2014-01-16
The Financial Supervisory Commission (FSC) has issued a ruling opening the public purchase by foreigners and overseas Chinese of shares of foreign companies carrying out primary listings on Taiwan’s stock, over-the-counter, or GreTai markets (F shares). This relaxation will allow foreign companies to enjoy the same treatment as local ones, and will attract foreign investment and boost the liquidity of foreign shares listed in Taiwan.
The FSC points out that under the original regulations, foreigners and overseas Chinese were allowed to purchase stocks listed on the stock and over-the-counter markets, but their purchase of F shares was not explicitly permitted. The ruling stipulates that they will now be able to purchase, in accordance with the provisions of the Regulations Governing Public Tender Offers for Securities of Public Companies, shares of foreign firms carrying out primary listings on Taiwan’s markets.
The Investment Commission, a unit of the Ministry of Economic Affairs, notes that companies carrying out primary listings in Taiwan are all registered overseas and are not domestic legal persons. The purchase of F shares by foreigners is, by nature, the purchase of a foreign company by a foreign company; it does not fall within the scope of the Statutes for Investment by Overseas Chinese and Foreign Nationals, and so no application to the Investment Commission is necessary. If, however, a foreign company has established a branch or subsidiary in Taiwan and has registered with the Investment Commission, then it will have to comply with the regulations governing investment by overseas Chinese or foreign nationals.
The Investment Commission further points out that a lot of overseas Taiwanese companies return to issue F shares in Taiwan. If such a company’s parent firm previously remitted capital for investment in the overseas company, and the overseas company that has listed on the Taiwan market is acquired by another company, then the parent company must send the facts of the purchase to the Investment Commission for reference and for cancellation of the amount of overseas investment.
Source： Council for Economic Planning and Development
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