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Partnership between free trade zones may be forthcoming: Jiang

TAIPEI, Taiwan -- Premier Jiang Yi-huah (江宜樺) said yesterday that it is possible that Taiwan's free economic pilot zones and Shanghai's pilot free trade zone may collaborate in future.

Jiang said that rules governing the free economic pilot zones have been relaxed further to allow attorneys, accountants and architects to provide professional services in the pilot zones. In addition, education innovation will be another development focus in the zone.

In regards to taxation, the government provides three forms of tax favors. First, there will be no taxes exacted on foreign firms that conduct cargo storage and simple value-added work. Second, foreign professionals' income taxes will be halved for the first three years. Third, Taiwanese businesses that remit stock dividends and profits back to the pilot zone are exempted from paying business tax.

According to Jiang, the first stage of the pilot zone project, which involves relaxing executive orders without the need to change regulations, was launched in August this year. The second stage of the project, which requires a legal basis, is currently under deliberation by relevant authorities. The second stage of the project will begin once related regulations are approved by the Legislature.

Premier Jiang Urges New Plan in a Month

Jiang called on the Council for Economic Planning and Development (CEPD) to complete adjustments to the “free economic pilot zone project first-stage launch plan” and report on the finished version within a month. Upon approval by the Executive Yuan, the CEPD should communicate with different committees of the Legislature to facilitate the passage of the law, Jiang said.

In an effort to join the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP), President Ma Ying-jeou instructed the Executive Yuan recently to add working teams for international economic and trade strategies. Ma also instructed competent authorities to provide new plans before the end of February next year.

Finance Minister Calls for Opening Up

Finance Minister Chang stressed that in order to sign free trade agreements (FTA) with other countries and participate in global economic integration, it is essential to open up the domestic market. Without providing tariff favors and removing trade barriers, there are little incentives for other nations to sign FTAs with Taiwan.

The Mainland Affairs Council said the pilot zone may connect and cooperate with other countries including China, Japan, South Korea and ASEAN-6 countries. Jiang also said free trade and industrial partnerships may be formed with free trade zones in other countries.

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