| Legislative： |
Amendment on November 19, 1997. |
| Content： |
Article 1.
Matters relating to investments within the territory of the Republic of China (“ROC”) by foreign
nationals, and the protection, restrictions, and administration of such investments shall be governed
by this Act.
Article 2.
The term “Competent Authority” as used in this Act refers to the Ministry of Economic Affairs.
The Competent Authority may authorize subordinate agencies or commission other institutions or
organizations to administer the investments set forth in this Act.
Article 3.
Foreign national as referred to in this Act shall include foreign legal persons.
The nationality of a foreign legal person shall be determined by the law under which the foreign
legal person is incorporated.
Foreign nationals making investments within the territory of the ROC under this Act are hereinafter
referred to as “investors” or the “investor.”
Article 4.
Investments as referred to in this Act shall be as follows:
1. Holding shares issued by an ROC company, or making capital contributions to an ROC
company;
2. Establishing branch office, a sole proprietorship or a partnership in the territory of the ROC;
3. Providing loan(s) to the invested business referred to in the preceding two paragraphs for a
period exceeding one (1) year.
Article 5.
If the investor holds, in an aggregate, more than one third (1/3) of the total shares issued by an
enterprise in which the investor invests, or if an investor contributes, in an aggregate, more than one
third (1/3) of the total capital amount of an enterprise in which the investor invests, the reinvestment
to be made by the invested enterprise shall be subject to the Competent Authority’s approval.
Article 6.
Investments made in accordance with this Act consist of the following types of capital
contributions:
1. Cash;
2. Machinery and equipment or raw materials for own use;
3. Patent rights, trademark rights, copyrights, technical know-how or other intellectual property
rights;
4. Other property in which the investor may invest under the Competent Authority’s approval.
Article 7.
The investor is prohibited from investing in the following industries:
1. Those which may negatively affect national security, public order, good morals, or national
health;
2. Those which are prohibited by the law.
The investor, who applies to invest in an industry in which investment is restricted by law or by an
order given under the applicable law, shall obtain an approval thereof or a consent thereto from the
competent authority in charge of the industry in question.
The industries prohibited under paragraph 1 above and restricted under paragraph 2 above shall be
prescribed and reviewed on a regular basis by the Executive Yuan.
Article 8.
The investor who makes an investment in accordance with this Act is required to fill out an
investment application form, attach the investor’s investment plans and relevant documents, and
submit it to the Competent Authority for approval. The same shall apply if the investor’s investment
plan changes.
The format of the investment application form in the preceding paragraph shall be prescribed by the
Competent Authority.
The Competent Authority shall make its decision on an investment application case within one (1)
month after completion of the application procedures, or if the application is also subject to the
approval of the competent authority in charge of the relevant end enterprise, within two (2) months
thereafter.
Regulations governing investors’ investments in securities shall be stipulated by the Executive Yuan.
Article 9.
The investor shall have the investor’s approved capital contribution remitted in full into the ROC
within the prescribed time limit, and shall submit a report on the receipt of the contribution amount
to the Competent Authority for examination.
If the investor fails to implement the investor’s investment, in whole or in part, after being granted
an approval to make an investment under this Act, within the prescribed time limit, the approval of
the investor’s unimplemented investment shall be revoked upon expiration of the prescribed time
limit. However, for justifiable cause, the investor may, prior to the expiration, apply to the
Competent Authority for an extension of the prescribed time limit.
After implementing the investor’s investment, the investor shall request the Competent Authority to
verify the total amount of the investor’s investment.
Regulations of the verification shall be prescribed by the Competent Authority.
Article 10.
In case the investor intends to transfer the investor’s investment already implemented by the
investor to an industry other than those prohibited from investment under paragraph 1 of Article 7
hereof, the investor shall apply to the Competent Authority for cancellation of the investor’s original
investment and for approval of the investor’s new investment.
In case the investor intends to assign the investor’s investment, the assignor and the assignee shall
jointly apply to the Competent Authority for approval of the assignment.
Article 11.
The investor shall be entitled to foreign exchange settlement under this Act. This entitlement is not
transferable, except to the legitimate heir of the assignee of the investor’s investment, or to other
authorized foreign nationals or overseas compatriots to whom the investor has assigned the
investor’s investment.
Article 12.
