TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
2. Jurisdiction 2.1 Notification If any of the filing thresholds is met, a notification is compulsory. The following circumstances are exceptions for a notification even if the filing thresholds are met: • where an enterprise or its 100% held subsidi - ary combines with another enterprise in which it already holds 50% or above of the voting shares or capital contribution; • where enterprises of which 50% or above of the voting shares or capital contribution are held by the same enterprise combine; • where an enterprise assigns all, or a substan - tial part of, its business or assets, or all or a substantial part of its business that could be separately operated, to another enterprise to be newly established and wholly owned by the former enterprise – please note that “sub - stantial part” is not further defined under the TFTA and should thus be judged on a case- by-case basis; • where an enterprise redeems its outstanding shares in order to convert them into treasury stock or because of minority shareholders’ exercise of appraisal rights, causing the other shareholders’ shareholdings to be increased to one-third or more of the voting shares in the enterprise; or • where a single enterprise reinvests to estab - lish a subsidiary and holds 100% of the shares or capital contribution of such subsidi - ary. On 18 July 2016, a ruling was promulgated by the TFTC to exempt the following types of trans - actions from the requirement to make a filing:
To correspond with such amendments, the TFTC concurrently amended the Merger Guidelines and repealed the Taiwan Fair Trade Commission Disposal Directions (Guidelines) on Extraterritori - al Mergers (“Guidelines on Extraterritorial Merg - ers”). Thereafter, except for the non-notifiable types of combination, an extraterritorial com - bination 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. 1.2 Legislation Relating to Particular Sectors The Guidelines on Extraterritorial Mergers used to be the relevant legislation for merger filings related to foreign mergers, under which the TFTC took the local effect into consideration when determining whether it will exercise juris - diction. However, the Guidelines on Extrater - ritorial Mergers were repealed by the TFTC on 30 June 2023; please see 1.1 Merger Control Legislation for details. In Taiwan, there is no other legislation for merg - ers relating to particular sectors. However, under several of the TFTC’s guidelines on sectoral con - trol of certain industries affecting public welfare, such as airlines, banking/finance or 4C indus - tries, certain specific factors will be taken into account by the TFTC when reviewing a merger The TFTC is the competent authority enforcing the TFTA. It is the regulatory body responsible for the execution of the TFTA, and also the agency that interprets the TFTA by rulings and stipulates the enforcement rules and relevant regulations of the TFTA. The TFTC may seek comments from other authorities during the review process but has the final say on its own decision. involving that particular industry. 1.3 Enforcement Authorities
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