Medical Device Link.

Originally Published MX November/December 2002

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

Governments in the Asia-Pacific region provide many of the same facility-siting incentives that are available in the United States. Among these standard inducements are:

• Special lease rates.
• Cash grants.
• Training grants.
• Zoning waivers.
• Local tax exemptions.

The individual countries of the region vary in the additional incentives they use to persuade foreign business enterprises to set up operations within their borders. Research will turn up the differences. Some countries provide incentives not usually encountered in the United States. These include:

• Income tax exemptions.
• Rapid write-off of R&D.
• Waivers of customs duties.
• Exemption from power interruptions.

Some regional development zones offer industry-specific incentives to biotechnology and life sciences companies. These incentives are available only in certain locations, come with restrictions and limits, and sometimes depend on negotiation to be awarded, but they do exist. Here are some examples:

• In Australia, the Biotechnology Innovation Fund provides up to 50% of the costs of establishing proof of concept at the developmental stage.
• In Beijing, a 10% tax rate—as opposed to the normal 30%—applies to profits from royalties on technical knowledge derived from scientific research.
• In Calcutta (Kolkata), India, the state government provides biotech enterprises with a five-year subsidy of as much as 50% of annual interest liability.
• For companies located in so-called ecozones in the Philippines, a 10-year tax credit is available for genetic materials used in agriculture.

Incentives cannot turn a bad facility location into a good one. But incentives and government assistance can be deciding factors in choosing between two good alternatives. New industrial estates for life sciences are being developed at a rapid rate throughout the Asia-Pacific region. These science and biotech parks feature specialized infrastructure designed to satisfy the needs of life science companies.

It may not be necessary to site a facility in an industrial estate in a developed economy like that of Australia or New Zealand. Melbourne, Australia, for example, is the home of 22 nonprofit medical research institutes and seven teaching hospitals. But in many countries, the availability of industrial parks can make the location decision much easier.

Some facilities have been in place a long time. Hsinchu Science Park in Taiwan started in 1980. It hosts more than 300 high-technology companies on some 1500 acres. Most are information technology companies, but some are biotech. More than 10,000 researchers work there. Older facilities in some locations are changing. The Singapore Science Park took its first tenant in 1982. Today, in excess of 300 companies there employ more than 7000 people. And a new area is being developed nearby—Pharma Park, created specifically for the life sciences industry. Even newer is Hong Kong's Pak Shek Kok Science Park, whose Cyber Café opened just this August.

Copyright ©2002 MX