TAIWAN Trends and Developments Contributed by: Susan Lo, Chi Lee and Evelyn Shih, Lee and Li Attorneys-at-Law
Together, these trends and developments underscore Taiwan’s evolution from a manufacturing hub to a stra - tegic global partner in the semiconductor industry, actively shaping its future through cross-border col - laboration. Realignments in Taiwan’s Retail Sector: Indicators of Market Maturity and Investment Sophistication In 2025, Taiwan’s retail and department store sectors have witnessed significant portfolio adjustments by their long-standing Japanese investors. It is generally understood that these moves reflect not a withdraw - al, but a strategic recalibration aligned with evolving global investment priorities. Two recent transactions, namely Itochu Corporation’s partial divestment from Taipei 101 and Isetan Mitsukoshi’s share sale in Shin Kong Mitsukoshi Department Store, demonstrate how well-structured JV and deal frameworks can facilitate smooth transitions while preserving asset perfor - mance and market confidence. Itochu Corporation’s share transfer in Taipei 101 In early 2025, Japan’s Itochu Corporation reduced its stake in Taipei 101 from 32.14% to 17.27%, transfer - ring shares to a consortium of six Taiwanese state- backed financial institutions. The TWD9.45 billion transaction significantly increased domestic insti - tutional ownership, with public sector entities now holding approximately 70% of the landmark asset. The divestment was executed against a backdrop of record financial performance, with TWD23 billion in retail revenue and TWD2.57 billion in net profit in 2024, signalling the strength of the underlying asset and the effectiveness of the transaction structure in enabling a seamless ownership transition. Isetan Mitsukoshi’s share sale in Shin Kong Mitsukoshi Department Store In June 2025, Japan’s Isetan Mitsukoshi Holdings sold over 20% of its stake in Taiwan’s Shin Kong Mit - sukoshi Department Store, its largest overseas retail investment. The decision was generally understood to have been influenced by several factors: • recently heightened geopolitical risk assessments related to Taiwan;
• pressure from foreign shareholders to rebalance exposure to high-return but higher-risk markets; and • a desire to step back from internal governance disputes within the Shin Kong Group. At the same time, a weaker yen has amplified for - eign investors’ influence in Japan, prompting calls for capital redeployment. Despite Shin Kong Mitsukoshi Department Store’s strong profitability (over TWD2 billion annually), the divestment allowed Isetan Mit - sukoshi to realise a fourfold return while simplifying its regional exposure. Overall, the divestment proceeded smoothly, supported by well-structured JV arrange - ments that enabled a clean and dispute-free exit. Key observation for international investors and advisers These recent developments in Taiwan’s retail sector exemplify a sophisticated evolution in foreign invest - ment strategy. For international market players, these trends highlight the value of flexible structuring, strong local partnerships and long-term strategic alignment in navigating one of Asia’s most resilient and dynamic markets. Recent Court Decisions on JV-Related Disputes The following summaries highlight a few recent key judgments by the Taiwan High Court concerning JV agreements, focusing on the interpretation and enforceability of non-compete clauses and the princi - ple of contractual privity, such as how JV agreements are applied – particularly regarding post-termination restrictions, pre-existing business carve-outs and the binding nature of agreements on non-signatory par - ties. Taiwan High Court 113-Shang-Zi No 141 The court interpreted a non-compete clause in a JV agreement between two parties who co-founded a biotech company. The clause prohibited either party from engaging in competing business for two years post-termination. The court held that the restriction only applied to business activities that the JV com - pany was legally permitted to conduct. Since the defendant’s post-termination activities did not fall within that scope, the defendant’s activities did not violate the non-compete obligation, and no damages
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