The Financial Supervisory Commission (FSC) yesterday announced draft rules that would allow domestic companies to open offshore banking unit (OBU) accounts at domestic banks to take out foreign currency loans.
The rules are likely to take effect by the end of next month, the commission said.
Local firms would be able to open an OBU account if a foreign-currency loan application is approved, Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) told a news conference in New Taipei City.
The rules would mark a change to the nation’s OBU operations, as currently only overseas companies or paper companies are allowed to open OBU accounts.
The commission aims to improve supervision of local firms that set up units for the purpose of opening OBU accounts, it said.
About 90,000 of the nation’s 130,000 OBU accounts, or 70 percent, are owned by overseas firms that are actually Taiwanese companies, Lin said.
“The 90,000 firms might consider closing their existing accounts and opening new ones as a local company, given that costs have risen to remain an overseas entity amid stricter reporting standards, a heavier tax burden and higher compliance costs,” Lin said.
Local firms that open OBU accounts after receiving a loan would face limits on fund movements in the accounts due to rules to prevent money laundering, he said.
They could not move funds in the special account to a domestic bank, nor could they exchange it for New Taiwan dollars, rules that would help avoid fluctuations in foreign-exchange rates, he said.
The owners of OBU accounts would be required to explain how they would repay a loan when they apply for them, and could only transfer money into the accounts as repayments, not for the purpose of wealth management, Lin said.
Companies should use loan funds for expansion, working funds or direct investments in their foreign units, and could not park the funds in an OBU account for too long, nor could they receive interest on them, as they are not deposits, he said.
“Firms in different industries have their own payment cycles. Some firms have to pay their foreign clients every month and others maybe once a quarter, so we would let banks set their own limits on how long account owners could park funds,” Lin said.
Some private banks expect the government to allow them to be less strict about reviewing an OBU borrower’s documents, as many clients want to apply for such loans given the restrictions on foreign loans held in local banking units, he said.
Borrowers must submit documents showing transactions with foreign clients, as the central bank keeps an eye on foreign-exchange rates, he said.
However, banks need to examine borrowers’ documents to ensure loan safety, and follow the central bank’s rules, even though the funds in OBU accounts could not be converted into local currency, he said.
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her finance ministry, which has refused to rule out any options to counter excessive foreign exchange volatility. Takaichi later softened her stance, saying she did not have a preference for the yen’s direction. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” Takaichi said on Saturday at a rally for Liberal Democratic Party candidate Daishiro Yamagiwa in Kanagawa Prefecture ahead of a snap election on Sunday. “Whether it’s selling food or
CONCERNS: Tech companies investing in AI businesses that purchase their products have raised questions among investors that they are artificially propping up demand Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday said that the company would be participating in OpenAI’s latest funding round, describing it as potentially “the largest investment we’ve ever made.” “We will invest a great deal of money,” Huang told reporters while visiting Taipei. “I believe in OpenAI. The work that they do is incredible. They’re one of the most consequential companies of our time.” Huang did not say exactly how much Nvidia might contribute, but described the investment as “huge.” “Let Sam announce how much he’s going to raise — it’s for him to decide,” Huang said, referring to OpenAI
The global server market is expected to grow 12.8 percent annually this year, with artificial intelligence (AI) servers projected to account for 16.5 percent, driven by continued investment in AI infrastructure by major cloud service providers (CSPs), market researcher TrendForce Corp (集邦科技) said yesterday. Global AI server shipments this year are expected to increase 28 percent year-on-year to more than 2.7 million units, driven by sustained demand from CSPs and government sovereign cloud projects, TrendForce analyst Frank Kung (龔明德) told the Taipei Times. Demand for GPU-based AI servers, including Nvidia Corp’s GB and Vera Rubin rack systems, is expected to remain high,
RSS