TAIWAN Law and Practice Contributed by: Lihuei Mao, Dennis Yu and David Tien, Lee and Li Attorneys-at-Law
Lee and Li, Attorneys-at-Law 8F No 555 Sec 4 Zhongxiao E Rd Taipei 11072 Taiwan
Tel: +886 2 2763 8000 Fax: +886 2 2766 5566 Email: attorneys@leeandli.com Web: www.leeandli.com/TW
1. Legal System and Regulatory Framework 1.1 Legal System
To provide clear guidelines on restricted and/or pro - hibited foreign investment, the DIR has promulgated the “Negative List”, which sets forth the sectors in which foreign investment is either restricted or pro - hibited. Sectors that are not on the Negative List are open to foreign investment without any restriction (other than the requirement to obtain foreign invest - ment approval in advance). PRC Investors However, it is important to note that investors from the PRC are subject to different, stricter rules and regulations, as well as greater regulatory scrutiny. PRC investors may only invest in certain permitted businesses listed in the “Positive List” promulgated by the DIR. In determining whether an investor is a foreign investor or a PRC investor under Taiwan law, the criteria outlined in 7. Foreign Investment/National Security will apply. 2. Recent Developments and Market Trends 2.1 Current Economic, Political and Business Climate In recent years, the Taiwan government has put a lot of effort into attracting FDI into Taiwan by providing subsidy programmes for certain key industries, such as renewable energy and AI technologies. Moreover, discussions are underway regarding the promulgation of certain guidelines and regulations to mitigate the
Taiwan is a civil law jurisdiction, with the judicial power vested in the judges of the district courts, high courts and supreme courts, which handle civil, criminal and administrative lawsuits. The judge is responsible for directing the proceedings, investigating the evidence, finding the facts and determining the legal conse - quences (such as assessing damages). In general, the judicial system is governed by the rule of law and considered to be impartial and just. 1.2 Regulatory Framework for FDI Taiwan welcomes and encourages foreign direct investment (FDI). Under the Statute for Investment by Foreign Nationals (SIFN), which was promulgated on 14 July 1954 and further amended on 19 Novem - ber 1997, all foreign investment must be approved in advance by the Department of Investment Review (DIR) (formerly known as the Investment Commission) of the Ministry of Economic Affairs (MOEA). Prohibited or Restricted Sectors FDI is generally permitted in Taiwan, except in certain specific businesses and industries in which foreign investments are prohibited or restricted – such as avi - ation and telecommunications – owing to concerns about national security, public order, environmental protection and public health, etc.
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