Newsletter
OBU INVESTMENT AMOUNTS MUST BE CALCULATED TOGETHER WITH DBUS
A draft amendment to the Enforcement Rules of the Statute for Operation of Offshore Banking Units (OBUs) was completed by the Ministry of Finance (MOF) last November. The amendment increases the MOF's powers of financial inspection. In addition, it does not place a single limit on OBU investment business, but requires that it be calculated together with Domestic Banking Unit (DBU) business, and be subject to the ceiling stipulated by the Banking Law: 20% of the total amount of the deposits received by a bank and financial bonds issued by it.
The new version of the Statute for Operation of OBUs expressly deregulates the OBU business scope. It permits OBUs to handle underwriting and brokerage of foreign currency securities, and stipulates that all business transacted between OBUs and offshore corporations and individuals is tax-free. However, all business that could be transacted by DBUs but is transferred for handling to OBUs instead should still be taxed as DBU business.