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In response to the challenges of global warming, extreme weather, and other changes in the environment, promoting sustainable development has become a key issue in international initiatives and national policies and a main issue in industrial development. Taiwan has included the circular economy as one of the key innovative industries and has attracted many foreign companies: to invest in resource recycling and reuse in Taiwan. It has also established circular economy demonstration sites and will use the domestic market as the foundations for attracting foreign companies for investment and collaboration in Taiwan to enhance the circular economy industry chain.


  • Taiwan is an ideal place for energy and resource integration technologies and waste recycling

  • Taiwan spares no effort in promoting resource integration at industrial parks

  • Taiwan is a vital global base for the research, development and manufacturing of optoelectronics and semiconductors

  • Taiwan’s intellectual property framework is in line with international standards

  • The government is promoting green production processes and introducing smart manufacturing for the development of environmentally-friendly, safe, and high value-added products and high-value new materials, and is developing new environmentally-friendly and low-carbon materials. The government welcomes international companies to engage in investments, cooperation, technology transfers, or joint development in Taiwan to develop the new materials market in the Asia-Pacific region.

  • According to the "National Recycling Zone Pilot Program and New Material Recycling Industrial Park Application and Establishment Plan," the government has identified the establishment of "circular industrial parks" as an important long-term task. It provides international companies with brand new development zones for the development of green and high-value materials.

  • Taiwan is an important global hub for the export of high-tech parts and components, and the production processes yield large quantities of high-tech by-products each year. The conditions for investment in Taiwan are favorable to international businesses with technologies for resource refining and reuse. For example, the stay-at-home economy created by the COVID-19 pandemic increased the output of Taiwan's panel industries to NT$727.5 billion in 2020 which ranked second in the world. In response to the green regulations imposed by the EU for the manufacturing sector, Taiwan's flat-panel industry actively introduced green product, green production, and green supply chain regulations and formed alliances with supply chain partners to create a circular value ecosystem.

Focus of Policy

  • Circular Economy Promotion Plan
    The Plan integrates resources from different government agencies with the aim of incorporating the concepts of the circular economy and sustainable innovation into all kinds of economic activities. Specifically, the government has adopted four major implementation strategies for the two major goals of "circular industry" and "industry circles". They include the "promotion of circular technologies and material innovation," "creation of a new circular economy demonstration park," "promotion of green consumption and exchanges," and "integration of energy resource integration and promotion of industrial symbiosis."
    The plan is designed to help key industries (e.g., metallurgy, petrochemicals, and other materials industries) develop innovative material technologies and increase the value of renewable resources. It will also tap into the capabilities of industry, government, academia, and research institutions to implement a new circular economy demonstration park, and to share the experience that the government has accumulated in the process of integrating resources and planning for the implementation of its strategies.

  • Establishment of Taiwan Circular Economy 100 (TCE100)
    The "Taiwan Circular Economy 100" (TCE100) was established in 2019. As of July 2021, 245 industrial firms, government agencies, academic entities, and research institutions have joined TCE100. Events such as seminars and forums are organized to facilitate the exchange of ideas between members and frequent visits to industry trade associations have been organized so the government can better understand the problems faced by industry and use them as reference for policymaking.

Tax Incentives

  • The profit-seeking enterprise income tax rate is 20%.
  • Up to 15% of the company's R&D expenditures may be deducted from its profit-seeking enterprise income tax for current year; or up to 10% of such expenditures may be credited over three years against the profit-seeking enterprise income tax payable by the company.
  • Royalty payments to foreign companies for imported new production technologies or products that use patents, copyrights, or other special rights owned by foreign companies is, with the approval of the Industrial Development Bureau, MOEA, exempt from the corporate income tax.
  • Imported machinery which local manufacturers cannot produce are eligible for duty-free treatment.
  • Investment in smart machinery/5G: For investments of no less than NT$1 million and no more than NT$1 billion, either "5% of investment spending deducted from profit-seeking enterprise income tax (current FY)" or "3% of investment spending deducted from profit-seeking enterprise income tax, if total spending spread over three years" may be selected, but the total amount deducted may not exceed 30% of corporate income tax that year. The applicable period is expected to be extended to December 31, 2024.
  • A company employee who has obtained stock compensation worth a combined total of less than NT$5 million and continuously held the stock while remaining in the company's employ for at least two years may choose to be taxed on the market price of the stock at either the time the stock was obtained or the time the stock is sold, whichever is lower.
  • Foreign special professionals who meet criteria are eligible for a 50% deduction of total income tax for amounts exceeding NT$3 million.
  • Companies that set up operations in export processing zones, science industrial parks, or free trade ports are eligible for exemptions on import duties, commodity tax, and business tax for the import of machinery and equipment, ingredients, fuel, materials, and semi-finished products for their own use.
  • Companies that use undistributed earnings to engage in substantive investments may exclude the amount when calculating their profit-seeking enterprise income tax.

Research and Development Subsidies



Success Stories

International Brands and Taiwanese Businesses Jointly Develop the Circular Economy Value Chain
  • Major international brands such as IKEA and Decathlon have worked with suppliers in Taiwan to establish a circular economy value chain to demonstrate the green value of their brands. For instance, IKEA plans to reduce overall carbon emissions by 80% from their 2016 level by 2030, and to implement the use of sustainable or renewable materials for all products by 2030. Decathlon plans to reduce the carbon emissions of individual products by 40% from their 2016 level by 2026.
  • Major international manufacturer Dell has successfully worked with strategic partners in Taiwan in the establishment of a green supply chain and led the IT industry in the creation of innovative collaboration models for the circular economy to significantly reduce its impact on the environment. Dell has recycled over 21.5 million pounds of closed-loop plastic materials in more than 125 product lines including computers, monitors, and servers.
  • Japanese companies JX Nippon Mining & Metals and Tanaka Precious Metals have invested in the recycling of gold, silver, and copper in Taiwan. NIPPON REFINE and World Resources Company from the United States have invested in the recycling of metals such as copper, nickel, and zinc. The RETHMANN Group from Germany operates the recycling of plastic bottles for the production of long-fiber plastic materials.
Enhancing Energy Recycling and Reuse Efficiency in Plants
  • German company Merck has three entities in Taiwan engaged in R&D and production work involving special materials, and has implemented energy conservation projects since 2006. These projects have improved the dehumidification efficiency of the company's air-conditioning system, reuse wastewater recycled from processes, and recover rainwater to continuously reduce carbon dioxide emissions and waste of water resources. In addition, Merck actively incorporated green concepts into the product and development procedures in 2020. It has developed 890 alternative green products and introduced the first green quantitative chemical analysis tool and biodegradable solvent in the industry. Merck also works with semiconductor supplier Topco Scientific Co., Ltd. to create one-stop services for green semiconductor materials and accelerate the green transformation of Taiwan's electronics industry.

Source: InvesTaiwan


Key Innovative Industries in Taiwan - Circular Economy (8.81MB)