FSC Further Relaxes Restrictions on Cross-Strait Financial Business

         The Financial Supervisory Commission (FSC) responded to the needs of cross-strait economic relations by promulgating, on March 3, a revision of the Regulations Governing Permission for Financial Relations between the Taiwan Area and the Mainland Chinese Area, which contains three new mechanisms: a relaxation of items of remittance to mainland China by designated foreign exchange banks; a readjustment of restrictions on loans to Taiwanese enterprises in mainland China by offshore banking units (OBUs) and foreign branches; and the opening up of the establishment of representative offices in mainland China by the overseas subsidiary banks of financial holding companies.

　　To make the flow of funds between the two sides of the Taiwan Strait more flexible, in the revision the FSC has raised the ceiling on outstanding loans to Taiwanese businesses in mainland China from the original 30% of net assets to 30% of the net assets of an OBU plus its overseas branches, thereby expanding the base of loan calculation. Unsecured loans, however, may not exceed 10% of the total amount. At the same time, the revision allows the overseas subsidiary banks of financial holding companies to establish representative offices banks in the mainland.

　　The revised regulations add five items of remittance to mainland China: (1) the remittance back by the overseas and mainland Chinese subsidiaries of Taiwanese companies of stock dividends and profits, but the inward can not be over the outward remittance, (2) remittances back for exports from the mainland China, (3) remittances of overhead expenses by representative offices in mainland China, (4) remittances of expenses for tourist travel in mainland China, and (5) remittances of income earned in Taiwan, and remaining capital, by individual mainland Chinese, persons without Taiwan resident certificates or alien resident certificates, and persons with resident certificates who have resided in Taiwan for less than one year; the remittances, however, are limited to US$100,000 each. For more details, please visit this website: http://www.fscey.gov.tw/ct.asp?xItem=219901&ctNode=17.

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