
Foreign Direct Investment
According to UNCTAD's World Investment Report 2024, FDI flows to Taiwan reached USD 10.1 billion in 2023, almost doubling the level recorded one year earlier. At the end of the same period, the total stock of inward FDI stood at about USD 130.1 billion. Taiwan was also the 15th-largest economy in terms of outward investment in 2023, with FDI outflows totalling USD 24.7 billion (+58.5% y-o-y). Between 2020 and 2023, only 5% of Taiwan’s total outbound FDI projects were directed to China, a stark decline from the 42% observed between 2012 and 2015, and the 23% between 2016 and 2019, as reported by fDi Markets. Concurrently, Taiwanese companies amplified their investments in both India and Vietnam, which together accounted for nearly a quarter of total outbound FDI projects during the same period. As of 2023, the United States ranks as Taiwan's second-largest source of FDI, following the Netherlands. According to MOEA statistics, in 2024, 2,221 FDI projects totalling USD 7.86 billion were approved, marking a 3.85% drop in cases and a 30.18% decline in value from 2023. FDI from Mainland China reached 36 cases worth USD 297.2 million, up 20% in cases and 901% in value from 2023. From July 2009 to December 2024, Taiwan approved 1,622 Chinese investment projects totaling USD 2.89 billion.
Taiwan remains a key player in regional and global trade and investment, ranking among the world’s top 20 economies by GDP. It is central to global high-tech supply chains, driven by strong semiconductor, 5G, AI, and IoT industries, and benefits from regional economic dynamism, a population with high purchasing power, a strategic location, and the prominence of high-tech. On the other hand, structural impediments in Taiwan’s investment environment include excessive or inconsistent regulation, market influence wielded by domestic and state-owned enterprises (SOEs) across utilities, energy, postal, transportation, financial, and real estate sectors, as well as foreign ownership restrictions in sectors considered sensitive. Foreign entities have the right to establish entities, own business enterprises, and participate in all forms of remunerative activity in Taiwan, akin to local firms, unless stipulated otherwise in pertinent regulations. Notably, Taiwan imposes foreign ownership constraints in specific industries, such as a 60% limit on foreign ownership of wireless and fixed-line telecommunications firms, which includes a direct foreign investment cap of 49% in the sector. Moreover, in recent years authorities have tightened FDI screening to prevent circumvention by PRC firms and introduced its first core technology list, identifying 22 technologies across five sectors—defence, space, agriculture, semiconductors, and information security—for enhanced protection in December 2023. Taiwan has a thriving business environment: the country ranks 8th in the World Competitiveness Ranking, 4th out of 184 countries on the latest Index of Economic Freedom, and 18th globally in the IMD World Talent Ranking.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 6,053 | 5,416 | 10,189 |
FDI Stock (million USD) | 110,746 | 127,065 | 137,254 |
Number of Greenfield Investments* | 72 | 81 | 73 |
Value of Greenfield Investments (million USD) | 3,061 | 4,649 | 2,648 |
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Taiwan, China | East Asia & Pacific | United States | Germany |
Index of Transaction Transparency* | 9.0 | 5.9 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 5.0 | 5.2 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 7.0 | 6.7 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
