Web-based firms will benefit from tax credits offered under the government's development incentive policy, but are not likely to get a listing on the second board of Taiwan's over-the-counter (OTC) market before June of next year, the Ministry of Economic Affairs (經濟部) announced yesterday.
The ministry, which was put in charge of the growing Internet sector two weeks ago, estimated that it will take at least another six months before Internet firms would be listed on the smaller second board which is to be established early next year.
The government has identified the Internet as an important industry sector, according it the same favors some other industries receive.
"The Internet and Web industry will be included in the industries covered by the `Statute for Upgrading Industries' (促進產業升級條例)," said Wu Ming-ji (吳明機), an official at the Industrial Development Bureau (工業局) under the economics ministry.
"Shareholders will therefore enjoy a 10 percent tax deduction on investments."
Other benefits include tax credits for imported machinery and technology exchange with foreign partners, Wu said.
The statute is used by the government to shape the course of Taiwan's industrial development by offering chosen industries tax incentives.
"The detailed requirements (for companies to receive tax benefits) will be ready next January," said Wu.
"However, companies can make an early start and apply now."
The Industrial Development Bureau meanwhile has said that they are finalizing the criteria for Internet companies to become listed on the second board of the OTC, envisaging that the first companies would be ready to list in the second half of next year.
While it is relatively easy for Web companies to get listed, requiring only that the Industrial Development Bureau issue a guarantee letter confirming that company belongs to the "high-technology sector, and with profitable products," Ministry of Finance (財政部) regulations require 12 months consulting time, meaning that the listing would not occur for at least a year from now.
According to the Ministry of Finance, a company seeking listing on the yet to be established second board of the OTC (
The second board is being established to allow smaller that do not qualify for the main board to raise capital in the market.
Meanwhile, "regulations governing the management of the second board would be ready as early as next Marerch," Lin Tsong-Yeong (林宗勇), chairman of the Securities & Futures Commission (SFC,
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