TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
the control of or subordinate to the latter enter - prise; and • 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 the control of the same controlling enterprise. On 28 June 2023, the TFTC promulgated amendments to the “Combination Types to Which Paragraph 1, Arti - cle 11 of the Taiwan Fair Trade Act Does Not Apply” by adding an additional “non-notifiable/exemption” type of combination of joint ventures; please see 1.1 Merger Control Legislation for details. To correspond with its amendments to the Merger Guidelines, the TFTC concurrently repealed the Guide - lines on Extraterritorial Mergers. Thereafter, except for 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. 2.2 Failure to Notify Failing to notify a combination that meets a filing threshold may cause the TFTC to impose penalties, including the prohibition of the combination, divesti - ture, transfer of the business acquired, and/or removal of personnel designated by the enterprises if the TFTC discovers such violation. The TFTC is also author - ised to impose an administrative fine of between TWD200,000 and TWD50 million. Penalties imposed on parties for violating merger control rules will be published by the TFTC. Pub - licly available information indicates that the TFTC imposed two sanctions between 2024 and March 2025 for failure to notify a combination that met the filing thresholds under the TFTA. Both cases involved local transactions, and the TFTC fined each enterprise TWD200,000. 2.3 Types of Transactions According to the TFTA, a transaction that falls under the definition of a “combination” and also meets cer - tain thresholds prescribed by the TFTA requires a notification to the TFTC in advance. According to the TFTA, a “combination” is broadly defined to include:
• a merger; • the holding or acquisition of one-third or more of the voting shares of, or interest in, another enter - prise; • a transfer or lease of the whole, or a substantial part, of an enterprise’s business or assets; • a contractual arrangement with another enterprise for joint operation on a regular and ongoing basis, or the management of another enterprise’s busi - ness on a contract of entrustment; and • direct or indirect control over the business opera - tion or personnel management of another enter - prise – whether “control” exists should be evalu - ated on a case-by-case basis since there is no definitive definition thereof. Internal restructuring or reorganisation, under certain circumstances, may fall into the exceptions under the TFTA and be exempted from a filing obligation; please refer to 2.1 Notification for details. An operation that does not involve the transfer of shares or assets (eg, shareholders’ agreements, contractual arrangements on joint business operation) will constitute a combina - tion only if it falls under the combination defined under one of the last two points set forth above. 2.4 Definition of “Control” Whether “control” exists is not defined under the TFTA, and should thus be evaluated on a case-by- case basis. The acquisition of a minority shareholding or other interests amounting to less than control will constitute a combination only if it falls under the combination defined under the second, fourth or fifth points set Under Article 11 of the TFTA, there are both turnover filing thresholds and market share filing thresholds. On 21 January 2026, the TFTC passed amendments to the “Thresholds and Calculation of Sales Amount which Enterprises of a Merger shall File”. The amend - ments raise the turnover threshold for merger filings to accommodate economic growth and market scale changes in Taiwan, reduce the filing burden on busi - nesses, and loosen regulatory restrictions. Following forth in 2.3 Types of Transactions . 2.5 Jurisdictional Thresholds
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