Cross-straits ties will keep lawyers busy
December 18, 2008 | BY
clpstaff &clp articles &Doubts over extent of tech sector access
2009 will be an important year for Taiwan-mainland ties. The regions are expected to sign a financial industry memorandum of understanding early in the year, and business law will be the central focus.
Jackson Huang, partner of Formosa Transnational Attorneys at Law says there should be a surge in mainland investors into Taiwan after the memorandum is signed.
As well as opening the door to inflows of money from mainland China, the memorandum could also serve as a catalyst for reviving the entire Taiwan market.
Business co-operation, Huang says, is also expected to increase and demand for general business law practices, especially in investment, contract, and litigation will bring demand for related legal services. This will impact law firms in both Taiwan and the mainland. Lawyers in both regions should familiarise themselves with differences in law practices and court opinions between Taiwan and the mainland.
Huang says the Taiwan government will need to implement more laws and regulations to regulate and protect mainland Chinese who invest in Taiwan, reducing limits on ownership ceilings imposed on those investors.
Changes in both regions' policies are already becoming apparent. The mainland government's stimulus plan aims to increase Taiwanese inbound investment; other policies focus on helping Taiwanese companies to participate in infrastructure projects. According to Fan Liqing, spokeswoman of the State Council Taiwan Affairs Office, the policies will encourage more Taiwanese enterprises to invest in the service industry. Taiwan, at the same time, has decided to implement rules that allow mainland investors to invest in its equities through qualified domestic institutional investor funds.
Taiwan's technology industry offers great opportunities for investors, and could be the prime focus of interest. But not everyone agrees that Taiwan will want to fully open its strongest sector. Future M&A deals could threaten the industry, weakening Taiwan's global position.
“Taiwan cannot open the door fully,” says LiPu Lee, partner of Formosan Brothers Attorneys-at-Law. Taiwan, he says, must protect and retain its own economy and its own investment without relying on others.
“Otherwise all technology companies will move to the PRC, and Taiwan will have nothing to produce.”
(This article is part of the New directions for China in 2009 special feature)
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