TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
1. Legislation and Enforcing Authorities 1.1 Merger Control Legislation
this type of combination is exempted from the merger filing obligation prescribed under Article 11, Paragraph 1 of the TFTA. Nevertheless, the TFTC notes that a joint ven - ture that “is not engaging in economic activities within Taiwan” is not engaging in any economic activities that involve the supply and demand of goods or services in Taiwan’s domestic market. For example, the products produced by the joint venture are sold only outside of Taiwan or are sold exclusively to its foreign parent company, without affecting supply and demand in the Tai - wan market. Such ”economic activities” include the sale of goods or services, the provision of quotations, bargaining and the conclusion of sales, contracts or engagement with counter - parties in connection with the sale. Simplified Procedure Applies to More Types of Combinations In addition to the five types of combination spec - ified under Section 7 of the Merger Guidelines, the simplified procedure also applies to the fol - lowing four types of combination as they have a relatively lower impact on Taiwan’s domestic markets: • where the transaction value is below TWD2.5 billion; • in a horizontal combination, where the com - bined Taiwan revenues of the participating parties’ relevant products or services does not reach TWD200 million; • in a vertical combination, where none of the participating parties has generated TWD200 million or more in Taiwan for the relevant products or services; or • where the enterprise being combined gener - ates no Taiwan revenue.
The Taiwan Fair Trade Act (TFTA) is the rel - evant merger control legislation in Taiwan and was last amended on 14 June 2017, with the newly amended Enforcement Rules of the TFTA (“Enforcement Rules”) being announced on 7 April 2022. The supplementary rules on merger control include: • the Directions for Enterprises Filing for Merg - ers; • the Taiwan Fair Trade Commission Disposal Directions (Guidelines) on Handling Merger Filings (“Merger Guidelines”); and • the Guidelines on the Provision of Pre-Filing Consultation Service. The Taiwan Fair Trade Commission (TFTC) promulgated amendments to the “Combination Types to Which Paragraph 1, Article 11 of the Fair Trade Act Does Not Apply” on 28 June 2023 and the Merger Guidelines on 30 June 2023. The key amendments are as follows. Additional “Non-Notifiable/Exempted” Type of Combination The amendments introduced a combination involving foreign enterprises that jointly estab - lish or operate a joint venture outside of Tai - wan, where the joint venture is not engaging in economic activities within Taiwan. There is no substantial benefit to regulating such combina - tions, as the transaction has less connection with Taiwan’s domestic market and there is no direct, substantial and reasonably foreseeable impact on Taiwan’s relevant market. Therefore, the participating parties are not required to notify the TFTC of the combination. Pursuant to Article 12, Paragraph 1, Subparagraph 1 of the TFTA,
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