The National Development Fund yesterday approved plans to set aside NT$100 billion (US$3.1 billion) to help companies transform and upgrade, as one of the government’s short-term measures to stimulate the economy.
The move is intended specifically to boost private investment, a GDP component the government can achieve with lasting benefits, the National Development Council said.
“Effective today [yesterday], companies with acquisition, merger, spinoff and other venture plans may apply for investment funding,” the council said.
Investment by the fund is capped at 20 percent of a company’s capitalization, while collective investments in a conglomerate should not exceed NT$10 billion, the council said.
Ventures that would increase job opportunities and are proposed by small and medium-sized enterprises will be favored over large-cap firms, which have easier access to credit, the council said.
The government welcomes partnership from venture capital firms and would allow private funds to act as lead investors, the council said.
Potential fund partners must have capital of NT$1.5 billion and experience in corporate acquisitions, mergers or spinoffs in the past three years, it said.
The government will set up a task force to review investment applications and two-thirds approval is required for all investment projects, the council said.
The government has no intention of competing for management rights in invested companies, but will seek to exit in five years’ time, the council said, adding that it could stay longer, if necessary.
Taiwan must cut its dependence on a few industries and a few export destinations to survive external shocks, the government has said.
Electronic components and information and communication devices account for 50 percent of exports from Taiwan, making it susceptible to global technology cycles.
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