The Financial Supervisory Commission (FSC) yesterday announced plans to set up a mechanism by the end of this year to allow small businesses to raise capital in the nation’s over-the-counter market, as part of a government effort to help boost creative industries.
The business startup board, taking cues from the US Jump-start Our Business Startups Act enacted in April last year, aims to encourage funding of local companies that have innovative ideas, but which lack the money to carry them out, outgoing FSC securities and futures bureau director-general Huang Tien-mu (黃天牧) told a media briefing.
Huang is about to assume the No. 2 position in the FSC, after the Cabinet recently tapped his predecessor Wu Tang-chieh (吳當傑) as new vice finance minister.
Only firms with capital of NT$50 million (US$1.67 million) or less are qualified to apply to list on the startup board and their shares may not be traded on the open market, Huang said.
Interested companies may wait for up to two years before the GRETAI Securities Market approves the listing application, he said.
Potential candidates are firms in the creative and agricultural industries across Taiwan, but may encompass all sectors, Huang said.
“We hope about 70 companies can list on the startup board next year and raise a total of NT$210 million,” Huang said.
As of July this year, about 64 percent of Taiwanese companies, or 390,000, have a capitalization of between NT$1 million and NT$10 million, the commission said, adding that another 18 percent, or 110,000 firms, have a capitalization of between NT$10 million and N$50 million.
The deteriorating international business environment has driven the government to place more emphasis on a services economy in the hope of reducing Taiwan’s dependence on external demand and creating job opportunities more evenly in different parts of the country.
Successful creative projects could be a film production, activities to strengthen public appreciation of rural life and other ventures with innovative value-adds, the commission said.
While institutional and individual investors may both apply to buy startup shares, the commission keeps a cap of NT$60,000 on individual investors to limit investment risks, Huang said. Further, startup companies may not increase their capital by more than NT$15 million a year, he added.
The commission encourages companies listed on the startup board to move onto the emerging stock market and the main board, as they grow in scale, Huang said.