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.
RUN IT BACK: A succesful first project working with hyperscalers to design chips encouraged MediaTek to start a second project, aiming to hit stride in 2028 MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it is engaging a second hyperscaler to help design artificial intelligence (AI) accelerators used in data centers following a similar project expected to generate revenue streams soon. The first AI accelerator project is to bring in US$1 billion revenue next year and several billion US dollars more in 2027, MediaTek chief executive officer Rick Tsai (蔡力行) told a virtual investor conference yesterday. The second AI accelerator project is expected to contribute to revenue beginning in 2028, Tsai said. MediaTek yesterday raised its revenue forecast for the global AI accelerator used
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
Artificial intelligence (AI) giant Nvidia Corp’s most advanced chips would be reserved for US companies and kept out of China and other countries, US President Donald Trump said. During an interview that aired on Sunday on CBS’ 60 Minutes program and in comments to reporters aboard Air Force One, Trump said only US customers should have access to the top-end Blackwell chips offered by Nvidia, the world’s most valuable company by market capitalization. “The most advanced, we will not let anybody have them other than the United States,” he told CBS, echoing remarks made earlier to reporters as he returned to Washington
RSS