TAIWAN Law and Practice Contributed by: James Huang, Eddie Hsiung and Maggie Huang, Lee and Li, Attorneys-at-Law
Services and Restrictions on Licensed Banks’ Activities According to Article 71 of the Banking Act, the main business activities of a commercial bank include: • accepting deposits; • issuing bank debentures; • investing in securities; • handling domestic and foreign remittances; • offering loans and credit; • providing guarantees; and • acting as the agency bank in related banking business. Besides the normal scope of services set forth in the Banking Act, a bank may also concurrently conduct other business upon the approval of the FSC. For instance, a bank may concurrently operate: • trust enterprise business; • insurance agent or insurance broker busi - ness; The statutory restrictions on and implications of authorisation can be found in three major aspects: • the paid-in capital; • responsible persons of the bank; and • the ownership. The minimum paid-in capital requirement for establishing a commercial bank is NTD10 billion (approximately USD310 million), and the contri - bution must be made in cash only. • financial advisory services; and • electronic payment business. Statutory and Other Conditions for Authorisation
According to the Regulations Governing Quali - fication Requirements and Concurrent Serving Restrictions and Matters for Compliance by the Responsible Persons of Banks, the general restrictions and requirements for the responsible persons of a bank include that the person must: • not have been sentenced to imprisonment for certain financial crimes or in violation of financial regulations; • not concurrently hold positions that may incur a conflict of interest; and • have adequate knowledge, capability and experience in banking business. A person must obtain the FSC’s approval before they acquire more than 10%, 25% or 50% of the issued voting shares of a bank. There is no restriction on foreign ownership and the FSC is generally receptive to foreign investors. Howev - er, PRC investors are subject to the PRC owner - ship restriction and a different approval process. Applying for Authorisation – Timelines, Costs and Engagement with the Regulators According to the Standards Governing the Estab - lishment of Commercial Banks, the major steps and regulatory approvals generally required for the establishment of a bank are as follows. • Firstly, the founders of the bank should sub- scribe up to 80% of the total paid-in capital of the bank at the time of initiation. • Secondly, the founders are required to submit an application for the FSC’s approval. The application documents should include: (a) a business plan; (b) the founder’s qualification declaration; (c) the source of funds; (d) the articles of association; and (e) the paid-in capital and equity instruments of the bank.
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