2021-12-13

Chinese Funds Figureheads May be Fined NTD 15 Million Once Amendments Become Law

Recently, Taiwan's Mainland Affairs Council (“MAC”) has twice announced amendments to the Act Governing Relations between the Peoples of the Taiwan Area and the Mainland Area (the “Act”).  Said amendments include a requirement for pre-approval for key technical personnel traveling to China and increase the penalties that may be imposed on those acting as figureheads for Chinese funds entering into Taiwan.  Once the amendments are enacted, the maximum penalty for acting as figureheads for Chinese funds may be up to three years imprisonment or criminal detention with an NTD 15 million fine, which is significantly heavier than the original one year imprisonment or criminal detention with an NTD 150,000 fine.
 
According to MAC, these amendments are a response to several illegal behaviors discovered in recent years.  It has been observed with increasing frequency that Chinese funds enter into Taiwan disguised as deriving from other personnel or third countries.  These illegal funds are used not only to conduct business in Taiwan, but also are applied to solicit talent in the technology industry away from Taiwan.  With opinions from other relevant departments, it was deemed essential to stop such illegal behavior through amendments to the Act 
 
MAC also emphasized that to efficiently maintain stable development of the Taiwan capital market and the economic order and to cultivate the leading advantage of the technology industry, rules managing Chinese enterprises and funds entering into Taiwan will continue to be strengthened in the future, as necessary.
 
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