Doing Business 2020 Taiwan, China Economy Profile Taiwan, China Page 1 Doing Business 2020 Taiwan, China Economy Profile of Taiwan, China Doing Business 2020 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Employing workers Flexibility in employment regulation and redundancy cost Page 2 Doing Business 2020 Taiwan, China About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of employing workers. Although Doing Business does not present rankings of economies on the employing workers indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation. These studies provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. To learn more about Doing Business please visit doingbusiness.org Page 3 Doing Business 2020 Taiwan, China Ease of Doing Business in DB RANK DB SCORE Region East Asia & Pacific Taiwan, China Income Category High income 15 Population 23,588,932 80.9 City Covered Taipei Rankings on Doing Business topics - Taiwan, China 6 9 11 21 20 21 23 39 61 104 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Topic Scores 94.4 87.1 96.3 83.9 50.0 76.0 84.3 84.9 75.1 77.1 Starting a Business (rank) 21 Getting Credit (rank) 104 Trading across Borders (rank) 61 Score of starting a business (0-100) 94.4 Score of getting credit (0-100) 50.0 Score of trading across borders (0-100) 84.9 Procedures (number) 3 Strength of legal rights index (0-12) 2 Time to export Time (days) 10 Depth of credit information index (0-8) 8 Documentary compliance (hours) 5 Cost (number) 1.9 Credit registry coverage (% of adults) 0.0 Border compliance (hours) 17 Paid-in min. capital (% of income per capita) 0.0 Credit bureau coverage (% of adults) 100.0 Cost to export Documentary compliance (USD) 84 Dealing with Construction Permits (rank) 6 Protecting Minority Investors (rank) 21 Border compliance (USD) 335 Score of dealing with construction permits (0-100) 87.1 Score of protecting minority investors (0-100) 76.0 Time to export Procedures (number) 10 Extent of disclosure index (0-10) 9.0 Documentary compliance (hours) 4 Time (days) 82 Extent of director liability index (0-10) 5.0 Border compliance (hours) 47 Cost (% of warehouse value) 0.4 Ease of shareholder suits index (0-10) 7.0 Cost to export Building quality control index (0-15) 13.0 Extent of shareholder rights index (0-6) 4.0 Documentary compliance (USD) 65 Extent of ownership and control index (0-7) 6.0 Border compliance (USD) 340 Getting Electricity (rank) 9 Extent of corporate transparency index (0-7) 7.0 Score of getting electricity (0-100) 96.3 Enforcing Contracts (rank) 11 Procedures (number) 3 Paying Taxes (rank) 39 Score of enforcing contracts (0-100) 75.1 Time (days) 22 Score of paying taxes (0-100) 84.3 Time (days) 510 Cost (% of income per capita) 37.0 Payments (number per year) 11 Cost (% of claim value) 18.3 Reliability of supply and transparency of tariff index (0-8) 7 Time (hours per year) 221 Quality of judicial processes index (0-18) 14.0 Total tax and contribution rate (% of profit) 36.8 Registering Property (rank) 20 Postfiling index (0-100) 92.2 Resolving Insolvency (rank) 23 Score of registering property (0-100) 83.9 Score of resolving insolvency (0-100) 77.1 Procedures (number) 3 Recovery rate (cents on the dollar) 82.2 Time (days) 4 Time (years) 1.9 Cost (% of property value) 6.2 Cost (% of estate) 4.0 Quality of the land administration index (0-30) 28.5 Outcome (0 as piecemeal sale and 1 as going 1 concern) Strength of insolvency framework index (0-16) 10.5 Page 4 Doing Business 2020 Taiwan, China Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate a company To make the data comparable across economies, several assumptions about the business and the (number) procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business city -Is a limited liability company (or its legal equivalent). If there is more than one type of limited • Postregistration (for example, social security registration, liability company in the economy, the limited liability form most common among domestic firms is company seal) chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office. • Obtaining approval from spouse to start a business or to leave -Operates in the economy’s largest business city. For 11 economies the data are also collected for the home to register the company the second largest business city. • Obtaining any gender specific document for company -Performs general industrial or commercial activities such as the production or sale to the public of registration and operation or national identification card goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily Time required to complete each procedure (calendar days) polluting production processes. • Does not include time spent gathering information -Does not qualify for investment incentives or any special benefits. -Is 100% domestically owned. • Each procedure starts on a separate day (2 procedures cannot -Has five business owners, none of whom is a legal entity. One business owner holds 30% of the start on the same day) company shares, two owners have 20% of shares each, and two owners have 15% of shares • Procedures fully completed online are recorded as ½ day each. -Is managed by one local director. • Procedure is considered completed once final document is -Has between 10 and 50 employees one month after the commencement of operations, all of them received domestic nationals. • No prior contact with officials -Has start-up capital of 10 times income per capita. -Has an estimated turnover of at least 100 times income per capita. Cost required to complete each procedure (% of income per -Leases the commercial plant or offices and is not a proprietor of real estate. capita) -Has an annual lease for the office space equivalent to one income per capita. • Official costs only, no bribes -Is in an office space of approximately 929 square meters (10,000 square feet). -Has a company deed that is 10 pages long. • No professional fees unless services required by law or commonly used in practice The owners: Paid-in minimum capital (% of income per capita) -Have reached the legal age of majority and are capable of making decisions as an adult. If there • Funds deposited in a bank or with third party before registration is no legal age of majority, they are assumed to be 30 years old. or up to 3 months after incorporation -Are in good health and have no criminal record. -Are married, the marriage is monogamous and registered with the authorities. -Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population. Page 5 Doing Business 2020 Taiwan, China Starting a Business - Taiwan, China Standardized Company Legal form Private Company Limited By Shares Paid-in minimum capital requirement No minimum City Covered Taipei Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Procedure – Men (number) 3 6.5 4.9 1 (2 Economies) Time – Men (days) 10 25.6 9.2 0.5 (New Zealand) Cost – Men (% of income per capita) 1.9 17.4 3.0 0.0 (2 Economies) Procedure – Women (number) 3 6.6 4.9 1 (2 Economies) Time – Women (days) 10 25.7 9.2 0.5 (New Zealand) Cost – Women (% of income per capita) 1.9 17.4 3.0 0.0 (2 Economies) Paid-in min. capital (% of income per capita) 0.0 3.5 7.6 0.0 (120 Economies) Figure – Starting a Business in Taiwan, China – Score 88.2 90.5 99.1 100.0 Procedures Time Cost Paid-in min. capital Figure – Starting a Business in Taiwan, China and comparator economies – Ranking and Score DB 2020 Starting a Business Score 0 100 98.2: Hong Kong SAR, China (Rank: 5) 94.4: Taiwan, China (Rank: 21) 93.4: Korea, Rep. (Rank: 33) 86.1: Japan (Rank: 106) 83.9: Regional Average (East Asia & Pacific) 83.3: Malaysia (Rank: 126) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2020 Taiwan, China Figure – Starting a Business in Taiwan, China – Procedure, Time and Cost Time (days) Cost (% of income per capita) 10 1.8 1.6 Cost (% of income per capita) 8 1.4 1.2 Time (days) 6 1 0.8 4 0.6 0.4 2 0.2 0 0 1 2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2020 Taiwan, China Details – Starting a Business in Taiwan, China – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Use the online platform to complete pre-registration inquiry and reservation of company 7 days TWD 150 (online pre- name, file applications for incorporation, taxation registration, labor insurance, national registration enquiry and health insurance, labor pension contributions and submission of corporate work rules reservation of company Agency : Ministry of Economic Affairs (MOEA) name) or TWD 300 (non- Entrepreneurs can search the availability of the company name online at the Company, Business online pre-registration and Limited Partnership One-Stop Service Request Website (http://onestop.nat.gov.tw). enquiry and reservation of Applications for company registration can be done online or in person at the relevant agency. For companies with a start-up capital of NT$500 million or more, the application should be submitted company name) + 0.025% to the Department of Commerce of the Ministry of Economic Affairs (MOEA). For companies with of capital (in case the a start-up capital of less than NT$500 million, it should be submitted to either the Central Region registration fee payable is Office of MOEA or the Taipei City Government. less than TWD 1,000, the registration fee shall be The review of pre-registration enquiry and reservation of company name takes 1 day, and review TWD 1,000) of application for incorporation that follows will take another 1 day. Government officials are required to review the application on the second day. At the end of the second day, (if approved) the approval shall be ready and the applicant can pick it up from MOEA. Otherwise, it is mailed to the applicant, in which case it takes up to four days to receive the confirmation. Starting December 2018, results of application can be delivered to the applicant by way of electronic transmission. Entrepreneurs may also carry out the tax registration simultaneously, as well as labor insurance application, national health insurance application and pension fund plan appropriation application in the three-in-one comprehensive application procedure. National health insurance, labor insurance, and the pension plan report can be filed with one consolidated form. All firms may apply for national health insurance regardless of the number of employees, but only companies with five or more employees may apply for labor insurance (per Article 6 of the Labor Insurance Act). Also, when the number of employees is more than 30, the company shall simultaneously declare the work rules with the Council of Labor Affairs. If everything is in order, these applications can be approved within 5-7 working days. The aforementioned applications can be completed on the Company, Business and Limited Partnership One-Stop Service Request Website. Applicants may elect to make the above applications by means of “non-online application,” including by mail or over the counter, and the review and approval time of which shall be the same as “online applications”. 