U.S. companies have shown little interest in a new Taiwanese program that makes it easier to establish trading units there. The move is designed to encourage imports.
Companies qualifying for the new Foreign Investment Approved status can enjoy a 15 percent reduction in withholding taxes. Trading companies may be wholly foreign-owned and can deal in any product. Sponsors need not have operated in Taiwan before.In the past, only companies engaged in manufacturing on the island could open trading firms, and they were restricted to dealing in products made by their manufacturing business or its affiliates. Local Chinese also had to have some ownership interest.
So far, only Ford Motor Co. of Dearborn, Mich., is known to be considering taking advantage of the change, Alistair Laband, a Price Waterhouse partner in Taiwan, told The Journal of Commerce during a visit here.
Ford officials are contemplating opening such a trading firm but there is no indication when they will make a final decision, he said.
The automaker has close ties with Taiwan's automotive sector through a subsidiary, Ford Lio Ho Motor Co., which began exporting cars to North America last year.
Mr. Laband said he believes one reason why large U.S. companies are not rushing to join the program is that their biggest headache was exchange controls, which Taiwan already has eased.
But participation in the six-month-old import growth program should increase gradually, he said, and will include smaller companies not necessarily engaged in heavy industry.
The program is a departure from past Taiwan policy, which gave priority to channeling foreign investment into manufacturing ventures.
The government is serious about the new program. It is only a question of how much Taiwan can absorb, given its population of 20 million, Mr. Laband said of the potential for imports by the country.
The government is pushing for imports of pollution-control and other types of environmental protection equipment, Mr. Laband said.
Another priority is equipment and engineering expertise for the transportation infrastructure.