Draft Amendments to the Regulations Governing the Approval of the Establishment of Branch Offices or Representative Offices in Taiwan by Profit-seeking Enterprises in the Mainland Area or Their Invested Profit-seeking Enterprises in a Third Area Pre-announced by the Ministry of Economic Affairs of Taiwan

August 2022

Teresa Huang and Hannah Kuo

To accommodate the amendments to the Act Governing Relations between the People of the Taiwan Area and the Mainland Area on June 8, 2022, the Ministry of Economic Affairs released on July 1 the Draft Amendments to the Regulations Governing the Approval of the Establishment of Branch Offices or Representative Offices in Taiwan by Profit-seeking Enterprises in the Mainland Area (hereinafter, the “Regulations”), which are highlighted below:

1. To accommodate the amendment to Article 40-1 of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, the Regulations are renamed the “Regulations Governing the Approval of the Establishment of Branch Offices or Representative Offices in Taiwan by Profit-seeking Enterprises in the Mainland Area or Their Invested Profit-seeking Enterprises in a Third Area,” and all kinds of existing control provisions of the Regulations are specifically extended to profit-seeking enterprises in a third area that are invested by profit-seeking enterprises in the Mainland area.

2. In the event of a change to the approved, registered, or recorded matters of a profit-seeking enterprise in the Mainland Area or its invested profit-seeking enterprise in a third area, the period in which amendment approval, registration, or recordation should be filed with the competent authority is shortened from 30 days to 15 days (Article 12 of the draft Regulations.)

3. The amendments provide that the research business activities of the Taiwan representative office of a profit-seeking enterprise in the Mainland area and its profit-seeking enterprise in a third area shall be limited to statistics, organization, and analysis related to market surveys, and specifically stipulate that such a representative office shall not engage in acts of research and development (Article 14 of the draft Regulations).

For the content of the amendments to the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, please refer to the Firm’s article : Partial Amendments to the Act Governing the Relations Between the People of the Taiwan Area and the Mainland Area via Presidential Directive