2 Make a company seal 1 day TWD 450 (depending on Agency : Seal maker the number/ material used, A set of company seals is commonly prepared for registration (unless done online), and include each range from TWD 450 the name of the company and name of the chairperson of the board of directors. Such seals are to TWD 1000) also commonly used in executing contracts, bank transactions, business transactions, applications and official documents. Starting October 2018, affixing seals of the company and the responsible person on incorporation documents in hard-copy applications is no longer required by the competent authority and such seal-affixing can be replaced by signatures. 3 Submit a CPA audit report showing that the amount of capital invested can cover company 2 days TWD 5,000 - 20,000 fee establishment cost varies across firms Agency : Ministry of Economic Affairs (MOEA) In place of showing that the invested capital will cover the costs of establishing a company to the Ministry of Economic Affairs, entrepreneurs can submit a CPA audit report showing that the invested capital has been fully paid pursuant to Article 7 of Regulations Governing Certification of Capital upon Registration Applications of Companies (last amended on Nov. 11, 2018). Section 1 of Article 7 of Company Act (last amended on January 4, 2012) allows a company to attach an auditing certificate from an independent certified public accountant within 30 days after the registration of incorporation. Entrepreneurs can also submit the audit report via the One-Stop- Shop online system (http://onestop.nat.gov.tw) using electronic signature. Takes place simultaneously with previous procedure. Page 8 Doing Business 2020 Taiwan, China Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates The construction company (BuildCo): • Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest inspections business city. For 11 economies the data are also collected for the second largest business city. • Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects • Registering and selling the warehouse after its completion or engineers. BuildCo is not assumed to have any other employees who are technical or licensed Time required to complete each procedure (calendar days) experts, such as geological or topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse upon its • Does not include time spent gathering information completion. • Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule The warehouse: - Will be used for general storage activities, such as storage of books or stationery. • Procedure is considered completed once final document is received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be • No prior contact with officials located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of income per - Will have complete architectural and technical plans prepared by a licensed architect. If capita) preparation of the plans requires such steps as obtaining further documentation or getting prior • Official costs only, no bribes approvals from external agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory Building quality control index (0-15) requirements). • Quality of building regulations (0-2) The water and sewerage connections: • Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water • Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow • Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and • Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 9 Doing Business 2020 Taiwan, China Dealing with Construction Permits - Taiwan, China Standardized Warehouse Estimated value of warehouse TWD 39,590,302.50 City Covered Taipei Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Procedures (number) 10 14.8 12.7 None in 2018/19 Time (days) 82 132.3 152.3 None in 2018/19 Cost (% of warehouse value) 0.4 3.2 1.5 None in 2018/19 Building quality control index (0-15) 13.0 9.4 11.6 15.0 (6 Economies) Figure – Dealing with Construction Permits in Taiwan, China – Score 80.0 83.9 98.0 86.7 Procedures Time Cost Building quality control index Figure – Dealing with Construction Permits in Taiwan, China and comparator economies – Ranking and Score DB 2020 Dealing with Construction Permits Score 0 100 93.5: Hong Kong SAR, China (Rank: 1) 89.9: Malaysia (Rank: 2) 87.1: Taiwan, China (Rank: 6) 84.4: Korea, Rep. (Rank: 12) 83.1: Japan (Rank: 18) 70.0: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Page 10 Doing Business 2020 Taiwan, China Figure – Dealing with Construction Permits in Taiwan, China – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 0.25 80 70 Cost (% of warehouse value) 0.2 60 Time (days) 50 0.15 40 0.1 30 20 0.05 10 0 0 1 *2 3 4 5 6 7 8 9 10 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 11 Doing Business 2020 Taiwan, China Figure – Dealing with Construction Permits in Taiwan, China and comparator economies – Measure of Quality 16 15.0 14 13.0 13.0 13.0 12.0 Index score 12 10 9.4 8 6 4 2 0 Taiwan, Hong Japan Korea, Malaysia East China Kong Rep. Asia SAR, & China Pacific Details – Dealing with Construction Permits in Taiwan, China – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain information about infrastructure from the water company 3 days no charge Agency : Taiwan Water Corporation at One-Stop Counter BuildCo visits the One-Stop Counter to obtain information on the intended building site’s water and electricity infrastructure. 2 Obtain information about electricity infrastructure from electricity provider 3 days no charge Agency : Taiwan Power Company (Taipower) at One-Stop Counter Although this is not a mandatory procedures, builders usually resort to the one-stop counter to obtain information about electricity infrastructure. The information is free of charge and allows the builder to optimize resources. 3 Request and obtain building permit from the City Government at the One-Stop Counter 21 days TWD 31,402 Agency : City Government at the One-Stop Counter A One-Stop Counter was introduced in March 2011 allowing builders to obtain several approvals in one place. Before presenting an application, the applicant should carefully follow the Self Checklist of Application for Construction Permit and Review of Design for Water Supply Documents (OSC2). The applicant should then place the application form, drawings and explanations, and other important documents in proper order in a file envelope, write “Application for Building Permit and Water Supply” on the outside of the envelope, and deliver this by mail or in person to the Counter. If, due to particular case circumstances, there is a need for an application to be processed jointly with another unit, the applicant should fill out a Taipei City Government Building Permit (Design Alteration) Joint Review Form, selecting the joint processing unit and joint review item(s), and submit it once. If an application is not within the scope of the One-Stop Counter’s jurisdiction, or is one that cannot be processed due to special circumstances, the One-Stop Counter will not be able to accept it, but will assist the applicant in going through the ordinary channels. If an application is within the scope of the One-Stop Counter’s jurisdiction, the staff member that receives it will verify that the correct documents have been submitted, assign the application a case number, and submit a receipt stamp or fax a receipt stub with the fees that need to be paid. When the documents are complete, the One-Stop Counter will forward them to the relevant offices (the Construction Management Office, Bureau of High Speed Rail, Department of Rapid Transit Systems, Department of Public Works, Department of Cultural Affairs, Department of Transportation, Department of Land, Department of Urban Development, etc.) to conduct a joint review. When a joint review of an application has been conducted by the One-Stop Counter and it has been found that the application does not conform to requirements, the One-Stop Counter will notify the applicant that he has one chance to make the necessary amendments. Once all amendments have been made, a construction permit is issued, and fees for the construction permit, specification of building setback line, wastewater discharge permit, and land ownership certificate are paid. It is possible to apply for a building permit online since April 1, 2015 and the website is http://tccmoapply.dba.tcg.gov.tw:8080/tccmoapply/ Page 12 Doing Business 2020 Taiwan, China 4 Report the start date and present construction plan to the City Government at the One-Stop 1 day TWD 25,674 Counter and pay air pollution protection fee before starting construction Agency : City Government at the One-Stop Counter After BuildCo obtains the construction permit, he prepares the application for commencement of construction, a construction plan, and other required documentation and submits them to the One- Stop Counter. BuildCo then pays the air pollution protection fee and obtains approval for the commencement of work. Under the provisions of Article 4 of the Regulations Governing Construction Project Air Pollution Prevention Facilities, the case study warehouse would be classified as a Grade 2 construction. 