TAIWAN LIBERALIZES BUSINESS REGISTRATION
Taiwan’s Ministry of Economic Affairs recently revised the Business Registration Law in order to permit companies to operate with greater degree of flexibility. As such, companies in Taiwan will in the future be permitted to operate in addition to the businesses for which they are registered and have obtained authorization, any other business not prohibited or restricted by law. Taiwan’s Executive Yuan has already approved the draft revision and has forwarded it this past October to the Legislative Yuan for further deliberation.
In the new revision the original provision in the Business Registration Law that prohibits companies from operating outside the scope of their registered business has been deleted, thus permitting companies to conduct other businesses as well. Additionally, as a company’s responsible person or partner has unlimited responsibility for the business, the provision in the current Law requiring a company’s capital to be audited and certified by a CPA has also been deleted. Under the revised Law, such auditing will be performed by the relevant agency in the location where the business is situated. It is expected that this will greatly decrease operating costs of businesses.
The revised Law also aims to spark growth in the tourism industry by providing that home-stay facilities need not apply for business registration. Taiwan’s Statute for the Development of Tourism provides that families can utilize empty rooms in their houses to provide tourists accommodation in a rural setting where they can enjoy the local culture and natural scenery. The revised Law deems home stays a family sideline business that need not obtain a business registration.
Under the new revision, when a company’s business operations transgress the laws or regulations covering its industry, the relevant authority may penalize the offending company by ordering it to cease operations. After such an order is finalized, authorities shall annul the company’s business registration or a portion of the items on the registration.
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