Newsletter
EXECUTIVE YUAN APPROVES FURTHER RELAXATION TO RULES ON INVESTMENT IN MAINLAND CHINA
On 22 August 2008, the Executive Yuan approved amendments to the
Regulations Governing the Approval of Investment or Technical Cooperation in the
Mainland Area and the Principles for the Review of Investment or Technical Cooperation
in the Mainland Area to apply retroactively from 1 August 2008.
The main reforms are summarized below:
-
Relaxation of ceiling on investment in Mainland China
Total investment in Mainland China must not exceed the limits in
the table below:
|
Subject |
Investment Ceiling |
| Individual | US$5 million per annum |
| Small/Medium Enterprise | NT$80 million, or 60% of net worth or combined net worth of company, whichever is higher |
| Others | 60% of net worth or combined net worth of company, whichever is higher |
The above investment limits are applicable in all cases, except for companies operating as headquartered in Taiwan through the recognition of the Industrial Development Bureau of the Ministry of Economic Affairs (IDB), and for Taiwan subsidiaries of multinational corporations.
To apply for recognition of operational headquarters, companies which conform to the relevant employment, net annual income, level of international involvement and other conditions should submit the relevant application forms and accountant-certified documents to the IDB in accordance with the Operational Regulations Concerning Recognition of Companies' Operational Headquarters issued by the IDB on 26 September 2008. If approved, the IDB will issue a Certificate of Recognition of Operational Headquarters valid for three years.
-
Simplified process of reviewing applications to invest in Mainland China
For reports on and application for general investment or technical cooperation in Mainland China, the review process has been simplified as follows:
1. Reports: If an investor's aggregate amount of the investments does not exceed US$1 million, he must file a report with the Investment Commission (IC) within 6 months of the completion of each investment. In practice, however, the IC might calculate the investment amount in a given project in Mainland China by all ROC investors to determine whether the proposed investment is applicable for post-closing report procedure. The criteria for post-closing report procedure should be further clarified by the IC.
2. Special Review: If the aggregate amount of the investments in a given project in Mainland China exceeds US$50 million, the application will be examined by the IC after consultation with the relevant agencies.
3. Summary Review Process: A summary review process will apply if the aggregate amount of the investments in a given project in Mainland China does not exceed US$50 million, or if the aggregate amount exceeds US$50 million but the application is not subject to special review.
4. Significant investment applications are no longer subject to policy review. A committee composed of market players, scholars and governmental officials will review these applications in terms of key technologies.