Newsletter
APPROVAL REQUIRED FOR FOREIGN INVESTORS' SINGLE PURCHASE OF 10% SHAREHOLDING IN LISTED COMPANIES
On 4 March 2008 the Investment Commission (IC) of the Ministry of Economic Affairs (MOEA) passed a resolution stating that because there are no longer limits on the inward remittance by overseas Chinese and foreign nationals for investment in the companies listed on the Taiwan Stock Exchange, or the GreTai Securities Market or its emerging stock boards, the required approval by the IC for a single investment of US$50 million or more in a listed company is repealed.
Instead, with effect from 1 April 2008, if a foreign investor acquires 10% or more of the shareholding of a listed company in a single investment, it must apply with the IC, the relevant Science Park Administration or the Export Processing Zone Administration of the MOEA. They in turn should request the Securities and Futures Bureau (SFB) of the Financial Supervisory Commission or the regulatory authority for the industry concerned to provide an opinion as to whether, in terms of proportional shareholding, the application complies with the relevant provisions of the Securities and Exchange Act, the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and other relevant regulations. The IC (or other competent authority) should then approve or reject the application on the basis of the opinion provided. Detailed implementation rules of the above resolution are to be worked out in consultation between the SFB and the IC.
In the past, if a foreign investor invested less than US$50 million in a listed company, in principle it was not required to obtain permission from the IC, regardless of what percentage of shareholding it acquired. However, in the future a 10% shareholding will be taken as the threshold for whether an investment requires regulatory approval. Therefore if a foreign investor wishes to invest in 10% or more of the shareholding in a listed company, the investor will need to seek permission from the regulatory authority even if the sum to be invested is less than US$50 million.