Limitation on Investment by Overseas Chinese to be Relaxed by a Wide Margin and Share Exchange to be Permitted

    In order to cope with such financial investment models as share exchange and exchange of loans for stock as deriving from the Banking Holding Company Act and the Enterprise Merge and Acquisition Act, the Ministry of Economic Affairs decided to relax the limitation on the investment by Overseas Chinese in Taiwan, approving that foreign companies may invest in Taiwan-based companies by means of exchange of loan for stock and share exchange and may transfer their shareholding in the Taiwan-based companies to others freely in foreign countries without applying for prior approval.

    Reportedly, the Ministry of Economic Affairs has defined in the Draft of Rules Governing Capital Amount Invested by Overseas Chinese and Foreigners that the Taiwan and foreign companies which apply for merger, division, transferring shares or restructuring creditor’s right shall provide the deed of merger or contract of share transfer, in addition to the written opinion issued by an independent expert, to meet the requirement for the share exchange.

Source: Economic Daily News 09/19/2002