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Investing in Taiwan

At HSBC, we have the global strength to offer you a wide range of investment opportunities. Our in depth knowledge of Taiwan makes us ideally placed to help you grow your wealth.

What you need to know

• Taiwan has received top rankings in Asia and in the world for economic competitiveness.
• Taiwan is one of Asia's largest mutual fund and banking markets.
• Taiwan's stock market sits at the top spot in the MSCI Emerging Markets (EM) Index.
  
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How we can help you

• Make your money work harder for you with our wide range of investment opportunities. More
• Manage your finances from anywhere in the world with HSBC Internet Banking. More
  
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International Resources

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Financial Environment

The 2005 World Economic Forum ranked Taiwan fifth in the world and number one in Asia for economic competitiveness. Taiwan's financial environment has strong support from Taiwan's strong economy. Taiwan is also a key portal for investment in Mainland China and Southeast Asia.

The Government of Taiwan aims to construct a financial environment of an international standard that is capable of supporting other industries. It also seeks to promote the competitiveness of the financial service sector in order to develop Taiwan into a regional financial center. The focus is to make Taiwan the region's capital-raising center and asset-management service provider. Taiwan's financial sector is increasingly becoming on par with international standards through strengthened corporate governance, the signing or information sharing agreements with foreign nations, clamping down on insider trading and market rigging, improving the penalty system for financial institutions and promoting new financial products.

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Banking

At the end of December 2005, there were 42 local banks and 36 foreign banks in the banking sector. Together they operate a comprehensive network of over 3,000 branches. Taiwan is Asia's No. 4 banking market and banks in Taiwan engage in a wide range of retail and wholesale banking business such as deposit-taking, mortgage loans, credit cards, trade financing, corporate finance, treasury activities and securities broking. Many global lenders are raising their hopes on the Taiwan market as a platform to increase their influence in China.

Foreign Exchange

Foreign Exchange administration is undertaken by the Central Bank through its Foreign Exchange Department and appointed banks. Taiwan has substantially liberalized its comprehensive system of Foreign Exchange administration. Foreign exchange transactions equivalent to NT$500,000 or more will be reported to the Central Bank by a simple declaration form completed by the person buying or selling foreign currency at the transaction bank. A single remittance of less than NT$500,000 can be transacted without completion of a declaration form.

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Securities

In mid-2005, Morgan Stanley Capital International (MSCI) raised the Limited Investability Factor (LIF) applied to the MSCI Taiwan Index from 0.75 to 1. This adjustment has raised the international standing of Taiwan's securities market and pushed Taiwan into the top spot in the MSCI Emerging Markets (EM) Index.

In general, with the exception of funds or capital sourced from mainland China or investments in the industries prohibited due to national security concerns, there are no restrictions on the industries for foreign investments. Applicable acts and regulations may, in a few instances, limit the percentage of equity holdings by foreign nationals in companies in certain industries (such as posts, telecommunications, and shipping) to meet policy needs related to national interests in the economic, social, or cultural spheres. Most developed countries have similar policies, and the practice in Taiwan is in line with FTSE developed-market standards.

At the end of December 2005, 691 companies were listed on the main board of the Taiwan Stock Exchange (TSE), with a market capitalization of TWD15.6 trillion. In 2005, TSE trading volume reached 663 billion shares with a value of TWD18.8 trillion. A wide variety of products are traded in the stock market, ranging from ordinary shares to warrants, close-end units trusts and debt securities.

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Unit Trusts

At the end of March 2007, there were 511 onshore and 719 offshore unit trusts in Taiwan with a net asset value of TWD2 trillion and TWD1.4 trillion respectively. Overall, Taiwan is estimated to become Asia's largest mutual fund market (ex-Japan) by 2008, with assets of USD213 billion, or about 31% of the Asian market. Taiwan is a natural choice for the foreign investor, not only because of its central location in the Asia region, but also for its excellent financial logistics. New regulatory frameworks are put in place to create a healthy financial environment that enhances the participation and success of both domestic and foreign financial institutions and individual investors.

* U.S. citizens, resident or anyone with the right of residence is not permitted to invest in Mutual Funds in Taiwan due to US regulations.

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Tax

The Taiwan tax system bears many similarities to that of the US and the European countries. The tax law is clearly defined, the protection for the taxpayer is dependable and the tax filing process is relatively simple and straightforward. Tax collection by the tax offices is characterized with justice and a high degree of accessibility. From a tax viewpoint, the investment environment in Taiwan is internationally competitive.

Taiwan does not collect capital gains tax. Stamp duty is applicable to many types of transactions carried out in Taiwan including share transactions. Taiwan withholding tax rate on dividends, interest and royalties payable to a non-resident is 20 percent. Various treaties provide for reduced withholding tax rates on dividends, interest, and royalties ranging from 5-15 percent.

All sales of goods and services in Taiwan, as well as all import of goods to Taiwan, are subject to business tax imposed under the VAT or non-VAT system.

For the latest tax information, please visit the website of the Taipei National Tax Administration, Ministry of Finance.

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Investment Services

Optimise your wealth potential and build a balanced investment portfolio with HSBC's wealth of investment services.

Foreign currency time deposits :

Available in 11 major currencies and various tenors, our foreign currency time deposits offer attractive interest rates to help your money grow. Available currencies include USD, EUR, AUD, CAD, CHF, GBP, HKD, NZD, SEK, SGD, and JPY.

Unit trusts†:

HSBC offers a choice of more than 300 funds with various asset classes that are managed by internationally renowned fund houses. This allows you to choose the facilities best suited to your financial goals, and to adapt your portfolio with ease, if your needs change. More

Note : For investment in overseas securities through Non-Discretionary Money Trust, the investor must by law have certain qualifications (i.e. Foreigners must have an Alien Resident Certificate (ARC)). The investor must not be a US citizen or resident and must not hold a US residence permit, nor be qualified under Rule S of the United States Securities Act of 1933.

Structured Products†:

We offer a range of advanced investment tools linked to different underlying assets such as interest rate, currency, index and stocks that provide the potential for greater return on your investment. Starting with just USD10,000, you can choose from various choices with flexible tenor ranging from 1 week to 10 years. More

Bonds†:

Generally considered a medium to long-term investment vehicle, bonds can help to provide a regular income through the interest paid on the bond during its life, as well as the possibility of capital gains. They are a good means of preserving and increasing your capital.

Note : For investment in overseas securities through Non-Discretionary Money Trust, the investor must by law have certain qualifications (i.e. Foreigners must have an Alien Resident Certificate (ARC)). The investor must not be a US citizen or resident and must not hold a US residence permit, nor be qualified under Rule S of the United States Securities Act of 1933.

Exchange Traded Funds†:

HSBC offers a wide range of ETFs based on different indexes. We can help you identify the ones that best meet your goals. More

†The price of units or shares and the income from them may go down as well as up and any past performance figures shown are not indicative of future performance.

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Financial planning

Your financial goals and expectations are as unique as you are. To achieve a financial plan based on your risk profile and investment horizon, we can help you establish a portfolio of investments and ensure it stays current and relevant to you.

Disclaimer : Investment involves risks. You should carefully consider whether any investment products or services are appropriate for you in view of your investment experience, objective, financial resources, and relevant circumstances, Investors should refer to the individual product explanatory memorandum or offering document for further details and risks involved.

Nothing on the above website should be construed as an offer to sell, a solicitation of an offer to buy or a recommendation for subscription of any investment product.

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