Economic
Partnership (RCEP)
4
Support/assist Taiwan's entry into the Comprehensive & Progressive
Agreement for Trans-Pacific Partnership (CPTPP)
5
Send more senior government officials to visit Taiwan 6

21. Quality of Living
Business leaders consider Taiwan to be a safe, easy place to live, with nice
people and a good healthcare system.
The top benefits of living in Taiwan are:
Benefits 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
My family feels safe in
Taiwan 1 1 1 1 3 2 2 2 2 1
Taiwanese people are
extremely nice 2 2 2 3 2 1 1 1 1 2
Taiwan provides
quality
Health/Medical/Dental
services
3 3 3 4 4 4 4 4 3 4
Taiwan is an easy
country to live in 4 6 5 2 1 3 3 3 4 3
Mobile telephone
coverage is excellent 5 4 6 6 6 8 8 9 9 8
Alternative
transportation options
are usable and provide
options for driving my
car (i.e., buses, bike
lanes, taxis, trains,
sidewalks).
6 5 4 7 5 5 5 7 6 5
Internet connectivity is
excellent 7 7 9 8 10 11 17 14 8 9
Taiwan provides
adequate shopping
opportunities
8 8 7 5 7 7 6 6 7 7
Pedestrian crossing safety and banking services remain the least favourable
things about living in Taiwan.

22. Concerns 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Where there
are no traffic
lights,
pedestrian
(Zebra)
crossings are
a safe place
to cross the
road
1 1 1 1
New in 2017 – Most negative response in 10
years.
Online
banking
processing in
foreign
currencies
are easy
2 3 3 New in 2018
Banking and
other
financial
services are
excellent
3 4 2 4 2 3 3 4 6 4
Taiwan's air
quality is
good
4 2 4 3 New in 2017
Taiwan
provides an
'English-
friendly'
environment
for me and
my family
5 5 5 2 1 2 1 1 1
New
in
2012
eCommerce
services are
easy to access
and use
6 7 10 New in 2018
The sewer
system in
Taiwan works
reliably
7 9 14 15 11 10 7 5 8 7
Taiwan
provides
quality
drinking
water.
8 6 7 5 5 4 2 3 3 3

23. A little bit more information…
The respondents to this survey represent a truly diverse group of businesses
with their headquarters spread among North American, European and Asia
Pacific locations.
The business leaders surveyed are clearly focused on Taiwan; the primary
goal of most entities is to supply the Taiwan market with goods or services.
As in prior studies, this makes their comments and observations especially
pertinent to:
1) the Taiwan government at the central and local level;
2) the governments of Taiwan's major trading partners, including those in
the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (CPTPP), which Taiwan is hoping to join;
1%
1%
1%
1%
1%
1%
2%
2%
2%
3%
4%
6%
7%
7%
8%
17%
36%
Italy
Singapore
South Africa
Canada
Australia
British…
Sweden
Japan
Netherlands
Denmark
Switzerland
Hong Kong
France
U.K.
Germany
USA
Taiwan
Where global HQ located

24. 3) companies that currently, or plan to, supply goods and services to
companies that already supply the Taiwan market with goods and services;
4) trade associations both inside and outside Taiwan; and 5) scholars.
The remaining companies are primarily interested in exporting globally (11%),
throughout Asia Pacific (9%), or to other specific markets.
In conclusion…
After a tough period recently, we are seeing a welcome return to previous
levels of profitability; positive revenue and profitability forecasts; investment
and hiring; and sustained optimism. In general, the outlook for 2020 appears
bright for most businesses in Taiwan.
For more details please contact Independent Marketing & Research via
gordon@independentmarketing.com.au
1%
1%
1%
1%
2%
3%
9%
11%
71%
Export to the UK
Export to Australia
English-speaking markets
Export to the USA
Export to Greater China
Export to the E.U.
Throughout Asia Pacific
Globally
The Taiwan market
Entity’s primary goal to provide/source goods or services for: