Procedures for Foreign Direct Investment to be simplified in Taiwan


January 29, 2013

The Executive Yuan has recently finalized a proposed amendment to the Foreign Investment Statute (the “Statute”) pending the passage by the Legislative Yuan.  The most recent amendment to the Statute was in November of 1997 and ever since there has been many changes to the economic environment both at home and abroad.  As such and to further increase Taiwan’s overall competitiveness in the area of foreign direct investment (FDI), an amendment was thus proposed to largely do away with the requirement of prior approval of an investment by the government and replace it with a filing subsequent to the investment being made, with limited exceptions where prior approval would still be required.  According to the Statute, these exceptions would include (i) any sectors the investment of which is restricted by law, (ii) the amount of a contemplated investment is over a certain threshold prescribed by the authority, (iii) cross-border merger of certain scale or type, and (iv) other types of investment proclaimed by the competent authority.

 

Unless a FDI project is within one of the exceptions as alluded to above, there would be no requirement of obtaining prior approval from the competent authority.  Depending on the whether the investment fund will be converted into New Taiwan dollars or not, a subsequent filing should be made within 2 months from the conversion of the investment fund into NTD or where the investment fund will not be converted into NTD, 6 months from the time the investment is made.  Furthermore, if the foreign investor is not a resident in Taiwan, a lawyer or a certified public accountant needs to be retained to make the advance applications for approval or subsequent filings.