Taiwan Free Trade Zone

1. The integrated production-to-sale operations of FTZ enterprises tie together the tax-free “storefront” status of FTZs and the broad-spectrum, high-quality manufacturing capabilities of Taiwan’s domestic industries. FTZ enterprises may significantly enhance the cost and technological competitiveness of their products through taking advantage of domestic outsource-manufacturing opportunities.
2. Contract manufacturing (value-added) is subject to a case application process. August 28th, 2013 revisions to the Regulations Governing Customs Clearance for Goods in Free Trade Zones no longer make a distinction between simple and substantive value-added processing. All may be processed via administrative request, which is reviewed and approved by the FTZ authority on behalf of Taiwan’s customs authority. Application is made to the customs authority for permission for the entry and storage of goods following approval of the administrative request.

In order to reduce the frequency of goods transportation, shorten the time of logistic operation and lower the declaration cost, FTZ enterprises may directly ship goods out to a taxed (bonded) area for commissioned processing by declaring the goods as Type F1 after the goods arrive at the border.

1. There is no need to submit the case to the customs for review after it is approved, as the Maritime and Port Bureau, MOTC has reviewed the case in conjunction with customs, if needed.
2. Moreover, the sea and air port FTZs shall handle the case in accordance with the Instructions for Operating Procedure of the Review of Free Trade Zone Management Authority on Application for Processing Contracted to Contractors outside the FTZs issued by the Maritime and Port Bureau.

1. As indicated in Tai Cai Guan Zi No.1031008582 Correspondence released by the Ministry of Finance on April 24, 2014, the customs shall not specify the term of validity of approval in all approval letters, so the FTZ management authority shall no indicate the valid term of the approval when accepting the review cases.
2. When the application doesn't indicate the valid term of commissioned processing, the FTZ management authority shall request the enterprise concerned to make correction by specifying the valid term in the application. Where it's required to set out a given valid term due to the need of administration, the valid term of commissioned processing may be indicated in the approval letter to be issued.

After a commissioned processing case is approved, the FTZ enterprise concerned shall go through clearance formalities with the customs in accordance with the requirements of the approval document, and ship the goods back to the FTZ within six months after the date of approval, and then close the case with the customs. When there is a need to extend the reshipment period, a renewal application may be filed with the FTZ management authority.

Outsourced testing service falls within the scope stipulated in Article 10 of the Regulations Governing Customs Clearance for Goods in Free Trade Zones, instead of being a commissioned processing item set forth in Article 9, therefore an application shall be filed with the customs.

As an establishment proposed by the department of a single company, the FTZ enterprise is allowed to outsource processing service to the factory affiliated to the same company. Contracts may be excluded from the application documents, however, a statement should be submitted.

As the FTZ enterprise is the subject of commissioned processing application, while processing contractors shall be eligible registered factories. In this case, the trading company who owns orders shall first contract with an FTZ enterprise, who then reaches a commissioned processing contract with a registered vegetable & fruits marketing cooperative association, and then the FTZ enterprise shall submit relevant contracts and documents to apply for commissioned processing.