TAIWAN Trends and Developments Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
Overview of Taiwan Merger Control Rules Merger control in Taiwan is regulated by the Tai - wan Fair Trade Act (TFTA), and the competent authority is the Taiwan Fair Trade Commission (TFTC). The principle is that a filing with the TFTC would be required for a transaction that falls within the definition of a “combination” under the TFTA if any of the filing thresholds is met and no exemption applies. Type of combination Article 10 of the TFTA defines a “combination” • the holding or acquisition of at least one-third of the voting shares of, or interest in, another enterprise; • a transfer or lease of all or a substantial part of an enterprise’s business or assets; • having an arrangement with another enter - prise for joint operation on a regular, ongo - ing basis, or the management of another enterprise’s business based on a contract of entrustment; or • having direct or indirect control over the oper - ation or personnel management of another enterprise. Filing thresholds Under the TFTA, there are both turnover filing thresholds and market share filing thresholds, as follows: to include: • a merger; • the aggregate global turnover of all the enter - prises to a combination in the preceding fiscal year exceeded TWD40 billion, and each of at least two of the enterprises had a turnover in Taiwan of more than TWD2 billion in the preceding fiscal year; • for a combination of non-financial enterprises, one of the enterprises generated a turnover in
Taiwan of more than TWD15 billion in the pre - ceding fiscal year, while the other enterprise generated a turnover in Taiwan of more than TWD2 billion in the preceding fiscal year; • for a combination between financial enter - prises, one of the enterprises generated an annual turnover of more than TWD30 bil - lion, while the other enterprise generated an annual turnover of more than TWD2 billion; • as a result of the combination, the enterprises in a combination will jointly acquire at least one-third of the market share in Taiwan; or • one of the enterprises participating in the combination holds a market share of at least one-quarter in Taiwan before the combination. Substantive test and review timeline In terms of the substantive test, as prescribed under Article 13 of the TFTA, if the TFTC con - cludes, after considering all relevant factors, that the overall economic benefits of the combination outweigh the disadvantages resulting from com - petition restraint, clearance would be granted. With respect to the timeline, if the TFTC does not make any objection to the filing within 30 working days following the filing date, the par - ties to the proposed transaction would be free to proceed with the combination. The TFTC may shorten the 30-day waiting period or extend it by up to another 60 working days if it deems necessary. It should be noted that the filing date refers to the date on which the TFTC confirms that all required documents and information have been completed. To be specific, after receiving the ini - tial filing, the TFTC may issue letters of request for information (RFI), instructing the parties to provide supplemental information. The RFI pro - cedure will end if and when the TFTC is satis -
595 CHAMBERS.COM
Powered by FlippingBook