Outsourcing of Processing Relaxed for Free Trade Zone Enterprises

       The Free Trade Zone Coordinating Committee of the Executive Yuan in the 14th meeting this year has decided to allow enterprises in free trade zones to commission multi-stage processing to two or more enterprises, either in bonded areas or in areas that are liable to customs tariffs. The new relaxation, which will be implemented once the Ministry of Finance completes the necessary legal procedures, will help FTZ enterprises use Taiwan’s outstanding and comprehensive manufacturing capabilities flexibly to create higher profits.

According to Article 23 of the Act for Establishment and Management of Free Trade Zones, FTZ enterprises may, after applying to and receiving permission from the Customs, ship tax-exempted goods, machinery, or equipments to tariff-liable areas for repair, testing, or inspection without providing a tariff guarantee for such contracted processing.  At the current time, in additional to manufacturers, FTZ enterprises engaging in logistics industry may apply to contract companies in tax-liable areas to carry out simple processing. In addition, those who receive special approval from the Free Trade Zone Coordinating Committee may also contract processing out. Regulatory provisions for contracting between FTZ enterprises and for FTZ enterprises to take processing contracts from enterprises outside the zones are currently under planning.

For details on the progress of the free trade zone program, please go online and visit http://www.cedi.cepd.gov.tw/index.php?fPath=13&CediID=54e5295db1b01a7aa78ad7be980f824e.

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