5 Request occupancy permit, post-contruction approvals and registrations at the One-Stop 1 day TWD 79,181 Counter Agency : City Government at the One-Stop Counter Where construction is completed without involving damage to adjacent property, BuildCo can take the original construction permit to the One-Stop Counter and make a one-time submission of the Self Checklist for Post-Completion Application Documents (OSC4) and apply for an occupancy permit. The mode of submission is the same as the construction permit application. BuildCo must place the relevant application letter, application form, drawings and explanations, and other documentation required by law or by the regulations of the unit concerned into one envelope for each separate application. BuildCo must also write the type of application and the unit concerned on the envelope (e.g., “Application to the Fire Department for post-completion inspection of fire- fighting equipment.”) The One-Stop Counter will pass the application documents to the relevant units or review and processing. If the building is found to be in compliance with applicable regulations, the One-Stop Counter will approve the issuance of an occupancy permit and BuildCo must pay the applicable fees. BuildCo may choose to pick up the occupancy permit in person at the One-Stop Counter or have it mailed to him. The One-Stop Counter will also notify Taipei Water Department to carry out the water connection procedures. For the registration of a new building, Point 3 of the Supplementary Regulations on Computing and Collecting Land Registration Fees and Penalties stipulates that the registration fee is computed according to the total cost of construction as recorded in the occupancy permit. Article 84 of the Land Registration Regulations stipulates that the general land registration procedure applies to the registration of a new building; hence the applicable registration fee is 0.2% of the total cost of construction. 6 Receive final inspection 1 day no charge Agency : Relevant Agencies at One-Stop Counter As part of the review process, the relevant departments will conduct a joint final inspection. 7 Obtain occupancy permit, post-contruction approvals and registrations at the One-Stop 33 days no charge Counter Agency : City Government at One-Stop Counter Once the issuance of the occupancy permit is approved, the One-Stop Counter will transmit the documentation to apply for registration of title to the local land administration office. 8 Apply for water supply and sewerage connection from Taiwan Water Corporation 1 day no charge Agency : Taiwan Water Corporation The applicant may channel the request for water connection through the one stop counter for building permits or may request it directly from the Taiwan Water Corporation. The Review of Design for Water Supply Documents (OSC2) should by this point already be completed and a simple notification is required for the water company inspection to take place. 9 Receive water and sewerage inspections 1 day no charge Agency : Taiwan Water Corporation The Taiwan Water Corporation conducts an inspection to evaluate that all conditions have been met and match the specifications submitted in the Review of Design for Water Supply Documents (OSC2). 10 Obtain connection to water and sewerage 19 days TWD 25,000 Agency : Taiwan Water Corporation After the water and sewerage inspections are done, BuildCo received water and sewerage connections. Takes place simultaneously with previous procedure. Page 13 Doing Business 2020 Taiwan, China Details – Dealing with Construction Permits in Taiwan, China – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; Free 1.0 of charge. Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0 accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in compliance with existing Licensed architect. 1.0 building regulations? (0-1) Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections by in- 1.0 house engineer; Unscheduled inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a final inspection required by law to verify that the building was built in accordance with the approved Yes, final inspection 2.0 plans and regulations? (0-2) is done by government agency; Yes, in-house engineer submits report for final inspection. Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use Professional in 1.0 (Latent Defect Liability or Decennial Liability)? (0-1) charge of the supervision; Construction company; Owner or investor. Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or No party is required 0.0 problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) by law to obtain insurance . Professional certifications index (0-4) 4.0 What are the qualification requirements for the professional responsible for verifying that the architectural plans Minimum number of 2.0 or drawings are in compliance with existing building regulations? (0-2) years of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certification exam. Page 14 Doing Business 2020 Taiwan, China What are the qualification requirements for the professional who supervises the construction on the ground? (0- Minimum number of 2.0 2) years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certification exam. Page 15 Doing Business 2020 Taiwan, China Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection (number) To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining all necessary clearances and permits The warehouse: • Completing all required notifications and receiving all necessary - Is owned by a local entrepreneur and is used for storage of goods. inspections - Is located in the economy’s largest business city. For 11 economies the data are also collected for • Obtaining external installation works and possibly purchasing the second largest business city. material for these works - Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway. • Concluding any necessary supply contract and obtaining final - Is a new construction and is being connected to electricity for the first time. supply - Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square Time required to complete each procedure (calendar days) feet). The plot of land on which it is built is 929 square meters (10,000 square feet). • Is at least 1 calendar day The electricity connection: • Each procedure starts on a separate day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- • Does not include time spent gathering information kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW). - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution • Reflects the time spent in practice, with little follow-up and no network and is either overhead or underground, whichever is more common in the area where the prior contact with officials warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other Cost required to complete each procedure (% of income per owners’ private property because the warehouse has access to a road. capita) - Does not require work to install the internal wiring of the warehouse. This has already been • Official costs only, no bribes completed up to and including the customer’s service panel or switchboard and the meter base. • Value added tax excluded The monthly consumption: The reliability of supply and transparency of tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours • Duration and frequency of power outages (0–3) a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours • Tools to monitor power outages (0–1) (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier. - Tariffs effective in January of the current year are used for calculation of the price of electricity for • Regulatory monitoring of utilities’ performance (0–1) the warehouse. Although January has 31 days, for calculation purposes only 30 days are used. • Financial deterrents limiting outages (0–1) • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity. Page 16 Doing Business 2020 Taiwan, China Getting Electricity - Taiwan, China Standardized Connection Name of utility Taiwan Power Company Price of electricity (US cents per kWh) 11.7 City Covered Taipei Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Procedures (number) 3 4.2 4.4 3 (28 Economies) Time (days) 22 63.2 74.8 18 (3 Economies) Cost (% of income per capita) 37.0 594.6 61.0 0.0 (3 Economies) Reliability of supply and transparency of tariff index (0-8) 7 4.0 7.4 8 (26 Economies) Figure – Getting Electricity in Taiwan, China – Score 100.0 98.3 99.5 87.5 Reliability of supply and transparency of Procedures Time Cost tariff index Figure – Getting Electricity in Taiwan, China and comparator economies – Ranking and Score DB 2020 Getting Electricity Score 0 100 99.9: Korea, Rep. (Rank: 2) 99.3: Hong Kong SAR, China (Rank: 3) 99.3: Malaysia (Rank: 4) 96.3: Taiwan, China (Rank: 9) 93.2: Japan (Rank: 14) 75.1: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Figure – Getting Electricity in Taiwan, China – Procedure, Time and Cost Time (days) Cost (% of income per capita) 40 20 35 Cost (% of income per capita) 30 15 Time (days) 25 20 10 15 10 5 5 0 0 1 2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures Page 17 Doing Business 2020 Taiwan, China reflected here, see the summary below. Figure – Getting Electricity in Taiwan, China and comparator economies – Measure of Quality 9 8 8 8 8 8 7 7 Index score 6 5 4.0 4 3 2 1 0 Taiwan, Hong Japan Korea, Malaysia East China Kong Rep. Asia SAR, & China Pacific Page 18 Doing Business 2020 Taiwan, China Details – Getting Electricity in Taiwan, China – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application for connection and await completion of design 4 calendar days TWD 293,202 Agency : Taiwan Power Company (TPC) The customer fills out an application form and sends it to (or takes it to) TPC’s branch and pays the fee for connection. The following documents are required: Application form, an indoors wires diagram, and the usage license or certificate approved by authorities of building. TPC will then design the external line. Before the external connection works can start the utility has to finish the design for the works. In this case, when the customer submits an application at a TPC branch, TPC will estimate the customer's Contribution in Aid of Construction Costs. The customer can pay the fee when they apply. The Customer’s Contribution in Aid of Construction Costs includes fees for the power line design, construction, meter installation and check of the internal wiring, and labor costs. 2 Await completion of external works by TPC’s subcontractor 17 calendar days TWD 0 Agency : Taiwan Power Company (TPC) The contractor hired by the utility will complete the external connection work. All material is available in most cases. The customer doesn’t have to buy any material for the external connection works. At this stage, an excavation permit must be obtained by the utility. It is obtained from the agency of the government that is in charge of the roads. Once the permit has been issued, the utility's contractor will execute the trench excavation, installation of the cables and pavement rehabilitation. 