Newsletter
MOF CONDITIONALLY PERMITS THE ESTABLISHMENT OF OBUs BY FOREIGN BANKS WITHOUT TAIWAN BRANCHES
The Enforcement Rules of the Statute for Operation of Offshore Banking Units (OBUs) was partially amended by the Ministry of Finance (MOF) on March 19 to conditionally permit the establishment of OBUs by foreign banks without Taiwan branches. Article 4 of the Enforcement Rules provides that foreign banks applying to do so must meet the following five conditions:
Have committed no major violations of regulations nor had any record of misconduct within the past five years.
Have ranked within the top 500 banks in the world in terms of capital or assets in the year preceding application, or have had transactions of more than US$1 billion with Taiwan banks and major enterprises during the preceding three fiscal years, of which at least US$180 million was in medium- and long-term credit extensions.
Have a bank of international settlement (BIS) ratio in conformity with MOF regulations.
Have obtained approval by the financial authorities of the parent country to establish an OBU in Taiwan and their agreement to cooperatively share responsibility with Taiwan for its oversight and administration.
The head office and the financial authorities of the parent country must have the capacity to exercise comprehensive supervision and administration of the OBU.
In terms of restrictions on business operations, OBUs are still not permitted to invest in stocks, nor are they permitted to invest in securities issued, accepted, or guaranteed by companies in which responsible persons of the bank serve as directors or supervisors.