Source: Taiwantrade | Updated: 11 January 2013
Taiwan received a score of 72.7 on the foundation's annual economic freedom index, the think tank said in its latest report.
The score was 0.8 points higher than last year, thanks to gains in labor freedom, business freedom and freedom from corruption, the report said.
It also marked the fifth straight year that Taiwan's score has risen in the annual study.
Taiwan was ranked fifth out of 41 Asia-Pacific economies listed in the 2013 rankings, and its overall score was higher than the world average, the report said.
For the 19th year in a row, the foundation ranked Hong Kong as the freest economy in the world. Singapore was a close second, followed by Australia and New Zealand. The United States, the world's largest economy, was ranked 10th.