3 Await meter installation, internal wiring inspection and electricity flow from TPC 1 calendar day TWD 0 Agency : Taiwan Power Company (TPC) The electrician who did the internal wiring submits a signed notification to the utility upon completion in which they guarantee it has been carried out according to the regulations. Then TPC will inspect the internal wiring after the external connection works are over. According to Article 32 of "The Electricity Act", the installation of user electricity devices by electricity enterprises shall comply with relevant regulations provided by the central competent authority and electricity supply may only be connected after said devices have passed inspection. For electricity equipment already installed by the user, inspection shall be carried out with the result thereof recorded at least once every three years. In the event that non-conformity is found, a time period shall be specified for the user to make rectification. Taipower inspects the internal wiring and installs the meter after the external connection works are over. If the internal wiring check is passed, the meter will be installed and the electricity will start flowing. Takes place simultaneously with previous procedure. Page 19 Doing Business 2020 Taiwan, China Details – Getting Electricity in Taiwan, China – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 7 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.3 System average interruption frequency index (SAIFI) 0.2 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes Communication of tariffs and tariff changes (0-1) 0 Are effective tariffs available online? Yes Link to the website, if available online ttp://www.taipower.com.tw /tc/page.aspx?mid=238 Are customers notified of a change in tariff ahead of the billing cycle? No Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 20 Doing Business 2020 Taiwan, China Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable property To make the data comparable across economies, several assumptions about the parties to the (number) transaction, the property and the procedures are used. • Preregistration procedures (for example, checking for liens, The parties (buyer and seller): notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). • Registration procedures in the economy's largest business city. - Are located in the periurban (that is, on the outskirts of the city but still within its official limits) • Postregistration procedures (for example, filling title with area of the economy’s largest business city. For 11 economies the data are also collected for the municipality) second largest business city. - Are 100% domestically and privately owned. Time required to complete each procedure (calendar days) - Perform general commercial activities. • Does not include time spent gathering information The property (fully owned by the seller): • Each procedure starts on a separate day - though procedures - Has a value of 50 times income per capita, which equals the sale price. that can be fully completed online are an exception to this rule - Is fully owned by the seller. • Procedure is considered completed once final document is - Has no mortgages attached and has been under the same ownership for the past 10 years. received - Is registered in the land registry or cadastre, or both, and is free of title disputes. • No prior contact with officials - Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required. Cost required to complete each procedure (% of property - Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- value) story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, • Official costs only (such as administrative fees, duties and building codes and legal requirements. The property, consisting of land and building, will be taxes). transferred in its entirety. • Value Added Tax, Capital Gains Tax and illicit payments are - Will not be subject to renovations or additional construction following the purchase. excluded - Has no trees, natural water sources, natural reserves or historical monuments of any kind. - Will not be used for special purposes, and no special permits, such as for residential use, Quality of land administration index (0-30) industrial plants, waste storage or certain types of agricultural activities, are required. - Has no occupants, and no other party holds a legal interest in it. • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 21 Doing Business 2020 Taiwan, China Registering Property - Taiwan, China Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Procedures (number) 3 5.5 4.7 1 (5 Economies) Time (days) 4 71.9 23.6 1 (2 Economies) Cost (% of property value) 6.2 4.5 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 28.5 16.2 23.2 None in 2018/19 Figure – Registering Property in Taiwan, China – Score 83.3 98.6 58.7 95.0 Procedures Time Cost Quality of the land administration index Figure – Registering Property in Taiwan, China and comparator economies – Ranking and Score DB 2020 Registering Property Score 0 100 83.9: Taiwan, China (Rank: 20) 79.5: Malaysia (Rank: 33) 76.3: Korea, Rep. (Rank: 40) 75.6: Japan (Rank: 43) 73.6: Hong Kong SAR, China (Rank: 51) 57.5: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Page 22 Doing Business 2020 Taiwan, China Figure – Registering Property in Taiwan, China – Procedure, Time and Cost Time (days) Cost (% of property value) 4 7 3.5 6 Cost (% of property value) 3 5 Time (days) 2.5 4 2 3 1.5 2 1 0.5 1 0 0 1 2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 23 Doing Business 2020 Taiwan, China Figure – Registering Property in Taiwan, China and comparator economies – Measure of Quality 35 30 28.5 27.5 27.5 25.5 26.5 Index score 25 20 16.2 15 10 5 0 Taiwan, Hong Japan Korea, Malaysia East China Kong Rep. Asia SAR, & China Pacific Details – Registering Property in Taiwan, China – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Buyer researches the property rights and encumbrances registered against the property at Less than one day, TWD 50; (TWD 10 for the the registry of titles online search and TWD 20 per Agency : Land Registry sheet of e-transcript) The buyer obtains copies of the land and building's registration from the electronic registration database. Each page costs TWD 20. 2 Buyer pays the Deed tax at the Municipality Less than one day, TWD 2,415,008.45; (6% of Agency : Municipality online standard property value The Deed tax is 6% of the standard property value, and buyer pays it at the Municipality. Seller (Deed Tax) + 0.1% Stamp pays the Land value increase tax. Duty) As a result, Taiwan government (Real-estate Valuation Committee) issues so-called "standard" valuation information of property every year for tax authorities' and tax payers' reference. After years, such government announcement of valuation becomes the reported tax base by taxpayers and acceptable by tax authorities. The real "contract price" might be ignored when filing deed tax in practice now. The standard value is always lower than market price. As of January 30 2005, the Land value increase tax (capital gains tax) is levied according to the following rates: (1) Where the net increase of the value of any land is no more than 100 percent of the original value of such land, the rate shall be 20 percent of the net increase. (2) Where the net increase of the value of any land is no more than 200 percent of the original value of such land, the rate shall be 30 percent of that part of the net increase which exceeds the original value by more than 100 percent in addition to the rate prescribed in the preceding section. (3) Where the net increase of the value of any land is no more than 300 percent of the original value of such land, the rate shall be 40 perсent of that part of the net increase which exceeds the original value by more than 200 percent in addition to the rates prescribed in the preceding section. As of October 2009, the Ministry of Finance completed the development of the Local Tax Online Filing Portal, provided for use by the public nationwide. Taiwan government spent two years planning this system, which enables the public to carry out the filing for these local taxes online at home, and speeds up the procedure for property registration. (The Local Tax Online Filing Portal website can be visited at: https://net.tax.nat.gov.tw/PLRX/Lrx200d01) 3 Registration of transfer of title at the Land Registry 3 days TWD 39,670.3; (0.1% of Agency : Land Registry property value (registration The transfer of title is registered at the Land Registry. The original ownership certificate must be fee) + TWD 80 for new returned and a new one is issued. ownership certificate) Takes place simultaneously with previous procedure. Page 24 Doing Business 2020 Taiwan, China Details – Registering Property in Taiwan, China – Measure of Quality Answer Score Quality of the land administration index (0-30) 28.5 Reliability of infrastructure index (0-8) 8.0 Type of land registration system in the economy: Title Registration System What is the institution in charge of immovable property registration? Land Office In what format are past and newly issued land records kept at the immovable property registry of the largest Computer/Fully digital 2.0 business city of the economy —in a paper format or in a computerized format (scanned or fully digital)? Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Land Office In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business Computer/Fully digital 2.0 city of the economy—in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing cadastral information Yes 1.0 (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral or mapping agency Single database 1.0 kept in a single database, in different but linked databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use the same identification Yes 1.0 number for properties? Transparency of information index (0–6) 4.5 Who is able to obtain information on land ownership at the agency in charge of immovable property registration Anyone who pays the 1.0 in the largest business city? official fee Is the list of documents that are required to complete any type of property transaction made publicly available– Yes, online 0.5 and if so, how? Link for online access: https://www.e- services.taipei.gov.tw/ hypage.exe? HYPAGE=index_01.h tm&clsid0=1&clsid1= 24&clsid2=39&cond= all&total_srv=103#sh owname_place https://land.gov.taipei/ Content_List.aspx? n=0C6C83A1A03CB F3E Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable Yes, online 0.5 property registration in the largest business city made publicly available–and if so, how? Link for online access: https://land.gov.taipei/ Content_List.aspx? n=FEFA105CCF07A8 06 http://w2.land.taipei.g ov.tw/calc/exp/r_2.as p Does the agency in charge of immovable property registration agency formally commit to deliver a legally Yes, online 0.5 binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard? Page 25 Doing Business 2020 Taiwan, China Link for online access: https://www.e- services.taipei.gov.tw/ hypage.exe? HYPAGE=index_01.h tm&clsid0=1&clsid1= 24&clsid2=39&cond= all&total_srv=115#sh owname_place https://english.land.go v.taipei/News_Conten t.aspx? n=8CE283FEF271A3 DE&sms=3EFF68CA 442E4C26&s=6B919 81900D89B94 https://land.gov.taipei/ News_Content.aspx? n=999E4D18FDCB04 F5&sms=8ECE54C6 060A1CF4&s=44C97 7F62376D8B5 Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency No 0.0 in charge of immovable property registration? Contact information: Are there publicly available official statistics tracking the number of transactions at the immovable property Yes 0.5 registration agency? Number of property transfers in the largest business city in 2018: 25760.0 Who is able to consult maps of land plots in the largest business city? Anyone who pays the 0.5 official fee Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, online 0.5 Link for online access: http://w2.land.taipei.g ov.tw/calc/exp/s_13.a sp http://www.land.moi.g ov.tw/law/chhtml/main frame.asp? LCID=305&lawname =%A4g%A6a%BD% C6%A4V%B6O%A4 %CE%AB%D8%BFv %A7%EF%A8}%AA %AB%B4%FA%B6q %B6O%A6%AC%B6 O%BC%D0%B7%C7 &lcmod=%A4%A4%B 5%D8%A5%C1%B0 %EA103%A6~5%A4 %EB8%A4%E9%A4 %BA%ACF%B3%A1 %A5x%A4%BA%A6a %A6r%B2%C410301 52777%B8%B9%A5 O%AD%D7%A5%BF %B5o%A5%AC Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and Yes, online 0.5 if so, how does it communicate the service standard? Link for online access: https://www.e- services.taipei.gov.tw/ hypage.exe? HYPAGE=form.htm& s_uid=024031 Is there a specific and independent mechanism for filing complaints about a problem that occurred at the No 0.0 cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 8.0 Are all privately held land plots in the largest business city formally registered at the immovable property Yes 2.0 registry? Page 26 Doing Business 2020 Taiwan, China Are all privately held land plots in the economy formally registered at the immovable property registry? Yes 2.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Are all privately held land plots in the economy mapped? Yes 2.0 Land dispute resolution index (0–8) 8.0 Does the law require that all property sale transactions be registered at the immovable property registry to make Yes 1.5 them opposable to third parties? Legal basis: Article 758 of Civil Code and article 4 of Regulations of the Land Registration Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Type of guarantee: State guarantee Legal basis: Article 43 and 68 of Land Act, and article 759-1 of Civil Code Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Legal basis: Article 68 and 70 of Land Act. and article 759-1 of Civil Code Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., Yes 0.5 checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Does the legal system require verification of the identity of the parties to a property transaction? Yes 0.5 If yes, who is responsible for verifying the identity of the parties? Registrar; Is there a national database to verify the accuracy of government issued identity documents? Yes 1.0 What is the Court of first instance in charge of a case involving a standard land dispute between two local Taiwan Taipei District businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located Court in the largest business city? How long does it take on average to obtain a decision from the first-instance court for such a case (without Less than a year 3.0 appeal)? Are there publicly available statistics on the number of land disputes at the economy level in the first instance Yes 0.5 court? Number of land disputes in the economy in 2018: 139098.0 Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 27 Doing Business 2020 Taiwan, China Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit • Rights of borrowers and lenders through collateral laws (0-10) information index measures rules and practices affecting the coverage, scope and accessibility of • Protection of secured creditors’ rights through bankruptcy laws credit information available through a credit registry or a credit bureau. The strength of legal rights (0-2) index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary Depth of credit information index (0–8) secured transactions system exists. Then two case scenarios, case A and case B, are used to • Scope and accessibility of credit information distributed by determine how a nonpossessory security interest is created, publicized and enforced according to credit bureaus and credit registries (0-8) the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest credit bureau In some economies the legal framework for secured transactions will allow only case A or case B as a percentage of adult population (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral. Credit registry coverage (% of adults) • Number of individuals and firms listed in credit registry as a Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: percentage of adult population - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Page 28 Doing Business 2020 Taiwan, China Getting Credit - Taiwan, China Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Strength of legal rights index (0-12) 2 7.1 6.1 12 (5 Economies) Depth of credit information index (0-8) 8 4.5 6.8 8 (53 Economies) Credit registry coverage (% of adults) 0.0 16.6 24.4 100.0 (2 Economies) Credit bureau coverage (% of adults) 100.0 23.8 66.7 100.0 (14 Economies) Figure – Getting Credit in Taiwan, China – Score 50.0 Score - Getting Credit Figure – Getting Credit in Taiwan, China and comparator economies – Ranking and Score DB 2020 Getting Credit Score 0 100 75.0: Hong Kong SAR, China (Rank: 37) 75.0: Malaysia (Rank: 37) 65.0: Korea, Rep. (Rank: 67) 58.0: Regional Average (East Asia & Pacific) 55.0: Japan (Rank: 94) 50.0: Taiwan, China (Rank: 104) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Page 29 Doing Business 2020 Taiwan, China Figure – Legal Rights in Taiwan, China and comparator economies 9 8 8 7 7.1 7 Index Score 6 5 5 5 4 3 2 2 1 0 Taiwan, Hong Japan Korea, Malaysia East China Kong Rep. Asia SAR, & China Pacific Page 30 Doing Business 2020 Taiwan, China Details – Legal Rights in Taiwan, China Strength of legal rights index (0-12) 2 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents No to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description No of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of No collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the No original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; Yes and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an No electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third No party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? No Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law No protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell Yes the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Taiwan, China and comparator economies 9 8 8 8 8 7 7 Index Score 6 6 5 4.5 4 3 2 1 0 Taiwan, Hong Japan Korea, Malaysia East China Kong Rep. Asia SAR, & China Pacific Page 31 Doing Business 2020 Taiwan, China Details – Credit Information in Taiwan, China Depth of credit information index (0-8) Credit bureau Credit registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and Yes No 1 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries Yes No 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or Yes No 1 credit registry? Can banks and financial institutions access borrowers’ credit information online Yes No 1 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help Yes No 1 banks and financial institutions assess the creditworthiness of borrowers? Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 17,096,000 0 Number of firms 581,000 0 Total 17,677,000 0 Percentage of adult population 100.0 0.0 Page 32 Doing Business 2020 Taiwan, China Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Disclosure, review, and To make the data comparable across economies, a case study uses several assumptions about approval requirements for related-party transactions the business and the transaction. • Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for The business (Buyer): prejudicial related-party transactions; Available legal - Is a publicly traded corporation listed on the economy’s most important stock exchange. remedies (damages, disgorgement of profits, disqualification - Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of from managerial position(s) for one year or more, rescission of Buyer where permitted, even if this is not specifically required by law. the transaction) - Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members. • Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and - Has not adopted bylaws or articles of association that go beyond the minimum requirements. allocation of legal expenses Does not follow codes, principles, recommendations or guidelines that are not mandatory. - Is a manufacturing company with its own distribution network. • Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder suits indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to • Extent of shareholder rights index (0-6): Shareholders’ rights Buyer’s five-member board. and role in major corporate decisions - Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-7): Governance - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s safeguards protecting shareholders from undue board control distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of and entrenchment Buyer’s assets and is higher than the market value. • Extent of corporate transparency index (0-7): Corporate - The proposed transaction is part of the company’s principal activity and is not outside the transparency on ownership stakes, compensation, audits and authority of the company. financial prospects - Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0–20): Sum of the - The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and extent of shareholders rights, extent of ownership and control