Fri, Jan 04, 2019 - Page 2 News List

Cabinet approves relaxed foreign investment rules

POST-APPROVAL:Most investors would be allowed to apply after the fact, as of about 3,500 applications that are received every year, only 500 require greater scrutiny

By Lee Hsin-fang and Sherry Hsiao  /  Staff reporter, with staff writer

Vice Minister of Economic Affairs Wang Mei-hua speaks at a news conference in Taipei yesterday after an Executive Yuan meeting.

Photo: CNA

The Executive Yuan yesterday approved draft amendments to the Statute for Investment by Foreign Nationals (外國人投資條例) and the Statute for Investment by Overseas Chinese (華僑回國投資條例) that would relax regulations on foreign and overseas investments.

The amendments would allow ordinary mergers, divisions and start-ups to be reported after the fact, Investment Commission Executive Secretary Emile Chang (張銘斌) said, adding that only more complex mergers and acquisitions would still require advance approval.

Of the 3,500 applications that the commission receives annually, 3,000 could be reported afterward, while only 500 would need preapproval, he said, adding that the new rules would simplify the process for foreign and overseas investments.

The exemption from advance application would apply to all cases except for those in which the investment exceeds a certain sum or involves a substantial percentage of shares; the investment is restricted; or the investor is a foreign government or in a region facing UN sanctions, he said.

The threshold would be US$1 million, but the Ministry of Economic Affairs still needs to discuss the issue with the central bank and other agencies, Vice Minister of Economic Affairs Wang Mei-hua (王美花) said.

Chinese investments would still be governed by the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例), she said.

Under current regulations, even if Chinese funds account for less than 30 percent of an investment, it would still require regulation if it can be determined that the funds have the ability to control the company making the investment, Chang said.

The draft amendments would also improve the transparency and predictability of reviews of foreign investments, the ministry said.

The competent authority would be required to request supplementary documentation within five days in case investors fail to submit complete documentation, it said.

The competent authority would also be required to approve or reject an application within a month, except in cases that involve other authorities, in which case the agencies would be given two months to reach a decision, it said.

The ministry is to announce clear criteria for approving or rejecting investment proposals, or restricting investments, to improve review efficiency, it said.

The draft amendments would also introduce new fines and penalties on unlawful investments, the ministry added.

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