TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
2. Jurisdiction 2.1 Notification If any of the filing thresholds is met, a notification is compulsory. A notification is not required in the following circum - stances even if the filing thresholds are met: • where an enterprise or its 100% held subsidi - ary combines with another enterprise in which it already holds 50% or above of the voting shares or capital contribution; • where enterprises of which 50% or above of the voting shares or capital contribution are held by the same enterprise combine; • where an enterprise assigns all, or a substantial part of, its business or assets, or all or a substantial part of its business that could be separately oper - ated, to another enterprise to be newly established and wholly owned by the former enterprise (please note that “substantial part” is not further defined under the TFTA and should thus be judged on a case-by-case basis); • where an enterprise redeems its outstanding shares in order to convert them into treasury stock or because of minority shareholders’ exercise of appraisal rights, causing the other shareholders’ shareholdings to be increased to one-third or more of the voting shares in the enterprise; or • where a single enterprise reinvests to establish a subsidiary and holds 100% of the shares or capital contribution of such subsidiary. On 18 July 2016, a ruling was promulgated by the TFTC to exempt the following types of transactions from the requirement to make a filing: • an enterprise merging with another enterprise that is under the control of or subordinate to the latter enterprise; • an enterprise merging with another enterprise where both are under the control of the same con - trolling enterprise; • an enterprise transferring its part of (or the entirety of) the voting shares or capital contribution of a third enterprise to another enterprise that is under
more in Taiwan for the relevant products or ser - vices; or • where the enterprise being combined generates no Taiwan revenue. To correspond with such amendments, the TFTC concurrently amended the Merger Guidelines and repealed the Taiwan Fair Trade Commission Disposal Directions (Guidelines) on Extraterritorial Mergers (“Guidelines on Extraterritorial Mergers”). Thereafter, except for the non-notifiable types of combination, an extraterritorial combination that meets any of the filing thresholds must be notified to the TFTC in accordance with the TFTA, and the waiver of jurisdiction will no longer be applicable. 1.2 Legislation Relating to Particular Sectors The Guidelines on Extraterritorial Mergers used to be the relevant legislation for merger filings related to for - eign mergers, under which the TFTC took the local effect into consideration when determining whether it will exercise jurisdiction. However, the Guidelines on Extraterritorial Mergers were repealed by the TFTC on 30 June 2023; please see 1.1 Merger Control Legisla- tion for details. In Taiwan, there is no other legislation for mergers relating to particular sectors. However, under several of the TFTC’s guidelines on sectoral control of certain industries affecting public welfare, such as airlines, banking/finance or 4C industries, certain specific factors will be taken into account by the TFTC when reviewing a merger involving that particular industry. 1.3 Enforcement Authorities The TFTC is the competent authority enforcing the TFTA. It is the regulatory body responsible for the exe - cution of the TFTA, and also the agency that interprets the TFTA by rulings, and stipulates the enforcement rules and relevant regulations of the TFTA. The TFTC may seek comments from other authorities during the review process but has the final say on its own deci - sion.
632 CHAMBERS.COM
Powered by FlippingBook