directors that approved the transaction. and extent of corporate transparency indices • Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices Page 33 Doing Business 2020 Taiwan, China Protecting Minority Investors - Taiwan, China Stock exchange information Stock exchange Taiwan Stock Exchange Stock exchange URL http://www.twse.com.tw Listed firms with equity securities 761 City Covered Taipei Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Extent of disclosure index (0-10) 9.0 5.9 6.5 10 (13 Economies) Extent of director liability index (0-10) 5.0 5.2 5.3 10 (3 Economies) Ease of shareholder suits index (0-10) 7.0 6.7 7.3 10 (Djibouti) Extent of shareholder rights index (0-6) 4.0 2.0 4.7 6 (19 Economies) Extent of ownership and control index (0-7) 6.0 2.4 4.5 7 (9 Economies) Extent of corporate transparency index (0-7) 7.0 2.6 5.7 7 (13 Economies) Figure – Protecting Minority in Taiwan, China – Score 76.0 Score - Protecting Minority Investors Figure – Protecting Minority Investors in Taiwan, China and comparator economies – Ranking and Score DB 2020 Protecting Minority Investors Score 0 100 88.0: Malaysia (Rank: 2) 84.0: Hong Kong SAR, China (Rank: 7) 76.0: Taiwan, China (Rank: 21) 74.0: Korea, Rep. (Rank: 25) 64.0: Japan (Rank: 57) 49.7: Regional Average (East Asia & Pacific) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Page 34 Doing Business 2020 Taiwan, China Figure – Protecting Minority Investors in Taiwan, China and comparator economies – Measure of Quality Taiwan (China) 7 5 9 6 4 7 Hong Kong SAR, China 5 8 10 5 5 9 Japan 5 6 7 2 4 8 Korea, Rep. 6 6 8 5 4 8 Malaysia 6 9 10 6 5 8 OECD high income 5.6 5.6 6.6 4.3 4.5 7.4 East Asia & Pacific 3.1 5.1 6.4 2.9 2.4 6.3 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7) Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10) Page 35 Doing Business 2020 Taiwan, China Details – Protecting Minority Investors in Taiwan, China – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-30) Extent of disclosure index (0-10) 9.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Board of directors 2.0 excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Full disclosure of all 2.0 material facts Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Must Buyer immediately disclose the transaction to the public? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Extent of director liability index (0-10) 5.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Yes 1.0 Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2) Liable if negligent 1.0 Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2) Liable if negligent 1.0 Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1) Yes 1.0 Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1) No 0.0 Is Mr. James disqualified upon a successful claim by shareholders? (0-1) Yes 1.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of fraud 0.0 or bad faith Ease of shareholder suits index (0-10) 7.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? Yes 1.0 (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1) No 0.0 Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-20) Extent of shareholder rights index (0-6) 4.0 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders? Yes 1.0 Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new shares? Yes 1.0 Do shareholders elect and dismiss the external auditor? No 0.0 Are changes to the rights of a class of shares only possible if the holders of the affected shares approve? Yes 1.0 Extent of ownership and control index (0-7) 6.0 Page 36 Doing Business 2020 Taiwan, China Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors? No 0.0 Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the end of their term? Yes 1.0 Must the board of directors include a separate audit committee exclusively comprising board members? Yes 1.0 Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? Yes 1.0 Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Extent of corporate transparency index (0-7) 7.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and directorships in other Yes 1.0 companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda? Yes 1.0 Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Page 37 Doing Business 2020 Taiwan, China Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in 2018 (number Using a case scenario, Doing Business records taxes and mandatory contributions a medium size per year adjusted for electronic and joint filing and payment) company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of • Total number of taxes and contributions paid or withheld, filing and payments, time taken to comply with tax laws, time taken to comply with the including consumption taxes (value added tax, sales tax or requirements of postfiling processes and time waiting. goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces Time required to comply with 3 major taxes (hours per year) ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured • Collecting information, computing tax payable at all levels of government. • Preparing separate tax accounting books, if required • Completing tax return, filing with agencies The VAT refund process: - In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times • Arranging payment or withholding income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income Total tax and contribution rate (% of commercial profits) per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred • Profit or corporate income tax in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output • Social contributions, labor taxes paid by employer VAT in June 2018. • Property and property transfer taxes The corporate income tax audit process: • Dividend, capital gains, financial transactions taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, • Waste collection, vehicle, road and other taxes or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the Postfiling Index tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax • Time to comply with VAT refund (hours) liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. • Time to obtain VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 38 Doing Business 2020 Taiwan, China Paying Taxes - Taiwan, China Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Payments (number per year) 11 20.6 10.3 3 (2 Economies) Time (hours per year) 221 173.0 158.8 49 (3 Economies) Total tax and contribution rate (% of profit) 36.8 33.6 39.9 26.1 (33 Economies) Postfiling index (0-100) 92.2 56.4 86.7 None in 2018/19 Figure – Paying Taxes in Taiwan, China – Score 86.7 73.4 84.9 92.2 Payments Time Total tax and contribution rate Postfiling index Figure – Paying Taxes in Taiwan, China and comparator economies – Ranking and Score DB 2020 Paying Taxes Score 0 100 99.7: Hong Kong SAR, China (Rank: 2) 87.4: Korea, Rep. (Rank: 21) 84.3: Taiwan, China (Rank: 39) 81.6: Japan (Rank: 51) 76.0: Malaysia (Rank: 80) 73.6: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold. Page 39 Doing Business 2020 Taiwan, China Figure – Paying Taxes in Taiwan, China and comparator economies – Measure of Quality 120 98.9 95.2 93.9 100 92.2 Index score 80 51.0 56.4 60 40 20 0 Taiwan, Hong Japan Korea, Malaysia East China Kong Rep. Asia SAR, & China Pacific Page 40 Doing Business 2020 Taiwan, China Details – Paying Taxes in Taiwan, China Tax or Payments Notes on Time (hours) Statutory tax Tax base Total tax and Notes on TTCR mandatory (number) Payments rate contribution contribution rate (% of profit) Corporate 1.0 online 161.0 20% taxable profit 14.67 income tax Employer paid - 1.0 online 0.06 gross salaries 6.93 Pension contributions Employer paid - 1.0 online 27.0 various rates gross salaries 6.55 Labor insurance contributions Employer paid - 1.0 online various rates gross salaries 5.23 Mandatory health insurance contributions Taipei City house 1.0 0.03 assessed 2.87 tax building value Taipei City land 1.0 1-5.5% assessed land 0.51 value tax value Tax on interest 0.0 0.1 interest income 0.26 not included Vehicle license 1.0 online TWD 11,700 fixed fee 0.03 tax Value added tax 1.0 online 33.0 0.05 value added 0.00 not included (VAT) Employee paid - 0.0 online and jointly various rates gross salaries 0.00 withheld Labor insurance contributions Employee paid - 0.0 online and jointly various rates gross salaries 0.00 withheld Mandatory health insurance contributions Fuel tax 1.0 online various rates engine size 0.00 small amount Land value 1.0 various rates gain 0.00 small amount increment tax Stamp duty on 1.0 0.001 transaction value 0.00 small amount contracts Totals 11 221 36.8 Page 41 Doing Business 2020 Taiwan, China Details – Paying Taxes in Taiwan, China – Tax by Type Taxes by type Answer Profit tax (% of profit) 14.7 Labor tax and contributions (% of profit) 18.7 Other taxes (% of profit) 3.4 Page 42 Doing Business 2020 Taiwan, China Details – Paying Taxes in Taiwan, China – Measure of Quality Answer Score Postfiling index (0-100) 92.2 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 0% - 24% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 3.0 94.0 Time to obtain VAT refund (weeks) 11.0 84.0 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax correction (hours) 6.5 90.8 Time to complete a corporate income tax correction (weeks) No tax audit per case 100 study scenario Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 43 Doing Business 2020 Taiwan, China Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: • Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as origin economy 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, • Obtaining, preparing and submitting documents required by suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and destination economy and any transit economies can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours. • Covers all documents required by law and in practice, including electronic submissions of information Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the Border compliance costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. • Customs clearance and inspections Contributors are private sector experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: • Handling and inspections that take place at the economy’s port - For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in or border the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy. Domestic transport - It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from • Loading or