Why Western Companies Move to the Asia? Part 3

This is the third and last part of the `Why Western Companies Move to the Asia?` article. Previous parts, I explained `Why west moves to Singapore, Hong Kong, Tokyo-Japan and Seoul-South Korea. `Now, It is time for Taiwan and the great China.

If you read the previous parts, you know that the Western Companies rushes to the Asia.But why? Because, there are a lot of advantages of doing business in Asia such as lower taxes, ease to do business, location, cheap labor, big market etc.



Taiwan

Despite the fact that, Taiwan is officially part of the Republic of China, it has own regulations and own business environment. What makes Taiwan so special? This small island has more GDP than Greece and Portugal combined.

Why Doing Business in Taiwan?

Firstly, Taiwan is the 3rd country after Singapore and Hong Kong in ease to doing business rank. Entrepreneurs can establish their firm less than 7 days and cost is approximatly less than $200 which is big plus for start-ups.

The other advantage is like Hong Kong, Taiwan is a great place to expand your business to the mainland China.  Therefore, a lot of western companies or start-ups locate their headquarter in Taiwan and make business with China. Furthermore, People's Republic of China and Taiwan has a lot of trade-agreement which decrease the tariffs and barriers for the companies.

Specially in Information Technology Industry, Taiwan has very good reputation.Furthermore, Taiwan has the second largest IT hardware manufacturer in the world which makes it more and more important for the technology companies.

Taiwan is developing.  Taiwan's position is always higher than the last year's position in business surveys. Ease to doing business ranking, Global Competitiveness report etc. This is specially important for the start-up companies which can find itself very good position in Taiwanese Developing Economy. Despite the fact that, Taiwanese Government are raising minimum wage per hour and monthly wages still labor cost is very low compared to the US or Europe. This is also big advantage for start-ups. (Taiwanese Minimum Monthly Wage is $600 and minimum wage per hour is $3. )

Low tax rates are the another reason for Western companies to move. Like Singapore and Hong Kong, Taiwan has just 17% corporation tax which is much lower than Europe and USA.

People's Republic Of China

Despite the fact that, Chinese economy slows down, still China has enormous market. According to Walmart reports, regular US citizen uses 20 different Chinese products everyday. This big manufacturing and supply market makes China very charming for the Western Companies.

Why doing business in China?

China has the largest population in the world  but only 15% of the Chinese population has the same salary level like Europe and USA. However, this 15% (200 million people) has more purchasing power than any European country. As I mentioned in Hong Kong and Taiwan case, many Western companies move to Hong Kong and Taiwan just to be close to the Chinese market. This large market can help start-ups to be successful.

Secondly, Chinese growing economy (Average 9%) is very big advantage for the start-ups and established firms. It is hard to make or start business during recession yet slowing Chinese economy has still better growth rates than any European economy.

Moreover, Cost saving is another factor for the Western Companies to move the Asia. As everyone knows, China has one of the cheapest labor in the world. This is the main reason of Western start-ups to move there. Cheap labor, cheap raw material, cheap utility costs can lead the companies (specially start-ups) to make abnormal profits.

Corporation tax is 15% in the technology industry and 25% in general. It is higher than Taiwan, Singapore and Hong Kong but still lower than US and Europe. (France 33%)

In Conclusion

In part 3, I tried to explain you `Why Western Companies Move to the China and Taiwan?` All in all, they have their own culture, their own business environment and ethics. Reducing costs, big customer potential and developing market leads companies to start or establish business in these places.