Conditions Relaxed for Taiwan Listing by Overseas Enterprises

    In line with its effort to build Taiwan into an Asia-Pacific funding center and promote Taiwan stock-market listing by foreign companies, the Executive Yuan recently passed the “Program for the Relaxation of Taiwan Stock-market Listing by Overseas Enterprises and the Opening of Mainland Chinese Investment in the Taiwan Stock Market” as proposed by the Financial Supervisory Commission (FSC). The program eases qualifications for foreign companies listing on the Taiwan stock market and relaxes restrictions on the use of resulting funds, and opens investment in the Taiwan stock market by qualified Chinese institutional investors.
The FSC notes that the liberalizing measures include elimination of the ban on stock and over-the-counter market listing in Taiwan by overseas enterprises with investments in mainland China that exceed a set ratio of their net worth, and on the investment in mainland China of funds raised in Taiwan. A revision of Article 73 of the Act Governing Relations Between Peoples of the Taiwan Area and the Mainland Area, by the Mainland Affairs Council, will determine how enterprises in which mainland Chinese investors hold more than 20% of the shares or have an important influence will be handled.
The restrictions on secondary listings on Taiwan’s stock and over-the-counter markets by overseas enterprises are greatly relaxed, and the ban on listing by companies with more than 20% shareholding or major influence by mainland Chinese shareholders is eliminated.
Qualified mainland Chinese institutional investors are now able to invest in Taiwan’s stock and futures markets under the same conditions as foreign institutional investors. Under the mainland’s rules, however, investment in areas with which no memorandum on cooperation has been signed is limited to 3% of the net value of the investors’ funds. This ceiling will be raised if an MOU is signed between Taiwan and the mainland.

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