Trade
1.Amendments to Customs Import Tariff of R.O.C. / Export and Import Commodity Classification Table and Draft Amendments to Commodities Subject to Approval for Export by Free-trade-zone Enterprises
On 24 April 2025, the International Trade Administration of the Ministry of Economic Affairs (“MOEA”) announced to amend the “Customs Import Tariff of R.O.C. / Export and Import Commodity Classification Table”, and the MOEA also announced the draft amendments to “Commodities Subject to Approval for Export by Free-trade-zone Enterprises,” both of which specify that exporters who would like to export to the U.S the commodities manufactured in Taiwan shall submit a declaration of country of origin.
Reported by: Kang-Shen Liu / Sean Tsai
Financials
2.Draft Regulations on Other Financial Services Enterprise Announced by the Competent Authority under Paragraph 1, Article 3 of Financial Consumer Protection Act
On 23 April 2025, the Financial Supervisory Commission (FSC) announced the draft Regulations on Other Financial Services Enterprise Announced by the Competent Authority under Paragraph 1, Article 3 of Financial Consumer Protection Act for public consultation. We summarize below:
(1) In accordance with the Financial Consumer Protection Act (“Act“), 12 financial leasing companies with dominant market power are announced as financial services enterprises under Paragraph 1, Article 3 of the Act when engaging in purchasing accounts receivable, installment purchase and sale or business of similar financing nature with natural persons;
(2) The Act shall apply only to the aforementioned businesses of financial leasing companies and the financial consumer disputes derived therefrom after the announcement becomes effective; and
(3) The competent authority shall announce the effective date thereof separately
Reported by: Stacy Lo / Zoe Chen
3.Draft Amendment to Regulations Governing the Advertisements and Solicitation or Promotional Activities Conducted by the Financial Services Enterprise, Regulations Governing Ascertaining the Suitability of Financial Products or Services to the Financial Consumer, Regulations Governing Explaining the Important Aspects of the Contract and Disclosing Associated Risks before Providing Financial Products or Services, and Regulations Governing the Establishment and Administration of the Ombudsman Body
On 23 April 2025, the FSC announced draft amendment to the “Regulations Governing the Advertisements and Solicitation or Promotional Activities Conducted by the Financial Services Enterprise”, “Regulations Governing Ascertaining the Suitability of Financial Products or Services to the Financial Consumer”, “Regulations Governing Explaining the Important Aspects of the Contract and Disclosing Associated Risks before Providing Financial Products or Services” and “Regulations Governing the Establishment and Administration of the Ombudsman Body” for public consultation. We summarize below:
(1) Regulations Governing the Advertisements and Solicitation or Promotional Activities Conducted by the Financial Services Enterprise
(a) When a financial leasing company engages in advertisements, solicitation or promotional activities, the disclosure of interest rates and expenses should be based on the annual interest rate and the annual percentage of total expenses;
(b) When a financial leasing company outsources the solicitation business, it shall ensure that the advertisements, solicitation and promotional activities conducted by the service provider comply with the relevant regulations and shall establish a mechanism for supervision, management and regular audit; and
(c) The implementation date shall be determined by the competent authority.
(2) Regulations Governing Ascertaining the Suitability of Financial Products or Services to the Financial Consumer
(a) Before providing financial consumers with goods or services, a financial leasing company should fulfill the know-your-customer procedure of the financial consumers;
(b) To add the limitations on the amount of financing provided by finance leasing companies; and
(c) The implementation date of the amended provisions shall be determined by the competent authority.
(3) Regulations Governing Explaining the Important Aspects of the Contract and Disclosing Associated Risks before Providing Financial Products or Services
(a) Financial leasing companies should explain to financial consumers the interest rate and the method of calculating the interest rate for the goods or services they provide, and shall not sign on behalf of financial consumers or guarantors or fill out contract documents without their consent or authorization;
(b) Financial leasing companies shall not refuse financial consumers to prepay in advance, and if it charges a penalty for prepayment, the calculation and the method of charging the penalty shall be agreed with the financial consumer individually;
(c) Financial leasing companies shall not engage in improper debt collection practices when it conducts collection operations on its own or by outsourcing an external collection agency, and shall establish selection standard, supervision and management, and a mechanism for regular audit of the external collection agency; and
(d) The implementation date shall be determined by the competent authority.
