The Taiwanese legislature passed the “Biotech and New Pharmaceutical Development Act” in June 2007. The Act is designed to offer incentives to companies in the pharmaceutical and biotech industry. In one major change, the Act allows publicly-funded researchers to help private companies with R&D. In addition, workers in government research institutions, such as Academica Sinica, will be able to serve as biotech company executives or consultants to private companies. The Act also allows biotech companies to offset personnel training and R&D expenses against 35% of their enterprise income tax. This 35% deduction can be spread over five years.
Since the Act’s passage, the Ministry of Economic Affairs has recently drafted laws supplementing it. Additions include details on the threshold for tax-relief. Tax relief under the Act applies to companies developing new biotech drugs or high-risk medical devices. However, they will need to spend at least 5% of total turnover or 10% of investment capital on new drug or device development to qualify.
The biotech market in Taiwan has been growing for the past several years. According to Taiwanese President Chen Shui-bian, investment in the biopharmaceutical industry rose from less than $300 million to almost $700 million annually over the past five years. President Chen also said that the biotech and biomedical market grew by an average of 13% over the past five years, and the industry had $6 billion turnover in 2006. With this new Act and increasing tax incentives for R&D, Taiwan’s biotech industry is strengthening considerably.