The investor may apply for foreign exchange settlement against the interests accrued on the
investor’s annual income, or against the profit surplus distributed to the investor from the investor’s
investment.
When the investor is approved to transfer the investor’s shares, to withdraw or decrease the
investor’s investment, the investor may apply for foreign exchange settlement, in a lump sum,
against the total amount of the investor’s investment as approved. The foregoing clause is also
applicable to the capital gain realized from the investor’s investment.
The investor’s application for foreign exchange settlement against the payment of the principal and
interest of the investor’s loan investment shall be governed by the agreed terms and conditions
approved by the Competent Authority.
Article 13.
In case the government expropriates or acquires an invested enterprise for national defense reasons,
the investor thereof whose investment is less than 45% of the total capital amount of the invested
enterprise shall be entitled to a reasonable compensation.
The compensation under the preceding paragraph shall be permitted for foreign exchange
settlement.
Article 14.
In case the investor’s investment accounts for 45% or more of the total capital amount of the
enterprise in which the investor invests, the invested enterprise shall not be subject to expropriation
or acquisition as long as the said capital contribution rate of the investor remains unchanged for a
period of twenty (20) years after the commencement of business of the invested enterprise.
If the investor’s investment is made in conjunction with an overseas compatriot who makes the
investment under the Act for Investment by Overseas Compatriots, and if their aggregate amount of
investment accounts for 45% or more of the total capital amount of the invested enterprise, the
provisions referred to in the preceding paragraph shall, mutatis mutandis, apply thereto.
Article 15.
Where an invested enterprise is organized as a company under the Company Act, the investor
thereof may be exempt from the restrictions on the investor’s domicile in the ROC, nationality, and
the amount of capital contributions under paragraph 1 of Article 98, paragraph 2 of Article 108,
paragraph 1 of Article 128, paragraph 5 of Article 208, and paragraph 1 of Article 216 of the
Company Law.
The provisions of paragraph 4 of Article 156 of the Company Act requiring issuance of stock
certificates to the public, and the provisions of Article 267 of the same Law requiring setting aside a
certain percentage of new shares (issued as a result of capital increase by cash) for subscription by
employees of the invested enterprise shall not apply to an investor’s investment if such investment
accounts for 45% or more of the total capital of the enterprise in which the investor invests.
If the investor’s investment is made in conjunction with an overseas compatriot who makes the
investment under the Act for Investment by Overseas Compatriots, and if their aggregate amount of
investment accounts for 45% or more of the total capital amount of the invested enterprise, the
provisions referred to in the preceding paragraph shall, mutatis mutandis, apply thereto.
Article 16.
After special approval by the Executive Yuan, the investor or the enterprise in which the investor
invests shall not be subject to the following restrictions:
1. Paragraph 1 of Article 5 and the proviso of paragraph 3 of Article 5, paragraph 1 of Article 8
regarding ROC nationals, and subparagraph 2 of Article 43 of the Mining Act;
2. Subparagraph 7 of Article 17 of the Land Act;
3. All items of subparagraph 3 of Article 2 and subparagraph 4 of the Law of Ships; provided,
however, that inland and coastal navigation enterprises or those which are not in the form of jointly
invested enterprises shall remain subject to the foregoing restrictions;
4. All items of subparagraph 3 of paragraph 1 of Article 10 and paragraph 1of Article 45 of the
Civil Aviation Act.
Article 17.
Except as otherwise provided for in other laws, the enterprise in which the investor has invested
hereunder shall be accorded the same rights and obligations to which an enterprise operated by ROC
nationals is entitled.
Article 18.
Unless otherwise provided for in this Act, if the investor violates the provisions of this Act, or fails
to perform any matters approved by the Competent Authority, the Competent Authority may deal
with the situation in the following manner:
1. Revoke the investor’s right of foreign exchange settlement against the investor’s profit or
interest earned in a prescribed period of time;
2. Revoke the approval for the investor’s investment and the investor’s rights under this Act.
Article 19.
A foreign national, who fails to make an investment in accordance with this Act before the
amendment to this Act comes into force, may within one (1) year from the enforcement of this
amended Act, apply to the Competent Authority for registration for the application of this amended
Act to the investor’s prior investment.
The procedure of registration referred to in the preceding paragraph shall be prescribed by the
Competent Authority.
Article 20.
This Act shall become effective as of its date of promulgation. |