Chinese investments in Taiwan are to be more strictly regulated under a draft amendment to the Measures Governing Investment Permits to the People of the Mainland Area (大陸地區人民來台投資許可辦法), the Ministry of Economic Affairs said yesterday.
The amendment would change articles 3, 4 and 6 to expand the definition of Chinese capital and close loopholes that could be used by investors to skirt regulations on Chinese capital, the Investment Commission said.
“The US, Japan and Germany are all tightening foreign investment requirements for China,” commission spokesman Su Chi-yen (蘇琪彥) told a news conference in Taipei. “In Taiwan we have separate laws governing foreign investment from China and the rest of the world, so we are only tightening the laws regarding Chinese investment.”
Photo: Huang Pei-chun, Taipei Times
Su said that the regulatory changes are to determine whether Chinese investors have material control of a company.
Under Article 3, any company with more than 30 percent Chinese ownership is considered a Chinese company, but if a 40 percent Chinese-owned firm acquired a 40 percent stake in a second entity, the second company would be considered a non-Chinese company with 16 percent Chinese ownership, Su said.
“Under the new rules, the second company would still be considered a Chinese company because it is 40 percent owned by a Chinese firm,” she said.
Another change to Article 3 would define so-called “material control” of a company by Chinese capital, the commission said.
A company is considered to be under the control of Chinese capital if more than half of its board of directors are Chinese nationals. The draft amendment would extend this designation to any company that is under the executive control of a Chinese organization, the commission said.
“It would be easy to determine which group is actually making the real decisions by looking at company documents. Maybe it is an executive committee technically under the board, but if they are the real decisionmakers, they need to be subject to the new rules and cannot be considered a non-Chinese company,” Su said.
Article 4 governs the definition of investment, and the new regulations would consider a Taiwanese company a subsidiary of a Chinese firm based on investment from Chinese capital, even in the absence of a stock deal, Su said, adding that any purchase of assets would be considered a form of investment in that company.
“Under the new rules, a Chinese company would no longer be able to purchase a whole [research and development] department of a Taiwanese company and claim it is not an investment because no stock changed hands,” Su said.
Article 6, which forbids Chinese military-owned companies from investing in Taiwan, would be expanded to include Chinese Communist Party-owned companies, the commission said.
The commission on Thursday is to post the draft amendment for public review and to receive feedback for 60 days before holding a cross-departmental meeting to finalize the changes.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
RSS