TAIWAN Law and Practice Contributed by: Derrick Yang, Judy Lo and Yu-Ting Su, Lee and Li Attorneys-at-Law
3.4 Timing of Notification and Standstill Obligations Merger filings (if required) are usually filed after the parties’ board of directors approves the transaction or the signing of a definitive agreement, as the FTC requires evidence of intent to proceed with the review. The parties must maintain a standstill after filing and are prohibited from closing the transaction until they receive clearance from the FTC. The FTC’s review period typically lasts 30 business days but may be shortened or extended by written notice for up to an additional 60 business days. If the FTC neither objects, extends nor issues a decision within this timeframe, the parties may proceed with closing, unless an exception applies (such as an agreement to further extend the review period or the provision of false or misleading information). Implementing the transaction before obtaining merger clearance may result in penalties, including prohibi - tion of the combination, divestiture or transfer of the acquired business, removal of designated personnel, and/or administrative fines ranging from TWD200,000 to TWD50 million. 3.5 Exemptions and Simplified Procedures Certain types of business combinations are exempt from merger filing requirements, regardless of whether the filing thresholds are met. Examples of such exemp - tions include mergers with or between controlled sub - sidiaries, intra-group restructurings, and joint ventures established or operated by foreign businesses outside Taiwan that have no economic activities within Taiwan. Simplified procedures may apply in certain cases, such as transactions involving low market shares (eg, horizontal mergers with a combined post-merger mar - ket share below 20%, or below 25% if one party’s share is under 5%, as well as vertical mergers with a combined market share below 25%). Simplified pro - cedures may also apply in cases with limited ties to Taiwan, such as when the relevant Taiwan revenue is below TWD200 million, the target had no Taiwan rev - enue in the previous fiscal year, or an extraterritorial transaction is valued below TWD2.5 billion.
Notwithstanding the above, the FTC may still require a full review for reasons such as public interest or high entry barriers. 4. Merger Control – Procedure and Substantive Assessment 4.1 Review Phases and Timelines After receiving the initial merger filing, the FTC may issue a Request for Information letter to obtain addi - tional details or clarifications. Once all required infor - mation has been submitted and the filing is deemed complete, the 30-business-day review period will begin. If the FTC raises no objections within this peri - od and no extension applies, the parties may proceed with the merger. Depending on the circumstances, the FTC may either shorten the review period or extend it up to 60 additional business days by written notice, if necessary. 4.2 Information Requirements and Pre- Notification The parties must submit the following information to the FTC in a merger filing, using the FTC’s standard form: • basic information of the parties; • production and sales data for the past three years in Taiwan; • market structure and horizontal competition infor - mation; • upstream and downstream market information; • transaction details; • relevant market description; • entry barriers in the relevant market(s); • economic analysis; and • information on their local investments in Taiwan. Key supporting documents include the parties’ finan - cial reports, the definitive agreement or board resolu - tions, a power of attorney (if local counsel is engaged for the filing) and the latest certificate of incorpora - tion. All filings must be submitted in the Chinese language; documents originally drafted in a foreign language must be fully translated or accompanied by an excerpted translation. The FTC may also request additional information if deemed necessary.
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