New regulations governing investment in Taiwan by mainland enterprises

In recent years, overseas investment by mainland Chinese enterprises has been extremely brisk with the progressive intensification of the 'go global' policy. And, with the ever closer trade links between the two sides of the Taiwan Strait, an increasing number of mainland enterprises are opting to make direct investments in Taiwan. In June 2010, the two sides of the Taiwan Strait successfully executed the Economic Cooperation Framework Agreement (ECFA). This agreement officially entered into effect on September 12 2010. On January 6 2011, the Cross-strait Economic Cooperation Committee was officially established and is tasked with negotiating and guiding ECFA related matters.

Against the background of the actual acceleration of cross-strait economic and trade cooperation, the complementary laws and regulations on investment of the two sides of the Taiwan Strait have become the focus of attention of investors. On November 9 2010, the National Development and Reform Commission (the NDRC), the Ministry of Commerce and the Taiwan Affairs Office of the State Council (TAO) jointly issued the Measures for the Administration of Investment in Taiwan by Mainland Enterprises (the New Measures). The objectives of the New Measures are to “further encourage, guide and regulate direct investment in Taiwan by mainland enterprises, realise mutual benefits and a win-win situation for the economies on both sides of the Taiwan Strait and promote the peaceful development of the relationship between the two sides of the Taiwan Strait”.

This introduction will give an overview of the background to the issuance of the New Measures as well as the relevant conditions for the review of Taiwan investments and the preferential policies. Additionally, it will give a brief overview of Taiwan's procedures for the examination and approval of investments from the mainland.