National investment incentive policies are a major consideration for foreign investors to invest in a country. In view of this, the government should enhance investment incentive policies to create an optimal environment that attracts more investment funding into the domestic market, thereby driving the overall economic development. Investment incentives can take the form of tax concessions, which lower tax costs for investors, or in the form such as technology research and development support, low-interest loans, and private-government joint investment to reduce corporate operational costs.

In the IMD World Competitiveness Yearbook 2021, sixty-four major global economies are ranked on the criteria of “Investment Incentives” for the sub-factor “Business Legislation” under the factor “Government Efficiency”. Singapore, where start-ups grow fast, tops the criteria ranking with an average score of 8.28.  The second to the sixth in the ranking are all European countries, respectively Ireland, the Netherlands, Switzerland, Luxembourg, and Hungary in descending order. The seventh to the tenth is shown in the graph above. 

Standing astride the intersection of the Asia Pacific, Taiwan is a favourable investment environment equipped with robust industry clusters and infrastructure, a complete supply chain from upstream to downstream, and a talented workforce. Ranked 27th on the criteria, Taiwan has moved up 20 and 7 spots respectively from the 47th and 34th in 2019 and 2020. In the Asia-Pacific region, Taiwan takes fifth place, only after Singapore (1th), Hong Kong (8th), Thailand (16th), and China (17th). Compared to other major countries in the region such as Indonesia (32th), Korea (38th), Malaysia (39th), the Philippines(47th), and Japan (50th), Taiwan is a more attractive foreign investment destination in the Asia-Pacific thanks to the island’s investment environment and incentive policies.