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Article 50
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A securities firm applying to invest in a foreign enterprise, unless otherwise provided by laws or regulations, shall meet the requirements listed below; however, if a securities firm does not meet a condition in subparagraphs 1 to 5, but concrete improvement has been made, and the improvement has been recognized by the FSC, it may be exempted therefrom:
- Have not received any disciplinary warning from the FSC in the most recent 3 months.
- Have not been ordered by the FSC to relieve or replace the duties of its director, supervisor, or managerial officer in the most recent 6 months.
- Have not had business suspended as punishment from the FSC within the last 1 year.
- Have not had the license of branch offices or of a portion of the business invalidated by the FSC as punishment within the last 2 years.
- Have not had trading terminated or restricted by the TWSE, the TPEx, or the TAIFEX as punishment under each of their regulations or rules.
- The regulatory capital adequacy ratio has not been below 200 percent within the most recent 3 months, and its CPA audited or reviewed financial report for the most recent period shows no accumulated deficit, and its financial condition meets the provisions of Articles 13, 14, 16, 18, 18-1 and 19, provided that the requirement regarding the aforementioned regulatory capital adequacy ratio does not apply if special-case approval has been obtained due to special needs.
- The combined total amount invested in foreign enterprises plus the funds that a securities firm establishing an overseas branch office(s) appropriates there for local operations and the amount invested in Mainland China enterprises do not exceed 40 percent of the securities' firm's net worth. However, when there is special need and approval as a special case has been received, this provision does not apply.
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Article 51
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Securities firms applying for investment in a newly formed foreign enterprise shall provide the following documents to the FSC in their application:
- The company's articles of incorporation/by laws or a document equivalent to the company's constitution/regulations.
- The plan for investment, the contents of which shall include the following items:
- The plan for investment including: the purpose of investment, the estimated effect, the origin of capital, the implementation plan, the operation plan, the recapitalization plan, etc. If the type of investment is company, then its reinvestment plan shall be included as well.
- Guidelines for business operations including: the establishment location, amount of capital, the business to be operated, the scope/items of business, business operation strategies, etc. of the company.
- Structure and functions of the organization including: a chart of the organization of the company or a group organizational chart for a holding company, functions and allocation of duties of departments, etc.
- Personnel plan including: personnel allocation/structuring, personnel training, and regulations of personnel management, etc.
- Condition of the site and facilities including: site layout, the summary of important equipment/facilities, etc.
- Financial projection for the next 3 years including: opening costs, financial estimates and notes for financial statement for the next 3 years, etc.
- The minutes of the board of directors' or board of governors' meeting or minutes of the shareholders' meeting resolution.
- The most recent financial report, audited and attested or reviewed by the certified public accountant.
- Management/administration rules shall be set up for those invested or sub-invested foreign enterprises where the investment shareholding percentage is 50 percent or above. The contents of such management/administration rules shall include the following items:
- the scope of management
- the direction and principles of management
- the management of financial, business, and accounting affairs.
- the management of assets
- the financial statements to be regularly prepared
- the method of regular auditing of internal financial and business affairs
- others, such as: management of personnel operations, internal control auditing of the invested enterprises, etc.
- A list detailing the domestic and foreign invested enterprises as of the date of application.
- Other documents required by the FSC.
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Article 52
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Securities firms applying for investment in foreign enterprises shall provide the following documents to the FSC with the application for an approval:
- The company's articles of incorporation/bylaws or a document equivalent to the company's constitution/regulations.
- The plan for investment including: the purpose of investment, the estimated effect, the origin of capital, the recapitalization plan, the estimated income/expenses/profits of the invested foreign enterprise of each year for the next 3 years, etc.
- The minutes of the board of directors' or board of governors' meeting or minutes of the shareholders' meeting resolution.
- The most recent financial report, audited and attested or reviewed by the certified public accountant.
- Management/administration rules shall be set up for those invested or sub-invested foreign enterprises where the investment shareholding percentage has exceeded 50 percent. The contents of such management/administration rules shall include the following items:
- the scope of management
- the direction and principles of management
- the management of financial, business, and accounting affairs.
- the management of assets
- the financial statements to be regularly prepared
- the method of regular auditing of internal financial and business affairs
- others, such as: management of personnel operations, internal control auditing of the invested enterprises, etc.
- A list detailing the domestic and foreign invested enterprises as of the date of application.
- General description of the invested foreign enterprise including: a synopsis of the company, the company organization, capital and shares, scope of business, and financial condition for the most recent 3 fiscal years, etc.
- The investment (or joint venture) agreement.
- Other documents required by the FSC.
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