The Republic of China (Taiwan) «Free Zones» Experience, or Origin of «Made in Taiwan» Tags

Abstract

Starting from the 1960s, many states began to create territories with a special business regime. They are called differently, but they are based on the concept of a free zone, within which imported goods are considered located outside the customs territory of the state. The establishment of free zones often does not bring the expected results. The problem lies in particular in the fact that the formal existence of a regulatory act providing for exemption from fiscal and other payments is not the main condition for attracting
foreign investment. Identifying a set of factors and determining the significance of legal regulation is important from a theoretical and practical point of view. The most famous and frequently mentioned are the special economic areas of the People’s Republic of China, but mainland China was not a pioneer. It was in Taiwan that the first export processing areas in Asia were established. Their specificity lies in the active role of the state and in the fact that foreign investments were used primarily as a source of technology transfer. Taiwan has made great strides in the economy and export processing areas have played a significant role in this. Based on the initial data on the creation and indicators of such areas, in this article attempts to comprehensively consider the relevant legislation and practice of Taiwan, taking into account its obligations under the WTO, as well as the identification of conditions that ensure the achievement of the goals of creating a free zone are given. Comparative legal and formal logical methods were used in the study. It has been established that the lack of raw materials, as well as the available market volume, are not determining factors for export processing areas. It is concluded that the role of regulatory act in the process of attracting foreign investment is limited. The absence of direct instructions in an international treaty does not mean an exception to legal regulation. The status of an unrecognized state and the absence of diplomatic relations do not have a negative impact on the export processing areas.