The Council for Economic Planning and Development said yesterday it will include financial services in the government’s free economic pilot zones plan, after reaching an agreement with the Financial Supervisory Commission.
The government will open certain financial services and products to qualified financial institutions to attract money and stop the financial sector brain drain, Council for Economic Planning and Development Minister Kuan Chung-ming (管中閔) said.
“We used to confine all financial companies to provide a small set of products and services, regardless of their capability to manage risks. Now we plan to give more freedom to companies that meet the standards set by the Financial Supervisory Commission,” Kuan said.
Meanwhile, Jean Chiu (邱淑貞), deputy director-general of the commission’s banking bureau, said the commission will further loosen regulations governing domestic banks’ offshore units so they can provide customers with more trust, securities, asset management and foreign exchange products and services.
Under the council’s plan, qualified companies do not need to be located in any of the government’s designated free-trade zones.
The government plans to ease its monitoring of qualified firms, but will subject them to heavy penalties if violations are found.
While the qualified firms still have to inform the government about their new financial products and services, they are under no requirement to gain regulatory approval for their products and services before launching, the council said.
Companies can provide their products and services to foreign citizens, institutions and investors who meet the regulatory requirements, and all financial transactions under the pilot zones will be conducted in foreign currencies to avoid influencing the local exchange rate, it said.
A final proposal detailing the inclusion of financial services within the pilot zones is expected to be sent to the Cabinet next month for review, the council said.
Under the government’s preliminary proposal for the free economic pilot zones unveiled in March, Taiwan aims to relax regulations and offer tax reductions in the nation’s six free-trade zones — Suao Port in Yilan County, Keelung Port, Taipei Port in New Taipei City (新北市), Taichung Port in Greater Taichung, Kaohsiung Port in Greater Kaohsiung and the Taoyuan Aerotropolis in Taoyuan County. The aim is for these zones to serve as bases for companies to establish international logistics centers, operate international medical services, manufacture value-added agricultural products, and cooperate with local industries to promote industrial innovation and integration.
Additional reporting by Crystal Hsu