unloading of the shipment at the warehouse or its natural import partner—the economy from which it imports the largest value (price times port/border quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is • Transport between warehouse and port/border the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while shipment is en - The mode of transport is the one most widely used for the chosen export or import product and route the trading partner, as is the seaport or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 44 Doing Business 2020 Taiwan, China Trading across Borders - Taiwan, China Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Time to export: Border compliance (hours) 17 57.5 12.7 1 (19 Economies) Cost to export: Border compliance (USD) 335 381.1 136.8 0 (19 Economies) Time to export: Documentary compliance (hours) 5 55.6 2.3 1 (26 Economies) Cost to export: Documentary compliance (USD) 84 109.4 33.4 0 (20 Economies) Time to import: Border compliance (hours) 47 68.4 8.5 1 (25 Economies) Cost to import: Border compliance (USD) 340 422.8 98.1 0 (28 Economies) Time to import: Documentary compliance (hours) 4 53.7 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 65 108.4 23.5 0 (30 Economies) Figure – Trading across Borders in Taiwan, China – Score 90.0 68.4 97.6 79.0 83.4 71.6 98.7 90.7 Time Cost Time Cost Time Cost Time Cost to to to to to to to to export: export: export: export: import: import: import: import: Border Border Documentary Documentary Border Border Documentary Documentary compliance compliance compliance compliance compliance compliance compliance compliance Figure – Trading across Borders in Taiwan, China and comparator economies – Ranking and Score DB 2020 Trading Across Borders Score 0 100 95.0: Hong Kong SAR, China (Rank: 29) 92.5: Korea, Rep. (Rank: 36) 88.5: Malaysia (Rank: 49) 85.9: Japan (Rank: 57) 84.9: Taiwan, China (Rank: 61) 71.6: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Page 45 Doing Business 2020 Taiwan, China Figure – Trading across Borders in Taiwan, China – Time and Cost Time (hours) Cost (USD) 50 47 400 335 340 350 40 Time (hours) 300 Cost (USD) 30 250 200 20 17 150 84 100 10 65 5 4 50 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 46 Doing Business 2020 Taiwan, China Details – Trading across Borders in Taiwan, China Characteristics Export Import Product HS 85 : Electrical machinery and equipment and HS 8708: Parts and accessories of motor vehicles parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles Trade partner China Germany Border Kaohsiung port Kaohsiung port Distance (km) 376 376 Domestic transport time (hours) 6 6 Domestic transport cost (USD) 300 300 Details – Trading across Borders in Taiwan, China – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required by 4.2 147.7 customs authorities Export: Clearance and inspections required by 0.0 0.0 agencies other than customs Export: Port or border handling 12.6 187.7 Import: Clearance and inspections required by 34.5 155.4 customs authorities Import: Clearance and inspections required by 0.0 0.0 agencies other than customs Import: Port or border handling 12.9 185.0 Page 47 Doing Business 2020 Taiwan, China Details – Trading across Borders in Taiwan, China – Trade Documents Export Import Commercial invoice Bill of lading Packing list Commercial invoice Bill of lading Packing list Certificate of origin Customs Import Declaration Customs Export Declaration SOLAS certificate SOLAS certificate Page 48 Doing Business 2020 Taiwan, China Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the courts The dispute in the case study involves the breach of a sales contract between two domestic (calendar days) businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. • Time to file and serve the case • Time for trial and to obtain the judgment To make the data on the time and comparable across economies, several assumptions about the case are used: • Time to enforce the judgment - The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both Cost required to enforce a contract through the courts (% of located in the economy’s largest business city. For 11 economies the data are also collected for the claim value) second largest business city. - The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of • Average attorney fees adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local currency of • Court costs USD 5,000, whichever is greater. • Enforcement costs - The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater. Quality of judicial processes index (0-18) - The Seller requests the pretrial attachment of the defendant’s movable assets to secure the • Court structure and proceedings (-1-5) claim. - The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods • Case management (0-6) was not adequate. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. - The Seller enforces the judgment through a public sale of the Buyer’s movable assets. • Alternative dispute resolution (0-3) Page 49 Doing Business 2020 Taiwan, China Enforcing Contracts - Taiwan, China Standardized Case Claim value TWD 1,521,026 Court name Taipei District Court City Covered Taipei Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Time (days) 510 581.1 589.6 120 (Singapore) Cost (% of claim value) 18.3 47.2 21.5 0.1 (Bhutan) Quality of judicial processes index (0-18) 14.0 8.1 11.7 None in 2018/19 Figure – Enforcing Contracts in Taiwan, China – Score 68.0 79.5 77.8 Time Cost Quality of judicial processes index Figure – Enforcing Contracts in Taiwan, China and comparator economies – Ranking and Score DB 2020 Enforcing Contracts Score 0 100 84.1: Korea, Rep. (Rank: 2) 75.1: Taiwan, China (Rank: 11) 69.1: Hong Kong SAR, China (Rank: 31) 68.2: Malaysia (Rank: 35) 65.3: Japan (Rank: 50) 53.0: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Page 50 Doing Business 2020 Taiwan, China Figure – Enforcing Contracts in Taiwan, China – Time and Cost Time (days) Cost (% of claim value) 700 47.2 50 Cost (% of claim value) 581.1 589.6 600 37.9 510 40 Time (days) 500 425 385 360 30 400 23.6 23.4 21.5 290 300 18.3 20 200 12.7 10 100 0 0 East Hong Japan Korea, Malaysia OECD Taiwan, Asia Kong Rep. high China & SAR, income Pacific China Page 51 Doing Business 2020 Taiwan, China Figure – Enforcing Contracts in Taiwan, China and comparator economies – Measure of Quality Taiwan (China) 3 4.5 3 3.5 Hong Kong SAR, China 2.5 2 1 4.5 Japan 2.5 1 1 3 Korea, Rep. 3 4 4 3.5 Malaysia 2.5 4 2.5 4 OECD high income 2.5 3.2 2.4 3.6 East Asia & Pacific 2.2 2.2 1.3 3 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Taiwan, China Indicator Time (days) 510 Filing and service 30 Trial and judgment 360 Enforcement of judgment 120 Cost (% of claim value) 18.3 Attorney fees 15.5 Court fees 2.6 Enforcement fees 0.2 Quality of judicial processes index (0-18) 14.0 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 4.5 Court automation (0-4) 3.0 Alternative dispute resolution (0-3) 3.0 Page 52 Doing Business 2020 Taiwan, China Details – Enforcing Contracts in Taiwan, China – Measure of Quality Answer Score Quality of judicial processes index (0-18) 14.0 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.5 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be granted? No 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) Yes 1.0 clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the competent court? Yes 1.0 5. Are there any electronic case management tools in place within the competent court for use by judges? Yes 1.0 6. Are there any electronic case management tools in place within the competent court for use by lawyers? Yes 1.0 Court automation (0-4) 3.0 1. Can the initial complaint be filed electronically through a dedicated platform within the competent court? Yes 1.0 2. Is it possible to carry out service of process electronically for claims filed before the competent court? No 0.0 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the general public Yes through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made Yes available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 3.0 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or Yes section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— No that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes Page 53 Doing Business 2020 Taiwan, China 2. Mediation/Conciliation 1.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or Yes section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig 2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or Yes conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 54 Doing Business 2020 Taiwan, China Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s estate) - The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater. • Measured as percentage of estate value - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. • Court fees The hotel cannot pay back the loan, but makes enough money to operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to judicial • Lawyers’ fees liquidation and reorganization proceedings and the extent to which best insolvency practices have • Assessors’ and auctioneers’ fees been implemented in each economy covered. • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal Recovery rate for creditors • Measures the cents on the dollar recovered by secured creditors • Outcome for the business (survival or not) determines the maximum value that can be recovered • Official costs of the insolvency proceedings are deducted • Depreciation of furniture is taken into account • Present value of debt recovered Strength of insolvency framework index (0- 16) • Sum of the scores of four component indices: • Commencement of proceedings index (0-3) • Management of debtor’s assets index (0-6) • Reorganization proceedings index (0-3) • Creditor participation index (0-4) Page 55 Doing Business 2020 Taiwan, China Resolving Insolvency - Taiwan, China Indicator Taiwan, China East Asia & OECD high Best Regulatory Pacific income Performance Recovery rate (cents on the dollar) 82.2 35.5 70.2 92.9 (Norway) Time (years) 1.9 2.6 1.7 0.4 (Ireland) Cost (% of estate) 4.0 20.6 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. .. Strength of insolvency framework index (0-16) 10.5 7.0 11.9 None in 2018/19 Figure – Resolving Insolvency in Taiwan, China – Score 88.5 65.6 Recovery rate Strength of insolvency framework index Figure – Resolving Insolvency in Taiwan, China and comparator economies – Ranking and Score DB 2020 Resolving Insolvency Score 0 100 90.2: Japan (Rank: 3) 82.9: Korea, Rep. (Rank: 11) 77.1: Taiwan, China (Rank: 23) 67.0: Malaysia (Rank: 40) 65.7: Hong Kong SAR, China (Rank: 45) 40.9: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Page 56 Doing Business 2020 Taiwan, China Figure – Resolving Insolvency in Taiwan, China – Time and Cost Time (years) Cost (% of estate) 3 25 2.6 20.6 Cost (% of estate) 2.5 20 Time (years) 2 1.9 1.7 15 1.5 1.5 10.0 1.0 9.3 10 1 0.8 5.0 0.6 4.2 3.5 4.0 5 0.5 0 0 East Hong Japan Korea, Malaysia OECD Taiwan, Asia Kong Rep. high China & SAR, income Pacific China Page 57 Doing Business 2020 Taiwan, China Figure – Resolving Insolvency in Taiwan, China and comparator economies – Measure of Quality Taiwan (China) 5.5 2.5 2 0.5 Hong Kong SAR, China 3 2 1 0 Japan 6 3 1 3 Korea, Rep. 5.5 2.5 1 3 Malaysia 2 3 2 0.5 OECD high income 5.3 2.8 2.1 1.9 East Asia & Pacific 3.7 2.3 1.3 1 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in Taiwan, China and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 100 92.1 90 87.2 84.3 82.2 81.0 80 70 60 50 40 35.5 30 20 10 0 Taiwan, China Hong Kong SAR, China Japan Korea, Rep. Malaysia East Asia & Pacific Page 58 Doing Business 2020 Taiwan, China Details – Resolving Insolvency in Taiwan, China Indicator Answer Score Proceeding reorganization Mirage management will initiate reorganization as this would be consistent with the management's intent to keep the business operating and would also maximize the value of the assets from the perspective of BizBank. Outcome going concern The hotel will continue operating as a going concern after the reorganization plan is approved by creditors. Time (in years) 1.9 The reorganization proceeding until the reorganization plan is approved by creditors takes approximate 1.9 years. After Mirage's filing for reorganization with the Taipei District Court, the Court will review the materials, accept Mirage's case for consideration and appoint an administrator usually in half a year. The insolvency administrator is responsible for finalizing creditors' claims and holding the creditors' meeting, which will take about 2 additional months. In the meantime, Mirage's management would prepare the reorganization plan and in practice it takes about 1 year to get the reorganization plan approved. Cost (% of estate) 4.0 The costs associated with the case would amount to approximately 4% of the value of the debtor's estate. The cost incurred during the entire insolvency process mainly includes attorney fees (1.5%), insolvency representative fees (1%), fees of accountants, assessors, inspectors and other professionals (1.5%) and other fees (up to 0,5%). Recovery rate 82.2 (cents on the dollar) Page 59 Doing Business 2020 Taiwan, China Details – Resolving Insolvency in Taiwan, China – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 10.5 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for 1.0 both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a creditor 0.5 may file for liquidation only What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) (c) Both (a) and (b) 1.0 Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value options are available, of its assets but only one of them needs to be complied with Management of debtor's assets index (0-6) 5.5 Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the Yes 1.0 debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0 Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of Yes 1.0 insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (a) Yes over all pre- 0.5 commencement creditors, secured or unsecured Reorganization proceedings index (0-3) 0.5 Which creditors vote on the proposed reorganization plan? (a) All creditors 0.5 Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as No 0.0 what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote No 0.0 separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency No 0.0 representative? Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0 Does the insolvency framework provide that a creditor has the right to request information from the insolvency Yes 1.0 representative? Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting Yes 1.0 creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 60 Doing Business 2020 Taiwan, China Employing Workers Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the worker and the (i) whether fixed-term contracts are prohibited for permanent business are used. tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the maximum probationary period; (iv) minimum The worker: wage;(v) ratio of minimum wage to the average value added per - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. worker. - Is a full-time employee. - Is not a member of the labor union, unless membership is mandatory. Working hours (i) maximum number of working days allowed per week; (ii) The business: premiums for work: at night, on a weekly rest day and overtime; - Is a limited liability company (or the equivalent in the economy). (iii) whether there are restrictions on work at night, work on a - Operates a supermarket or grocery store in the economy’s largest business city. For 11 weekly rest day and for overtime work; (iv) length of paid annual economies the data are also collected for the second largest business city. leave. - Has 60 employees. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the Redundancy rules food retail sector and they apply even to firms that are not party to them. (i) whether redundancy can be basis for terminating workers; (ii) - Abides by every law and regulation but does not grant workers more benefits than those whether employer needs to notify and/or get approval from third mandated by law, regulation or (if applicable) collective bargaining agreements. party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected. Page 61 Doing Business 2020 Taiwan, China Employing Workers - Taiwan, China Details – Employing Workers in Taiwan, China Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 744.0 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) n.a. Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 33.0 Restrictions on night work? No Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 7.0 Paid annual leave for a worker with 5 years of tenure (working days) 15.0 Paid annual leave for a worker with 10 years of tenure (working days) 16.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 12.7 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? Yes Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? Yes Priority rules for redundancies? No Priority rules for reemployment? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 2.9 Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 3.8 Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 2.2 Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 10.8 Page 62 Doing Business 2020 Taiwan, China Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 21.7 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 11.6 Unemployment protection after one year of employment? Yes Page 63 Doing Business 2020 Taiwan, China Business Reforms in Taiwan, China From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2020 Paying Taxes: Taiwan, China, made paying taxes costlier by increasing the corporate income tax rate. DB2019 Dealing with Construction Permits: Taiwan, China made dealing with construction permits less time-consuming by improving the efficiency of its a single window counter in the Taipei City Construction Management Office. Protecting Minority Investors: Taiwan, China, strengthened minority investor protections by enhancing ownership and control structures in listed companies. DB2018 Trading across Borders: Taiwan, China made exporting easier by allowing different organizations to electronically issue certificates of origin. Enforcing Contracts: Taiwan, China, made enforcing contracts easier by introducing an electronic filing system. Employing Workers: Taiwan, China, adopted legislation that increased the number of mandatory paid annual leave days and the number of weekly rest days. DB2016 Getting Electricity: The utility in Taiwan, China, reduced the time required for getting an electricity connection through a simplified procedure for obtaining excavation permits from the municipality. DB2015 Getting Electricity: Taiwan, China, made getting electricity easier by eliminating site inspections. Getting Credit: Taiwan, China, improved access to credit information by beginning to include data from utility companies in credit reports. Paying Taxes: Taiwan, China, made paying taxes easier for companies by introducing an electronic system for paying the vehicle license tax. DB2013 Dealing with Construction Permits: Taiwan, China, made dealing with construction permits easier by introducing a risk-based and self-regulatory inspection system and improving operational features of the one-stop shop for building permits. Protecting Minority Investors: Taiwan, China, strengthened investor protections by increasing disclosure requirements for related-party transactions and improving the liability regime for company directors in cases where such transactions are abusive. DB2012 Starting a Business: Taiwan (China) made starting a business easier by implementing an online one-stop shop for business registration. Dealing with Construction Permits: Taiwan (China) made dealing with construction permits easier by creating a one-stop center. DB2011 Starting a Business: Taiwan (China) eased business start-up by reducing the time required to check company names, register retirement plans and apply for health, pension and labor insurance. Paying Taxes: Taiwan (China) reduced the corporate income tax rate and simplified tax return forms, rules for assessing corporate income tax and the calculation of interim tax payments. DB2010 Starting a Business: Taiwan, China, made starting a business easier by abolishing the minimum capital requirement and speeding up various procedures. Paying Taxes: Taiwan, China, made paying taxes easier for companies by extending electronic filing and payment to value added tax. DB2009 Getting Credit: Taiwan, China, strengthened its secured transactions system through an amendment to its civil code allowing the use of personal real estate or property to secure a line of credit, for not more than a specified maximum amount. Page 64 Doing Business 2020 Taiwan, China Page 65