萬國法律事務所

The Memorandum of Understanding on Cross-Strait Financial Supervision (“MOU”) will come into force on January 16, 2010. Its possible impacts on both the local and global markets have attracted the attention of the public.

After said MOU comes into effect, the representative offices of seven Taiwanese banks in PRC, which have been established for up to 2 years, may be upgraded to branches of the banks. In addition, the government is working on the policy to allow PRC banks to directly establish branches in Taiwan without having to first set up representative offices in Taiwan. Under the current Taiwanese regulations, foreign banks are so permitted.

According to the current regulations on PRC investments in Taiwan, the banking business is not a permitted industry. If the government ultimately decides to allow PRC banks to establish branches or representative offices in Taiwan, relevant regulations would need to be amended. Relevant government agencies are currently working on such amendment.

Many PRC banks have expressed strong interest in developing their business in Taiwan. However, due to the difference in scale between the Taiwan and the China markets, the number of the PRC banks allowed in Taiwan will be strictly limited to only one to three banks in the initial stage. Among those banks interested in setting up branches in Taiwan, the Bank of China and the Bank of Communications are reported to be considered top choices by the PRC government.