Regulations for Encouraging and Financing Business. Entrepreneurs to Invest in Allied Countries
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1 Regulations for Encouraging and Financing Business Entrepreneurs to Invest in Allied Countries Article 1 Amended and Promulgated by the Ministry of Foreign Affairs on May 10, 2006 The Regulations for Encouraging and Financing Business Entrepreneurs to Invest in Allied Countries (hereinafter referred to as the Regulations ) are stipulated for the purpose of encouraging business entrepreneurs to make investment in countries that have diplomatic relations with the Republic of China (Taiwan) (hereinafter referred to as Taiwan ), thereby promoting economic, trade and diplomatic relations between Taiwan and its diplomatic allies. Article 2 The term business entrepreneurs used in the Regulations shall mean the public or private corporate bodies established in accordance with the law, or Taiwan nationals. The investments referred to in the previous article shall be approved or reviewed by the Investment Commission of the Ministry of Economic Affairs (hereinafter referred to as the Investment Commission ). The categories of investment shall be limited to manufacturing, handicraft, mining, agriculture, forestry, fishery, animal husbandry, transportation, warehouse, public utilities, public facility development, public housing construction, technical services, hotel, construction, financial services, petroleum exploration, media, tourism and other businesses that are consistent with the purpose of the Regulations. 1
2 Article 3 As for financial assistance applications from business entrepreneurs filed before the implementation of the revised Regulations on April 25, 2006, assessments thereof shall be based on the pre-amended regulations. Business entrepreneurs filing applications for financial assistance after the implementation of the amended regulations on April 25, 2006 may apply for financial assistance with the Ministry of Foreign Affairs (MOFA) to cover expenses incurred through one of the following: salaries of local employees, rent of plant facilities or interest on loans. In addition to an approval or acknowledgment letter for overseas investment from the Investment Commission, and the company s establishment permit from the competent agency of the relevant country, business entrepreneurs need to submit the following documents: 1. for assistance to help cover the salaries of local employees: employment contracts and proof of salary disbursements; 2. for assistance to help cover the rent of plant facilities, offices or land: rental contract and proof of rental payment; 3. for assistance to help cover interest on loans: loan contract, remittance receipts, as well as proof of loan balance and interest payment; and 4. other related documents requested by the MOFA. The aforementioned documents, if obtained outside of Taiwan, need to be verified by an ROC embassy or consulate in the country of issuance. Article 4 Financial assistance to cover local employee salaries and rent of plant facilities offices or land as stipulated in the preceding article can amount to the standard of 30% of the monthly salary of each employee and of the rent of plant facilities, offices or land; assistance for loan interest can amount to the standard of 2
3 50% of the net interest paid to the lending institution during the financing period. Financial assistance may be received for a maximum of five years. After the application for financial assistance is approved, the MOFA may allocate the funds in installment payments without interest in accordance with its annual budget. The maximum amount of financial assistance available shall be determined by the total amount of funds approved or acknowledged for overseas investment by the Investment Commission. The total amount of funds accumulated for any single investment cannot exceed NT$20 million. The MOFA may, after an investigation, terminate the assistance or demand the return of provided funds in the event that either the assistance is found not having been used in accordance with approved investment project plan or the Regulations have been violated in the following ways: 1. utilization of subsidies is not in compliance with approved or acknowledged investment project plan; 2. termination of plant operations; 3. yield of all business operation or stock holdings; 4. bankruptcy; 5. serious labor and management disputes leading to cease functioning of plant; 6. falsified application materials; or 7. other Regulation violations. Article 5 Depending on actual needs and business considerations, the government may select and deploy relevant experts on fact-finding missions to countries that enjoy diplomatic relations with Taiwan. The MOFA shall cover the transportation costs and living expenses of these missions. Business entrepreneurs may apply with the MOFA for airfare compensation when participating in investment fact-finding 3
4 missions organized by the government or commissioned by the MOFA in countries having diplomatic relations with Taiwan. The aforementioned airfare compensation is limited to one person per enterprise and calculated on the actual paid amount, up to a maximum of NT$40,000. A business entrepreneur applying for the air ticket compensation must hold a Taiwan passport. When the experts described in Paragraph I and investors described in Paragraph II of this Article take other modes of transportation other than an airplane to countries having diplomatic relations with Taiwan on a fact-finding mission, their compensation for travel expenses shall be calculated in accordance with the standards set in Paragraphs I and III. Article 6 Business entrepreneurs who invest more than US$100,000 in real terms in countries having diplomatic relations with Taiwan may, after making the investments, apply to the MOFA for a refund of the airfare incurred on a fact-finding mission made prior to the investment. The air ticket stubs for such a mission must be submitted with the refund application materials. The aforementioned airfare refund is limited to two trips per investment case. The maximum compensation for each trip shall be the same as the stipulations in paragraph III of the preceding article. When business entrepreneurs take modes of transportation other than an airplane to countries having diplomatic relations with Taiwan for a fact-finding tour, they may, after making the investment, apply with the MOFA for compensation of their travel expenses according to the standards set in the preceding paragraph. 4
5 Article 7 In the event the MOFA fiscal year budget earmarked for assisting such investments fails to meet the needs of that year s applications for subsidies, the MOFA shall review and allocate the amount allotted to applicants based on the order of applications received and amounts requested. Article 8 To evaluate and review the applications for financial assistance, the MOFA may convene meetings with competent authorities and institutions. The banks involved in financing investment cases may be requested to send representatives to these meetings. Business entrepreneurs may also be requested to provide explanations at these meetings, if necessary. Article 9 The Regulations shall enter into force on the date of their promulgation. 5
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