Proposed Comprehensive Debt Resolution Law in Taiwan

Taiwan's Judicial Yuan recently completed a draft Debt Resolution Act aiming at a comprehensive revamp and integration of the various pieces of existing and/or proposed insolvency legislation. The draft law, integrating the existing Insolvency Act, corporate reorganization regulations (currently provided by the Company Act), as well as yet another draft Enterprise Reorganization and Bankruptcy Act proposed by the Ministry of Economic Affairs. The comprehensive draft law will cover not just natural persons and juridical persons, but also public juridical persons and unincorporated entities, covering the aspects of reconciliation, bankruptcy, reorganization, and even recognition of a foreign court’s debt resolution proceedings, among others. The draft law provides two types of proceedings to resolve debts and revive debtor’s creditability, i.e., the rehabilitation and the liquidation procedures. In the future, those who file for bankruptcy or rehabilitation must pay an official fee of NT5,000 whereas it is no filing fee today. In the meantime, the draft law will step up criminal sanctions to curb dishonest and/or even fraudulent activities in connection with the use of the bankruptcy or restructuring procedures.