Doing business in Taiwan
Expats are more often than not unprepared for doing business in Taiwan. The working culture in this technologically-driven economy is unfamiliar and unconventional to most westerners, and achieving an adequate understanding demands some degree of cross-cultural training.
Though the nation prides itself on its capitalist success, Confucian values still permeate the working world 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 33rd (out of 183 economies) by the World Bank in terms of "Ease of Doing Business", and 24th in terms of "Starting a Business", positions on par with a handful of the foremost European nations.
The country is largely dependent on foreign trade and a number of ICT related multinationals have recently opened their doors in major cities; as a result, more and more locals are becoming accustomed to interacting with expats in the business world.
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 the few multinationals, most businesses in Taiwan are small to medium-sized, and family-owned. Senior managers, often heads of family, 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.
Heirarchy is thus established, and greatly respected; though not as prone to protocol as in the nearby nations of Japan and South Korea. In consequence, lower level employees often lack initiative and merely wait for orders and instructions from the boss.
Confucion principles establish that the importance of maintaining a sense of harmony by carefully controlling your interpersonal relationships is paramount. Individualism is abandoned for the collective, and in many cases, local work groups become primary sources of identity.
From this line of thought the two most important aspects of business culture in Taiwan emerge: Face and Gaunxi (relationships).
“Face” is a complicated concept that most closely means a body’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 exist as such desperate cultural priorities that expats may find other rationales that they normally assume to affect negotiations and strategy are obsolete. For instance, rather than correct others or confess to wrongdoing, the Tawainese will remain mum to keep face.
Expats should absolutely abide by these principles, as causing a body to lose face will almost certainly have a negative effect on business dealings.
Creating and sustaining relationships are integral to doing business in Taiwan. Local enterprises will 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 make efforts to avoid fast-tracking business dealings.
As the home to an astounding number of small businesses, starting a company in Taiwan is as easy as finding an empty apartment (to double as an office) and plugging in a fax machine. The formal registration prodedure takes an estimated fifteen days and requires a minimal six procedures.
No minimum investment is required, and expats can organise work permits for themselves simultaneously. The highest hurdles will relate to overcoming the language barrier and learning to work within cultural norms.
Business language: Taiwanese (a southern Fujian dialect of Mandarin) and Mandarin, English is rarely spoken outside large multinational organisations. It may be necessary to hire a translator.
Hours of Business: 9am to 5.30pm, Monday to Friday
Dress: Formal and conservative, dark suits for men and modest dresses and skirts for women (pant suits are considered casual).
Gifts: 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. Gifts are usually not opened at the time of receival.
Business cards: Should be exchanged at beginning of meetings with both hands, viewed briefly and placed on the table in front of you, and not in your pocket.
Gender equality: fully equal; but Taiwan is a traditionally male-dominated society and women tend to play only the most minimal parts in business. Nonetheless, foreign business women will be treated with respect.
Though the nation prides itself on its capitalist success, Confucian values still permeate the working world 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 33rd (out of 183 economies) by the World Bank in terms of "Ease of Doing Business", and 24th in terms of "Starting a Business", positions on par with a handful of the foremost European nations.
The country is largely dependent on foreign trade and a number of ICT related multinationals have recently opened their doors in major cities; as a result, more and more locals are becoming accustomed to interacting with expats in the business world.
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 the few multinationals, most businesses in Taiwan are small to medium-sized, and family-owned. Senior managers, often heads of family, 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.Heirarchy is thus established, and greatly respected; though not as prone to protocol as in the nearby nations of Japan and South Korea. In consequence, lower level employees often lack initiative and merely wait for orders and instructions from the boss.
Confucion principles establish that the importance of maintaining a sense of harmony by carefully controlling your interpersonal relationships is paramount. Individualism is abandoned for the collective, and in many cases, local work groups become primary sources of identity.
From this line of thought the two most important aspects of business culture in Taiwan emerge: Face and Gaunxi (relationships).
The concept of “face” in Taiwan
“Face” is a complicated concept that most closely means a body’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 exist as such desperate cultural priorities that expats may find other rationales that they normally assume to affect negotiations and strategy are obsolete. For instance, rather than correct others or confess to wrongdoing, the Tawainese will remain mum to keep face.
Expats should absolutely abide by these principles, as causing a body to lose face will almost certainly have a negative effect on business dealings.
Relationships and hierarchy in Tawain
Creating and sustaining relationships are integral to doing business in Taiwan. Local enterprises will 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 make efforts to avoid fast-tracking business dealings.
Staring a business in Taiwan
As the home to an astounding number of small businesses, starting a company in Taiwan is as easy as finding an empty apartment (to double as an office) and plugging in a fax machine. The formal registration prodedure takes an estimated fifteen days and requires a minimal six procedures.
No minimum investment is required, and expats can organise work permits for themselves simultaneously. The highest hurdles will relate to overcoming the language barrier and learning to work within cultural norms.
Steps to registering a company in Taiwan
- Search the uniqueness of company name online; reserve company name and apply for MOEA approval
- Make a company seal
- Submit a CPA audit report showing that the amount of capital invested is sufficient to cover company establishment cost
- Apply for incorporation and tax registration at the Ministry of Economic Affairs (MOEA)
- Apply for Labor Insurance, National Health Insurance and Pension Plan Report with the Bureau of Labor Insurance
- Register for retirement plan and work rules with the Council of Labor Affairs
Doing business in Taiwan: Fast Facts
Business language: Taiwanese (a southern Fujian dialect of Mandarin) and Mandarin, English is rarely spoken outside large multinational organisations. It may be necessary to hire a translator.
Hours of Business: 9am to 5.30pm, Monday to Friday
Dress: Formal and conservative, dark suits for men and modest dresses and skirts for women (pant suits are considered casual).
Gifts: 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. Gifts are usually not opened at the time of receival.
Business cards: Should be exchanged at beginning of meetings with both hands, viewed briefly and placed on the table in front of you, and not in your pocket.
Gender equality: fully equal; but Taiwan is a traditionally male-dominated society and women tend to play only the most minimal parts in business. Nonetheless, foreign business women will be treated with respect.
Do's 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 embarass 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 capitalize 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 static feature of all Taiwanses meals, and an appropriate time to leave.
