Successful Strategies For Doing Business In Asia: Taiwan

1. What role does the government of Taiwan play in approving and regulating foreign direct investment?

Three types of Taiwan government approval requirements may be relevant to direct foreign investment in Taiwan:

• Approvals that are required solely because the investor is foreign (Foreign Investment Approval)

• Approvals required under industry-specific regulations applicable to both foreign and local investors (Industry Approvals)

• Approvals required due to impact on competition in the market (Competition Approvals)

FOREIGN INVESTMENT APPROVAL -

Foreign investment approval requirements depend on whether the vehicle for direct foreign investment in Taiwan is a branch of a foreign company (Branch) or a locally formed corporation (Subsidiary).

No foreign investment approval is required for the establishment of a Branch.

Foreign direct investment in non-publicly listed companies in Taiwan requires an approval from the Investment Commission of the Ministry of Economic Affairs (MOEA), under the Statute for Investment by Foreign Nationals. Such approval is commonly referred to as an FIA. For capital investment in nonregulated industries of less than approximately USD40 million, FIA approval is pro forma, available within three to five days, and is given at a staff level without necessitating a formal committee meeting. Subsequent sale of shares acquired under the FIA regime requires a future pro forma FIA approval...

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