Negative List for Investment by Overseas Chinese and Foreign Nationals to be abolished in response to the impact produced by the WTO accession

To decrease the impact on Taiwan produced by the Mainland China investment in Taiwan via third areas, the ruling party and the opposition parties of Legislative Yuan negotiated about the “Draft of Amendments to Part of the Statute for Investment by Overseas Chinese” and the “Draft of Amendments to Party of the Statute For Investment by Foreign Nationals” on January 15, 2002. They decided to delete the current Negative List for Investment by Overseas Chinese and Foreign Nationals and increase the system of declaring Mainland China investment and the ultimate beneficiary, except that the amount of foreign investment doesn’t exceed one million NT dollars.

The competent authority may ask the investor who applies for investment to report in the application form the rate of capital coming from Mainland China to strengthen inspection of Mainland China capital invested in Taiwan via a company in a third area.  Or, if the amount of investment exceeds the amount prescribed by the competent authority, the competent authority may order the investor to declare the ultimate beneficiary except that the amount of investor’s investment doesn’t exceed one million NT dollars, and the shares held by the investor in the invested enterprise are less than 10% of the total number of shares, or the investor’s capital is less than 10% of the enterprise’s capital. The Statute will also increase penal clauses with regard to investors’ investment in securities.  If foreign investment in local securities obviously suffices to affect the prices of securities and the market order, or is likely to damage public welfare, the investor may be imposed on a fine of not less than NT$120,000 but no more than NT$600,000. If the foreign investment is still not rectified, the competent authority may successively impose a fine of not less than NT$240,000 but no more than NT$1,200,000 on the investor until rectification is made.

Source: Commercial Times 01/16/2002