(4) Regulations Governing the Establishment and Administration of the Ombudsman Body
(a) The dispute handling service fee payable by the financial lease companies and its amount; and
(b) The implementation date of the amended provisions shall be determined by the competent authority
Reported by: Stacy Lo / Zoe Chen
4.Draft Amendment to Regulations Governing the Implementation of Internal Control and Auditing Systems of Financial Holding Companies and Banking Industries
On 17 April 2024, the FSC announced the draft amendment to the “Regulations Governing the Implementation of Internal Control and Auditing Systems of Financial Holding Companies and Banking Industries” for public consultation. In addition to restructure, several new provisions were added. We summarize below:
(1) To add the Chief Risk Officer (CRO) as a required signatory of the internal control system declaration.
(2) To revise the “Three Lines of Defense” to the “Three Lines Model,” clearly defining the responsibilities of each line.
(3) To amend internal control regulations and manuals to include the management of sustainability information and business continuity mechanisms, and operational guidelines and manuals shall include the business under the relevant industry laws.
(4) To revise requirements for units designated by management to implement compliance, risk management, or information security systems, including oversight of the development and review of self-assessment procedures. Banks adopting a risk-based internal audit system may formulate project-specific self-assessment plans based on risk evaluation results.
(5) To allow compliance units of banks to concurrently handle fraud prevention matters; permit the compliance head of financial holding companies and banks to concurrently serve as the head of the anti-fraud unit. To require financial holding companies and banks to appoint a Chief Risk Officer, and specify the roles and responsibilities of the risk management unit.
(6) Financial holding companies and banks shall report changes in the Chief Auditor to the competent authority, and establish communication channels and mechanisms between independent directors, the audit committee or supervisors, and the internal audit unit.
(7) To relax the upper limit on the proportion of qualified audit personnel with relevant experience in financial holding companies and banks.
(8) Internal audit reports of general audits conducted by internal audit units shall disclose information related to sustainability information management.
(9) To specify that audit reports prepared by accountants commissioned by banks on internal control systems must provide reasonable assurance.
(10) To expand the scope of individuals eligible for rewards for discovering major misconduct or deficiencies in financial institutions.
(11) To specify that certain provisions of the Regulations do not apply to branches of foreign banks in Taiwan, and define the applicable methods for such exceptions.
(12) Allow a six-month grace period for institutions that meet specific criteria.
Reported by: Stacy Lo / Eva Chiu
5.Draft Amendment to Regulations Governing Foreign Exchange Business of Banking Enterprises
On 18 April 2025, the Central Bank of the Republic of China (CBC) announced the draft amendment to the “Regulations Governing Foreign Exchange Business of Banking Enterprises ” for public consultation. We summarize below:
(1) To streamline administrative procedures, authorized banks that set up automatic teller machines to provide foreign exchange businesses in accordance with regulations shall manage and maintain such machines on their own. Any subsequent additions or removals of such machines do not require separate reporting to CBC.
(2) To be in line with the rulings of the FSC, banking enterprises outsource operation of foreign exchange business which are not subject to prior approval of the FSC may proceed the operations directly and retain relevant documents for record.
(3) To be in line with the rulings of the FSC, authorized banks that issue foreign exchange bank debentures in accordance with regulations do not need to report to the CBC for subsequent issuances within the approved quota, unless otherwise required by the competent authority to apply for approval or to report for record. The aforementioned report shall be submitted to the CBC along with relevant documents within 15 business days after issuance.
Reported by: Stacy Lo / Ron Tsai
Investment
6.Amendment to Statute for Industrial Innovation
The Legislative Yuan passed the draft amendments to the Statute for Industrial Innovation on April 18, 2025. We summarize below:
(1) The applicable period for tax incentives granted to companies or limited partnerships investing in brand-new smart machinery, 5G system deployment, or cybersecurity products or services will be extended until December 31, 2029. New qualifying investment items will be added, including artificial intelligence (AI) products or services and energy-saving and carbon reduction projects. The maximum eligible expenditure for investment tax credits will also be increased to NT$2 billion.
