Doing Business in Taiwan
Expats are often unprepared for doing business in Taiwan. The working culture is unfamiliar to most Westerners, and achieving an adequate understanding may require some cross-cultural training.
Though the country prides itself on its capitalist success, Confucian values still permeate the business environment and dictate etiquette and common practice. Expats should familiarise themselves with this system of behaviour to better succeed in the business sphere.
Taiwan is ranked 11th out of 189 economies in the World Bank’s Ease of Doing Business Survey for 2017, ranking ahead of countries such as Australia, Canada and Germany. Taiwan scored particularly well when it comes to getting electricity (2nd), dealing with construction permits (3rd) and enforcing contracts (14th). One area of concern, however, is trading across borders, with the country placing 68th in that category.
Taiwan is largely dependent on foreign trade and the number of multinationals in the country means that locals are often accustomed to interacting with expats in the business world.
Office hours are typically 9am to 5.30pm, Monday to Friday.
Taiwanese (a southern Fujian dialect of Mandarin) and Mandarin are the official languages. English is rarely spoken outside large multinational organisations, so a translator may be necessary.
Formal and conservative with dark suits for men and modest dresses and skirts for women (pantsuits are considered casual).
Gift giving is an essential relationship-building tool. A simple gift for all members involved in a meeting is appropriate. A slightly better gift may be presented to the most important member of a party. It is customary to open gifts in private.
Taiwan is a traditionally male-dominated society and women have a diminished role in business. Nonetheless, foreign businesswomen are treated with respect.
Business culture in Taiwan
While Taiwan’s highly developed capitalist economy is marked by modern enterprise, its business culture is rooted in old-world tenets.
With the exception of a few multinationals, most businesses in Taiwan are small to medium-sized and family-owned. Senior managers assume a paternal role and not only take an interest in all activities, but expect to be consulted on each decision prior to action being taken.
Hierarchy is established, and greatly respected, although protocols are not as formal as in nearby Japan and South Korea. As a consequence, lower-level employees often lack initiative.
In accordance with Confucian principles, maintaining a sense of harmony by carefully controlling one’s interpersonal relationships is paramount. Individualism is abandoned for the collective and in many cases local work groups are a major source of identity for people.
According to this line of thought, the most important aspects of business culture in Taiwan are ‘face’ and gaunxi (relationships).
‘Face’ is a complicated concept relating to a person’s dignity, prestige and reputation. Both individuals and companies have face, and expats will find that the concept often informs both personal interactions and business decisions.
Giving face, saving face and avoiding losing face are so important that expats may find the principles that usually guide negotiation don't apply. For example, Taiwanese colleagues will avoid pointing out others' mistakes to allow them to keep face, even at a cost to the company.
Expats should abide by these principles, as causing someone to lose face will have a negative effect on business dealings.
Relationships and hierarchy
Creating and sustaining relationships are integral to doing business in Taiwan. Local enterprises rarely engage in negotiation before establishing a connection between the parties involved. Expats should take note of the practices that support this concept, like gift-giving, and should avoid fast-tracking business dealings.
Dos and don'ts of business in Taiwan
Do speak directly to the most senior person in a meeting, even if he doesn’t speak the best English
Don’t do or say anything that will embarrass or bring shame to the company. Causing a collective group to 'lose face' has a very negative impact on business relations in Taiwan.
Do accept any invitations to events outside of the normal working environment. Relationship-building is paramount, and it's important to capitalise on any and all opportunities to connect with clients and colleagues.
Don’t be afraid to depart from a meal during tea time, even if asked to stay or go somewhere else. This is a feature of all Taiwanese meals, and an appropriate time to leave.