TAIWAN Law and Practice Contributed by: James Huang, Eddie Hsiung and Maggie Huang, Lee and Li, Attorneys-at-Law
• After the establishment is approved by the FSC and within three months of completing the incorporation registration with the Ministry of Economic Affairs, the bank should apply to the FSC for its business licence. The licence fee is one four-thousandth of the total capital specified in the articles of association of the bank. During the establishment process of the bank, the FSC or another competent authority may designate its personnel to examine the matters relevant to the bank establishment, and may order the applicant to provide certain supporting documents or make explanations at any time. Also, the FSC may decide not to issue the busi - ness licence to the bank if: • the bank’s shareholders, directors, supervi - sors or managers do not meet the require - ment; • the bank fails to complete preparation before the start of business; or • any condition that the FSC deems might lead to unsound and inefficient business opera - tions of the bank occurs. Common Ancillary Activities of Banks in Taiwan According to Article 3 of the Banking Act, busi - ness activities of a bank also include (among others): • managing trust funds under entrustment;
The FSC has permitted banks to conduct wealth management businesses for high-asset custom - ers since 2020. For continuing the promotion of the wealth management business towards local high asset customers, the FSC further issued a letter in 2022 allowing qualified banks in Taiwan to carry out trust investment services for high- asset customers through the trust licence, by using the entrusted assets to invest in an off - shore fund that does not have the nature of a securities investment trust fund. European Passport There is no similar concept under Taiwan law. 3. Changes in Control 3.1 Requirements for Acquiring or Increasing Control Over a Bank Change in Control, Shareholding Thresholds and Other Restrictions An investor in a bank would be subject to report - ing requirements and/or the FSC’s prior approval if its stake reaches a certain level. If an investor and their spouse and children under 18 years of age (if any) in aggregate hold 1% or more of the voting shares in a bank, such investor must notify the bank of this. A report to the FSC will be required if an inves - tor (together with their related parties provided under the Banking Act) acquires or holds more than 5% of the voting shares of a bank. Any subsequent change in the shareholding by more than 1% is also required to be reported to the FSC. A person (together with their related parties) must obtain the FSC’s approval before their
• discounting bills and notes; • investing in securities; and • trading in foreign currencies.
Each business activity conducted by a bank must be approved by the FSC and specified in the business licence.
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