TAIWAN Law and Practice Contributed by: Lihuei Mao, Dennis Yu and David Tien, Lee and Li Attorneys-at-Law
examine whether a foreign investment fund should be deemed a PRC investor.
• if, as a result of such combination, any of the par - ticipating enterprises will acquire at least a third of the market share; • if any of the enterprises participating in the com - bination holds a market share of at least a quarter before the combination; or • if the preceding fiscal year’s turnover of the partici - pating enterprises exceeded the amount set forth by the TFTC, as follows: (a) the aggregate global turnover of all the partici - pating enterprises exceeded NTD40 billion and at least two of the participating enterprises had a turnover in Taiwan of at least NTD2 billion; (b) for a combination among non-financial enter - prises, one of the participating enterprises gen - erated a turnover in Taiwan of at least NTD15 billion, while the other participating enterprise generated a turnover in Taiwan of at least NTD2 billion; or (c) for a combination between financial enter - prises, one of the participating enterprises generated an annual turnover of at least NTD30 billion, while the other participating enterprise generated an annual turnover of at least NTD2 billion (such turnover should be calculated on a group-wide/consolidated basis). Particular Sectors and Foreign Mergers 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 cer - tain industries affecting public welfare (eg, airlines, banking/finance or 4C industries), certain factors will be taken into account by the TFTC when reviewing a merger involving that particular industry. For the filings for foreign mergers, the relevant legis - lation used to be the Taiwan Fair Trade Commission Disposal Directions (Guidelines) on Extraterritorial Mergers – pursuant to which, the TFTC took the local effect into consideration when determining whether it would exercise jurisdiction. Since the abolition of such guidelines by the TFTC on 30 June 2023, except for the non-notifiable types of combination, a foreign merger 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.
6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview Merger control in Taiwan is regulated by the Taiwan Fair Trade Act (TFTA) and the competent authority is the Taiwan Fair Trade Commission (TFTC). Supple - mentary rules on merger control include: • the Enforcement Rules of the TFTA; • the Directions for Enterprises Filing for Mergers; • the Taiwan Fair Trade Commission Disposal Direc - tions (Guidelines) on Handling Merger Filings (the “Merger Guidelines”); and • the Guidelines on the Provision of Pre-Filing Con - sultation Service. Requirements for Notification If an FDI involves a transaction that falls under the definition of a “combination” and also meets certain thresholds as prescribed by the TFTA, a prior noti - fication (merger filing) to the TFTC will be required. According to the TFTA, “combinations” include: • mergers; • holdings or acquisitions of at least a third of the voting shares of or interest in another enterprise; • transfers or leases of all or a substantial part of an enterprise’s business or assets; • having an arrangement with another enterprise for joint operation on a regular, ongoing basis, or the management of another enterprise’s business based on a contract of entrustment; or • having direct or indirect control over the operation or personnel of another enterprise. Whether “control” exists should be evaluated on a case-by-case basis, given that there is no definitive definition thereof. Notification will be required for a combination in the following circumstances:
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