TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
• an enterprise merging with another enterprise that is under the control of or subordinate to the latter enterprise; • an enterprise merging with another enterprise where both are under the control of the same controlling enterprise; • an enterprise transferring its part of (or entire) voting shares or capital contribution of a third enterprise to another enterprise that is under the control of or subordinate to the latter enterprise; and • an enterprise transferring its part of (or entire) voting shares or capital contribution of a third enterprise to another enterprise that is under the control of the same controlling enterprise. On 28 June 2023, the TFTC promulgated amend - ments to the “Combination Types to Which Para - graph 1, Article 11 of the Taiwan Fair Trade Act Does Not Apply” by adding an additional ”non- notifiable/exemption” type of combination of joint ventures; please see 1.1 Merger Control Legislation for details. To correspond with its amendments to the Merg - er Guidelines, the TFTC concurrently repealed the Guidelines on Extraterritorial Mergers. There - after, except for non-notifiable types of combina - tion, an extraterritorial combination 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. 2.2 Failure to Notify Failing to notify a combination that meets a filing threshold may cause the TFTC to impose penal - ties, including the prohibition of the combination, divestiture, transfer of the business acquired, and/or removal of personnel designated by the enterprises if the TFTC discovers such viola - tion. The TFTC is also authorised to impose an
administrative fine of between TWD200,000 and TWD50 million. Penalties imposed on parties for violating merg - er control rules will be published by the TFTC. Publicly available information indicates that the TFTC imposed two sanctions between 2024 and March 2025 for failure to notify a combination that met the filing thresholds under the TFTA. Both cases involved local transactions, and the TFTC fined each enterprise TWD200,000. 2.3 Types of Transactions According to the TFTA, a transaction that falls under the definition of a “combination” and also meets certain thresholds prescribed by the TFTA requires a notification to the TFTC in advance. According to the TFTA, a ”combination” is broadly defined to include: • a merger; • the holding or acquisition of one-third or more of the voting shares of, or interest in, another enterprise; • a transfer or lease of the whole, or a substan- tial part, of an enterprise’s business or assets; • a contractual arrangement with another enterprise for joint operation on a regular and ongoing basis, or the management of another enterprise’s business on a contract of entrust - ment; and • direct or indirect control over the business operation or personnel management of another enterprise – whether “control” exists should be evaluated on a case-by-case basis since there is no definitive definition thereof. Internal restructuring or reorganisation, under certain circumstances, may fall into the excep - tions under the TFTA and be exempted from a fil - ing obligation; please refer to 2.1 Notification for details. An operation that does not involve the
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