2019-01-28

Foundation Act has a Non-retroactive Maximum Shareholding Provision

The Foundation Act (the “Act”) was promulgated on 1 August 2018 and will take effect on 1 February 2019.  The stringent regulations bring significant changes to the organization and operation of foundations, and replaces the relatively relaxed supervision as is created by the Civil Code.  Reformers consider it a necessary approach to combatting crimes hidden behind the veils of “public interest”, while the Act simultaneously triggers tensions among existing foundations, which complain that they have no idea how and/or to what extent that they need to comply with the Act.
 
In response to these complaints, the central relevant authority, the Ministry of Justice (the “MOJ”), recently issued clear explanations regarding the following matters:
   
In addition, the MOJ indicated that existing foundations must revise and amend their charters of endowment to comply with the applicable regulations.  Accordingly, existing foundations must:
   
In view of the above changes, the MOJ will allow a one-year buffer period for foundations to make compliance adjustments.
 
(For more information regarding the Act, please visit the following link: https://law.moj.gov.tw/ENG/LawClass/LawAll.aspx?pcode=I0020030
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