萬國法律事務所

Taiwan’s Financial Supervisory Commission (FSC) recently held a conference to discuss the promotion of cross-straits business finance activities and has reached a preliminary consensus on the matter. Promotion discussions covered multiple aspects and the FSC will consider the opinions of entrepreneurs. After the Execute Yuan ratifies the amended regulations governing permission for domestic enterprises conducting specific businesses in China, the FSC will start promotions.

Promotions have primarily focused on banking, securities, and insurance. FSC will allow banks to offer customers investment in Renminbi. After Taiwan and China sign an agreement on currency trading, the Domestic Banking Unit shall be allowed to offer customers investments in Renminbi and build a platform for transactions in electronic money between Taiwan and China, and thus Chinese people will be able to purchase Taiwanese goods on the Internet.

Taiwan’s Securities and Futures Bureau (SFB) plans to allow securities firms to invest 100% in a venture capital (VC) subsidiary, then the VC subsidiary can again set up another VC subsidiary in China, and through the securities firm, Taiwanese people can invest in Chinese enterprises going public in Singapore, Hong Kong, or the U.S.

However, once a VC subsidiary encounters difficulties, a securities firm, as the mother company, will be seriously affected. Thus, there will be limitations, such as a securities firm will not be permitted to invest in a VC in an amount that exceeds 20% of its net value, and a VC may not invest in over 10% of the shares of a company that does not go public. The project will be executed before the end of March 2012.

China has recently permitted foreign insurance companies to sell compulsory car insurance in China. This is welcome news to Taiwanese entities, such as Cathay Century Insurance and Fubon Insurance, as both have already been conducting business in China.