“How to Start a Business in Taiwan” made easy

Taiwan Insights recently interviewed entrepreneur Elias Ek about the rewards to be gained and the pitfalls to avoid when starting a business in Taiwan. Ek has been teaching a seminar on this topic to foreign entrepreneurs in Taiwan since 2006. Recently, he published a book, How to Start a Business in Taiwan to consolidate his wealth of knowledge.

According to Ek, who is originally from Sweden but has lived in the US, Japan and Taiwan since 1994, Taiwan is the ideal country to start a business because of its high-tech capability, high standard of living and democratic environment. Moreover, Taiwan is the best test market for companies wishing to enter the China market. “Taiwan is the perfect stepping stone if you want to do business with China. It is the most similar market, with strong cultural links, and is a great place to test new product – or your own cross-cultural business skills – before heading across the Taiwan Strait,” he said.

Ek points out other factors that make Taiwan an ideal location for starting a business, ranging from its favorable legal environment, quality workforce and its central location in the Asia-Pacific region. Also, compared to other Asian countries, Taiwan is pretty transparent, with the process of starting a business being pretty straight forward, usually taking 4-8 weeks.

During the interview, he also suggested that Taiwan ought to follow Chile’s example by marketing its startup advantages. “I would love for Taiwan to follow in the footsteps of Startup Chile (www.startupchile.org) and promote Taiwan as a place for foreigners to come and start innovative companies. The quality of life here is great, people are friendly and for certain industries like technology hardware, there’s probably no better place to develop a business anywhere on the planet” he said.

Motivation for writing the book

Ek says his motivation in writing the book stems from his desire to help foreign entrepreneurs and also to “help Taiwanese government, banks and other service providers know there are many foreign entrepreneurs in Taiwan, they deserve good services and they provide value to Taiwan.”

With years of experience and now a consulting business specializing in helping other people set up a business in Taiwan, Ek is a treasure chest of information. The book gives its readers clear steps, not only in how to go about setting up a business, but also in navigating certain immigration issues most expats face when they relocate to Taiwan.

In comparing setting a business in Taiwan with the process in other countries, Ek believes the island comes out very favorably. “I actually think Taiwan has fewer hoops than many other countries. In some countries like for example Thailand, a foreigner cannot own 100% of a company. This is a fact we should advertise? Let the world know they should come to Taiwan!”

Hurdles include visas, ARC, banking

Among Ek’s stories collected from fellow entrepreneurs include stories about the difficulty in getting an Alien Resident Certificate (ARC) or visa. “There is always a lot of griping about VISA/ARC issues but I think it is a bit unfair. Most people who are setting up a serious business would have no problem getting a visa. That being said, I was so so so relieved when I received my Permanent ARC because the 3 times I renewed my ARC before that, the lady at the immigration bureau told me ‘you have been here a long time, why don’t you go home.’” Did she really think I should fire 40 people and leave?”

Another issue that might vex expats is when they try to open a bank account and apply for a credit card. “A bigger issue has to do with banking. Often if a foreigner walks into a Taiwanese bank to apply for a credit card or other services, they are met with a blank stare and the news that ‘government regulations do not allow us to issue a credit card to foreigners.’ Well, this is untrue.” So it’s important to know this so the applicant can advocate for themselves.

Cultural difference in doing business

Along with the step by step regulations, he also offers some cultural tips and traditional norms of doing business on the island which are very useful for people new to Taiwan.

One particular difference is the preferred methods of payment used in Taiwan which is not the norm in the United States. Whereas Americans, whether they have a business or not, might prefer using their credit and debit cards, this is not the custom in Taiwan. Since “most companies in Taiwan do not have credit cards. Direct deductions, Paypal or similar modern payment methods are quite uncommon.”

When Taiwan Insights asked: what was the most surprising aspect of doing business in Taiwan, Ek related a “surprising” lesson he learned in starting his own company.  “When we started Enspyre we knew that phone answering services already were a very very popular service in other countries. In the US and UK for example there are companies that service tens of thousands of companies as their virtual secretary. So considering that we could not find any high quality providers in Taiwan, we figured we would quickly sign up many Taiwanese businesses as customers. We were completely wrong. Taiwanese bosses rarely outsource. So 11 years later, Enspyre is the biggest player in a small phone answering service industry. Fortunately we did listen to our customers and added B2B telemarketing and are now the biggest in the much bigger industry as well. The lesson here is that what works in one country doesn’t always work in another country.”

Taiwan Trade Center in San Francisco provides help

For entrepreneurs in the Bay Area who might like to learn more about doing business in Taiwan, they can also visit the Taiwan Trade Center (TTC) located in Santa Clara. As an overseas office of the Taiwan External Trade Development Council, one of its main functions is to help Taiwanese manufacturers develop new markets and also to assist Americans in investing in Taiwan. The center also maintains information binders on suppliers and manufacturers in Taiwan to help American companies with their sourcing needs.

According to Jerchin Lee, the director of the TTC, “With a wealth of high-tech companies and talented people in the Silicon Valley, Taiwan Trade Center has been successful in helping Supermicro, Neurosky, InvenSense to find partnership in recent years.” In addition, it also helped Landway, Sunwell, and Talent Basket to sign Letters of Intent with Taiwanese businesses last year. This year, the center has found matching partnerships for AFS BioOil, Peter Stathis & Virtual Studio, and Geoproteck Solar.

Since the US has been Taiwan’s most important source of foreign investment and technology, ranking first with the cumulative amount of foreign investment. In order to enhance Taiwan’s technological level, the center assists foreign entrepreneurs seeking to invest or establish a company in Taiwan, including helping them with legal issues related to visas, their search for office space and land, accounting and tax issues.

Even for Bay Area entrepreneurs considering doing business in Taiwan, it would be beneficial to pick up Ek’s book, since it is easy to read. Readers can scan the book for general information and also read different sections with more care, depending on their needs. Each chapter also includes personal stories from different entrepreneurs who have faced similar challenges and their advice. The book is not too difficult to finish, marrying the regulations, personal experiences and stories with incremental steps that the entrepreneur should take to achieve their goals.

When Taiwan Insights asked Ek to share some overall impressions, he said, “Overall my experience being an entrepreneur in Taiwan has been good. At least in the industries that I have been involved with there is little government red tape to overcome. Just pay the relatively low taxes (corporate income tax is only 17%) on time and things are good.”

For readers interested in learning more about starting a business in Taiwan or Ek’s book, please visit www.startabusinessintaiwan.tw.

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