Those seeking to conclude an M&A deal in the Special Municipality of Taiwan should keep in mind that the country has no specific rules about filing deadlines. However, a notification must be filed thirty days prior to the commencement of an M&A transaction. Penalties for missing a deadline include fines from seven thousand to two million dollars (for each violation).
Registration is required for:
- all entities involved in a transaction;
- a company acquiring no less than ⅓ of stocks ir capital of another company;
- a controlling entity directly or indirectly hiring/firing of another company’s staff;
- individuals or groups owning more than a fifty percent stake in a company or investing in an umbrella company.
Taiwanese subsidiaries of foreign companies are required to file a notice, too. There’s no application fees to be paid.
M&A in Taiwan: Obtaining Approval
A transaction is deemed to have taken effect after a notice has been filed & reviewed by the regulator (FTC). Please note that the 30-day wait period may be extended (by no more than sixty days) by sending a written notification to the regulator. If no extension is requested & the regulator has no objections to an M&A transaction, it’s deemed approved. Sometimes, the wait time may be reduced if there’s no compelling reason to object to a transaction. The FTC may not allow parties to initiate an M&A transaction in the Special Municipality of Taiwan if a notice contains false/misleading information.
Purchasing a Taiwanese company without obtaining the regulator’s approval is punishable by a fine.
Concluding an M&A deal in the Special Municipality of Taiwan requires participants to include the following information in their notice:
- an application form describing a transaction & participants; the date of completion, contact info & location of participants, IDs of attorneys, PoA (if necessary)
- basic information about each company (e.g. number of employees, turnover for the previous fiscal year, total capital);
- balance sheet & P&L statement for the previous year;
- transaction-related documents;
- reports on production & operating costs;
- benefits of a transaction for a country's economy, including information on market shares & competitors;
- business plans;
- investment statuses;
- latest financial statements (for companies listed on stock exchanges);
- market structure;
- documents required by the FTC (if necessary);
- contractual documents (when establishing a holding company in the Special Municipality of Taiwan by way of an M&A) .
An administrative fine of no less than four thousand & no more than thirty five thousand dollars may be imposed for providing false or misleading information in any of the above documents. Also, participants may face penalties for violating the FTA agreement.
Conducting an M&A transaction in the Special Municipality of Taiwan can be divided into several stages, namely:
- sending a notice to the FTC;
- reviewing a notice for compliance with regulatory thresholds;
- issuing a letter If violations are detected
- sending a request for additional information (if more documents are necessary);
- presenting a case to the FTC meeting,
- making a final decision on rejecting or extending the review period.
Please note that a notice of a transaction & request for public opinion regarding a transaction must be posted on the regulator's website.
Considering concluding an M&A deal in the Special Municipality of Taiwan? Need advice on M&A regulation in the Special Municipality of Taiwan? Why not contact IQ Decision UK?