OUTBOARD FOREIGN DIRECT INVESTMENT OF TAIWAN

General situation
According to data of Foreign Investment Agency, accumulated until March 2020 across the country, Taiwan ranked fourth in terms of newly licensed investment capital in Vietnam with 2,725 newly granted projects, total capital. invested over 32.52 billion USD. If only in the first 3 months of 2020, Taiwan ranked 6th with 36 projects newly granted and the total newly registered investment capital reached 360.57 million USD.

Taiwan's investment in Vietnam currently lags behind South Korea, Japan and Singapore, with a focus on manufacturing and processing industries, making a significant contribution to Vietnam's annual exports. Along with that, the Taiwan market also has great potential for Vietnamese businesses to exploit. Currently, Vietnamese businesses are exporting to Taiwan mobile phones, seafood, shoes, textiles, ... Taiwan also needs to import a large amount of food and customer goods to serve residents and tourists.
In the Central Region - Central Highlands, accumulated to March 2020, Taiwan has 96 investment projects with a total registered capital of US $ 565.55 million (accounting for 2.2% compared to the region).
Outboard Foreign Direct Investment of Taiwan
According to the guideline on Building the Investment Promotion Program 2020 of the Foreign Investment Agency about Situation and trends of FDI abroad into sectors and fields of some major partners of Vietnam, Taiwan still It is always rated as one of the 06 countries and territories that have an important impact on Vietnam's FDI attraction.
Taiwan's OFDI has grown rapidly from 1990 to the present, from about USD 200 million in the late 1990s to USD 11.5 billion in 2010 and reached a record USD 17.9 billion in 2016. After a sharp decline in In 2017, Taiwan's OFDI quickly recovered, up 56%, surpassing the previous record, reaching more than 18 billion USD in 2018, resulting in Taiwan having first appeared in the Top 20 countries investing outboard in the world's largest in 2018, ranked 16/20.
In recent years, the Taiwanese government has implemented a "Go South" policy to exploit Asian markets other than mainland China. Therefore, the size of Taiwan’s OFDI capital invested in China has decreased for eight consecutive years, from $ 14.6 billion in 2010 to nearly $ 8.5 billion in 2018.
In the last two years, Taiwanese enterprises have withdrawn capital from the Chinese market to invest in Central and South America. Asian countries such as India, Hong Kong and ASEAN 6 (Singapore, Thailand, Malaysia, Indonesia, Philippines and Vietnam) are also important investment locations for Taiwanese enterprises. However, since the end of 2017, the trade conflict between China and the United States has strongly influenced the investment decisions of Taiwanese enterprises, leading to a wave of capital moving out from Asia and ASEAN, except Vietnam and India. Degrees Taiwanese businesses are gradually investing in North America, especially the United States and Europe to access new technology.
In the field of investment, Taiwanese enterprises invest in the fields of manufacturing, hotels - restaurants, wholesale - retail and finance - insurance in China to take advantage of cheap labor and large markets. . Taiwan also invested in high-tech machinery manufacturing industries such as basic metal manufacturing (8%) and electronic components (21.7%). Taiwan's OFDI ratio in manufacturing industry increased rapidly from 58.8% in 2012 to 70.3% in 2018. Taiwanese enterprises are increasing investment in basic metal manufacturing sectors. Vietnam is Taiwan's largest OFDI recipient in this area with more than US $ 313 million
Taiwanese enterprises also have strengths in information technology and electronics with a variety of global brands such as HTC, Acer, Asus and MSI. Electronics and information technology accounted for 35% of Taiwan's industrial value. In the future, when demand for semiconductor and electronics manufacturing is increasing, Taiwanese enterprises will continue to increase investment abroad in this field, especially in ASEAN countries.
Overall, Taiwan's OFDI trend is determined by the following factors: (i) low labor costs; (ii) low land costs, tax incentives and other incentives; (iii) exploit the potential market and (iv) on demand and move the supply chain.