Foreign companies preferred entry modes and common issues faced in the Taiwanese market

Abstract

Running a business in a foreign country always poses interesting problems, especially if the target market is located in a geographical area very distant from the one where we are used to operate. The higher is the distance perceived in cultural and business differences, the more difficult the challenges to be overcome are. Taiwan is one of the four Asian Dragons that developed a strong western capitalist business mentality. Despite being one of the freest economies in the world, it still presents some difficulties for foreign firms when approaching its market. Moreover, the fact that it is not recognized by most governments and United Nations members makes it a peculiar economic area. Thus, the purpose of this thesis is to discuss the foreign companies preferred entry modes and the key issues faced in the Taiwanese market. The body of this thesis is composed of three parts organized in five chapters. The first part wants to give an overview of Taiwan political and diplomatic situation. The second is addressed under Taiwanese legal perspective, focusing in particular on Taiwan Company Law along with its procedures for the establishment of a business entity, Taiwan Private International Law, which clauses and amendments are influenced by the peculiarities of Taiwanese diplomatic and cultural background, as well as the possible entry modes to the Taiwanese market. The third part instead, aims to discuss the crucial issues that challenge foreign companies and investors willing to do business in Taiwan. These key issues are mainly cause by legal restrictions, cultural differences, political frictions and natural disasters.