A Ministry of Finance proposal to allow subsidiaries of securities firms or fund companies to set up shop in China was passed by the Executive Yuan on Friday.
Subsidiaries are defined as financially independent from the mother company while branches are not. The implementation of the new rules will be decided by the Executive Yuan and the Mainland Affairs Council, a ministry official said.
According to the proposal, the total investment by each firm cannot exceed 10 percent of the parent company's net worth in Taiwan.
The minimum capital requirement for setting up a local securities firm is NT$200 million, and NT$300 million for a fund company.
Only securities firms, fund companies, and insurance companies are currently allowed to set up representative offices in China.
Total foreign investment for securities firms cannot exceed 20 percent of their net worth. Total investment both in Taiwan and overseas can not exceed 40 percent of the parent company's capital.
Securities investment trust companies are only allowed to establish subsidiary companies or joint ventures in China -- branch offices are not allowed. And total investment in China for fund companies cannot exceed 10 percent of its company net worth.
Insurance companies are permitted to set up branches or subsidiaries in China.
Total investment can not exceed 5 percent of the company's total capital, although the limit may be raised by up to 20 percent with permission from the ministry.
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