BERI Offers an Advance in Taiwan’s Investment Environment Ranking to No. 4 in the World and No. 2 in Asia.

According to the latest report issued by the U.S.-based research institute Business Environment Risk Intelligence (BERI), Taiwan was rated No. 4 in the world in investment environment and No. 2 in Asia (refer to Table 1).  Among the 50 countries surveyed in the report by BERI, Taiwan ranked only behind Switzerland, Singapore, and Norway; the best ranking reached for the past six years.  The BERI stated that as Taiwan’s economy is clearly on the recovery trend this year (2010) and an improved cross-strait relationship after the signing of Economic Cooperation Framework Agreement (ECFA) are clearly factors boosting Taiwan’s ranking this time.

BERI issues its reports of the “Investment Environment Risk Assessment Report” in April, August, and December each year, evaluating the level of profit opportunity in each country from the perspective of a transnational corporation, to serve as a basis for assessing the pros and cons of the investment environment.  In the previous survey conducted in December 2009, the US institute rated Taiwan as the fifth-best investment destination in the world, whereas the island was rated as the fourth-best investment destination in the BERI’s report of April 2010.  Taiwan stayed at the same ranking for the second time, with a one-point rise from its previous rating in April reaching 71 points.

The reported given Taiwan a 1B rating as a favorable investment environment.  BERI predicted political stability for Taiwan with no major risks in 2010 and 2011 and continued close times with Mainland China in the coming two years.  Taiwan is expected to rank No.4 in the world for year 2011, and a ranking of No. 5 for 2015.

Taiwan was ranked No. 2 in Asia only trailed Singapore’s, and was only second to Singapore (No. 2 globally, 78 points); but ahead of Japan (sixth-best in the world, 68 points), China (No. 15 globally, 60 points), South Korea (No. 18 globally, 57 points), Malaysia (No. 21 globally, 56 points), India (29th place globally, 46 points), Thailand (32nd place globally, 45 points), the Philippines (34th globally, 44 points), Indonesia and Vietnam (both 39th place with 41 points).

I.  Operations Risk Index:  Taiwan ranked 3rd globally, 2nd in Asia

Taiwan came 3rd in the world (69 points) in operations risks, advancing two places with a two-points gain from its rating earlier this year (2010), behind Singapore and Switzerland, and tying with Norway.  Among the Asian economies surveyed, Taiwan’s rank only trailed Singapore’s (No. 1 globally, 73 points); better than Japan (No. 18 globally, 56 points), Malaysia (21st place globally, 54 points), China (22nd place globally, 53 points), South Korea (25th place globally, 50 points), India (No. 26 globally, 49 points), Thailand (No. 32 globally, 43 points), the Philippines (36th globally, 42 points), Vietnam (40th globally, 40 points) and Indonesia (41st globally, 39 points).

According to BERI, compared to the economic downturn in 2009, Taiwan sees a strong economic rebound in 2010 and a rise in consumer confidence index with a projected real GDP growth rate (economic growth rate) of 6.8%, largely because of export growth and consumer spending.  The strong economic performance is reflected in employment – BERI expects Taiwan’s unemployment rate to drop to below 5.5% in 2010 and to continue dripping next year.  Taiwan is projected to receive a score of 70 points to stay in the third position in 2011 and 2015.

II.  Political Risk Index:  Taiwan ranked 11th globally, 2nd in Asia

In political risks index, the island came eleventh globally with a score of 60 points, advancing two places from BERI’s previous report in April 2010 and placed No. 2 in Asia.  Only behind Singapore (No. 1 globally, 76 points), better than Japan (No. 14 globally, 57 points), Mainland China (No. 16 globally, 56 points), Malaysia (No. 23 globally, 51 points), South Korea (No. 24 globally, 50 points), Vietnam (No. 25 globally, 48 points), the Philippines (No. 29 globally, 43points), India (No. 33 globally, 42 points), Thailand (No. 40 globally, 38 points) and Indonesia (No. 48 globally, 35 points).

According to BERI, Taiwan’s political risks have been under effective control.  It can also be evident by the signing of the cross-strait Economic Cooperation Framework Agreement (ECFA), in the late June between both sides of the Straits.  In the coming two years, Taiwan is expected to continue maintaining a stable relationship with the U.S. and purchasing arms from the U.S. as well.  BERI forecasts a score of 61 points in 2011 in political risks index, placing Taiwan at No. 11 globally, followed by 62 points in 2015 for No. 12 globally, and 64 points in 2020 for No. 12 worldwide.

III.  Remittance and Repatriation Factor (Foreign Exchange Risk; Forex Risk): Taiwan ranked 3rd worldwide, 2nd in Asia

Taiwan stayed at No. 3 worldwide in foreign exchange risks, with 85 points, a one-point rise from its previous rating in April this year, and was only second to Japan in Asia, which received a score of 90 points and ranked the world’s No. 1.  Taiwan tied with Singapore; better than South Korea (No. 8 worldwide, 72 points), Mainland China (No. 9 worldwide, 70 points), Malaysia (No. 19 worldwide, 62 points), Thailand (No. 25 worldwide, 53 points), Indonesia (No. 29 worldwide, 49 points), the Philippines (No. 33 worldwide, 48 points), India (No. 34 worldwide, 47 points), and Vietnam (No. 47 worldwide, 34 points).

According to BERI, Taiwan’s forex risks remained stable and both export and import rose.  In direct inbound investment by foreigners, BERI considers that the establishment of the governmental agency, Global Investment Taskforce, the cut in business tax rate to 17%, and the recent signing of ECFA will help to boost investor confidence and attract inbound foreign investment.  BERI predicts a score of 85 in forex risks for a global third-place ranking in 2011, and a score of 85 with No. 4 globally in 2015.

Table 2  BERI’s Most-updated Review on Taiwan’s Investment Environment
		Ranking	Remark
Overall Ranking		No. 4 worldwide	Same ranking, up one point reaching a score of 71 points. Top three were Switzerland, Singapore, and Norway respectively.
Sub-rankings	Operations Risk Index	No. 3 worldwide	Up 2 points, 2 positions Top two were Singapore and Switzerland
	Political Risk Index	No. 11 worldwide	Up 2 positions
	FX Risk	No. 3 worldwide	Up 1 point Top two were Japan and Switzerland
Note: Taken from the 2nd issue (August issue) of 2010, 50 countries in the world were surveyed in the report. Source: Ministry of Economic Affairs

(2010.09)
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