TAIPEI (Taiwan News) — Taiwan ranked fifth globally and second in Asia for economic freedom in the Heritage Foundation's global economic freedom index.
In the US think tank's 2026 Index of Economic Freedom report, Taiwan slipped one spot in its ranking of economic freedom among 184 countries, per CNA. However, its average score rose slightly by 0.1 point to 79.8.
The report ranked Singapore first in economic freedom, followed by Switzerland, Ireland, and Australia. Taiwan placed fifth worldwide and second in Asia, ahead of the Netherlands (10th), Canada (14th), South Korea (19th), the US (22nd), the UK (29th), Japan (30th), and China (154th).
Six of Taiwan’s 12 indicators were rated “free” (scores between 80 and 100), while its overall status was classified as “mostly free.” These included judicial effectiveness (94.3), fiscal health (92.9), government spending (90), trade freedom (86), property rights (83.4), and monetary freedom (80.3).
Scores improved in the indicators for property rights, government integrity, fiscal health, and monetary freedom. Taiwan also ranked among the world’s top 20 in trade freedom (8th), labor freedom (13th), judicial effectiveness (15th), and monetary freedom (16th), with labor freedom showing the largest improvement, rising from 17th.
The National Development Council said Taiwan implemented several legal reforms between 2024 and 2025. These included amendments to the Act for Development of Small and Medium Enterprises to improve the business environment and help SMEs upgrade and transform.
Other changes included revisions to regulations under the Electronic Signatures Act to promote wider use of digital signatures. Amendments to the Nationality Act eased residency requirements for highly skilled professionals seeking naturalization, while revisions to the Electricity Act loosened restrictions on green power trading and created a new category of electricity suppliers.
Taiwan has also introduced a digital nomad visa program. Amendments to the Statute for Industrial Innovation expanded tax incentives to encourage companies to adopt artificial intelligence, improve energy efficiency, reduce carbon emissions, and invest in startups.
However, Taiwan’s weakest indicator was tax burden, where its ranking fell from 87th in 2025 to 93rd in 2026. The council said the score change over the past two years was minimal and performance remained largely unchanged.
Officials said tax systems must balance multiple factors. Taiwan’s overall tax burden is higher than Hong Kong and Singapore, but lower than in China, Japan, and South Korea.
