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Offshore capital repatriation law and investment incentive programs deliver eye-catching results

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Premier Su Tseng-chang on Thursday praised the stabilizing effect that an offshore funds repatriation law and three major investment incentive programs have had on Taiwan's economy. At Thursday's weekly Cabinet meeting, the Ministry of Finance briefed the premier on the success of the Management, Utilization, and Taxation of Repatriated Offshore Funds Act, which has drawn more than NT$320 billion (US$11.5 billion) in overseas funds back to Taiwan over two years. The three programs to boost investment in Taiwan, meanwhile, have attracted over NT$1.34 trillion (US$48.2 billion) in new investment and created in excess of 110,000 job opportunities.

With the shifting of the international economic situation, and eruption of the U.S.-China trade war, the government decided to take advantage of potential new opportunities. Promotion of three programs to boost investment in Taiwan began in 2019 to encourage businesses to accelerate investment in Taiwan, and the Management, Utilization, and Taxation of Repatriated Offshore Funds Act was established to draw back overseas funds to capitalize the nation's industrial and financial markets.

In the two years since the offshore funds act was enacted, the more than NT$320 billion (US$11.5 billion) repatriated has generated over NT$100 billion (US$3.6 billion) in real investment, and brought in excess of NT$25 billion (US$899.9 million) in tax revenue. As for the three major investment programs, total approved investments have exceeded NT$1.34 trillion, creating more than 110,000 job opportunities. Despite the ravages to the global economy caused by the pandemic, these two policies have not only helped overseas Taiwanese companies reposition themselves on the global market, but have also infused fresh energy to the domestic economy and stimulated economic momentum. The resultant effects are apparent in Taiwan's impressive economic growth rates over the past two years, the premier said.

Two weeks ago on September 9, Fitch Ratings raised Taiwan's sovereign credit rating to AA and the national rating to AAA for the first time in five years. In its report, Fitch pointed out that the reshoring of Taiwanese manufacturing and policy efforts to facilitate industrial upgrading and enhance supply-chain resilience with key trading partners will strengthen Taiwan's growth potential. Fitch on Monday also raised Taiwan's forecasted GDP growth for 2021 to 6 percent, up from the June estimate of 4.5 percent. Further, the Asian Development Bank on Wednesday upgraded its forecast for Taiwan's 2021 GDP growth from the April estimate of 4.6 to 6.2 percent, which is the highest in Asia, Premier Su said.

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