(2) The current requirement that companies must apply for approval prior to making overseas investments exceeding NT$1.5 billion will be amended. The amendment proposes that companies or limited partnerships must apply for approval from the central competent authority before making overseas investments that involve: (i) specific countries or regions, (ii) specific industries or technologies, or (iii) investments reaching a certain monetary threshold. The amendment also introduces a provision allowing the central competent authority to reject the application in whole or in part, or to grant conditional approval.
(3) To amend the capital contribution threshold for venture capital limited partnerships to be eligible for pass-through entity taxation treatment, as well as the required proportion and amount of investment in innovative startups.
(4) To relax the eligibility conditions for individuals making cash investments in specific high-risk innovative startups to qualify for tax benefits.
(5) A new provision will be added to extend the filing period for deferred stock transfer vouchers by five days when the original deadline falls within a period of three or more consecutive national holidays. The party subject to penalties for failure to file as required will be changed from the company’s responsible person to the company itself, and the fine will be revised to allow for penalties imposed within the statutory minimum and maximum range.
(6) To amend the penalties and late payment fees for venture capital limited partnerships that fail to file as required or issue withholding statements.
(7) A new provision will be added to impose penalties on companies or limited partnerships that: (i) fail to apply for approval from the central competent authority prior to executing an overseas investment as required; (ii) fail to fulfill conditions attached to such approval; or (iii) proceed with an investment that, upon review, is found to meet grounds for disapproval, such as non-compliance in its operation. Where the central competent authority issues an order requiring the investor to comply, rectify, or withdraw the investment within a specified period and the investor fails to do so, penalties will be imposed accordingly.
(8) A new provision will be added that taxpayers who have already received tax incentives under other regulations shall not be eligible to enjoy the same incentives again under this Act for the same matter.
Reported by: Mike Lu / Julia Kuo
Securities
7.Draft Amendment to Article 9-1 of the Regulations Governing Offshore Securities Branches
On 1 May 2025, the FSC announced the draft amendment to Article 9-1 of the Regulations Governing Offshore Securities Branches. The draft adds that if the client is an individual, juristic person, government agency, or financial institution located outside the Republic of China (Taiwan), the offshore securities branch (OSU) may also deposit client’s funds into a foreign exchange deposit account opened with a custodian institution that has a business relationship with the securities firm. To secure the funds of the OSU’s clients, the draft also adds eligibility requirements that such custodian institutions must meet.
Reported by: Jeffrey Liu / Jason Su
SITE/SICE
8.Amendment to Template for Internal Management System of Securities Investment Consulting Enterprises Operating Securities Investment Consulting Business
On 22 April 2025, the Securities Investment Trust and Consulting Association (SITCA) announced the amendment to Template for Internal Management System of Securities Investment Consulting Enterprises Operating Securities Investment Consulting Business. The amendments introduce standard guidelines for the internal management systems of securities investment consulting enterprise (SICE) (including securities investment trust enterprises concurrently engaging in SICE business) that provide integrated family office advisory services. We summarize below:
(1) It is stipulated that, prior to commencing such services, a SICE shall assess its own capabilities, determine the scope of services and personnel qualification requirements, obtain board approval, and submit an application to the FSC along with the required documents as prescribed by the FSC.
(2) It is required that cooperation with professionals or third-party service providers must be governed by a written agreement, and appropriate due diligence and periodic review procedures must be in place.
(3) SICEs must provide regular professional training and evaluate the qualifications of their personnel.
(4) SICEs must submit regular reports to the SITCA.
(5) It is stipulated that SICEs must enter into a written agreement with clients when accepting a mandate to provide integrated family office advisory services, and comply with the relevant service requirements.
Reported by: Jeffrey Liu / Winnie Su
| Editors: Mike Lu (Partner) Stacy Lo (Partner) Jeffrey Liu (Partner) Kang-Shen Liu (Partner) David Tsai (Partner) Angela Lin (Partner) Paul Hsu (Partner) Alex Li (Partner) | Counselors: Echo Yeh Sue Su Jolene Wang (Lexcel Partners IP Firm) |
