On May 17, 2009, the Ministry of Commerce of the PRC (MOFCOM) and the Taiwan Affairs Office of the State Council (TAO) issued the Circular on Relevant Issues Regarding Mainland- Based Enterprises’ Investing or Establishing Non-Enterprise Legal Persons in the Taiwan Area to promote cross-strait direct investment and economic development.
At the outset, the Circular underlines that relevant mainland enterprises should follow market economy principles to realize mutual economic benefits without endangering national security or prospects for unification.
The Circular clarifies the role of approval authorities as well as the procedures for investing and establishing non-enterprise entities in Taiwan. Central enterprises should submit their applications directly to MOFCOM in accordance with the Administrative Measures for Overseas Investment, which MOFCOM issued on March 16, 2009. As for local enterprises, provincial-level commerce authorities will file applications on their behalf to MOFCOM. MOFCOM will examine the applications and, after consulting with TAO, may approve them and issue relevant certificates according to the Measures.
Moreover, according to the Circular, an approved enterprise must operate within the scope approved by MOFCOM. In addition, after completing registration for an enterprise or nonenterprise legal person in Taiwan, the enterprise or non-enterprise legal person must provide copies of its registration documents to MOFCOM and TAO within 15 days. Also, if any changes occur to the enterprise or non-enterprise legal person in Taiwan, certain procedures must be followed in accordance with the Measures.
Finally, MOFCOM and TAO may supervise mainland enterprises’ investment or establishment of non-enterprise legal entities in Taiwan, and may punish enterprises that violate the Circular or other regulations.