| Title： |
Offshore Banking Act(1997.10.08) |
| Date： |
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Article 1
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This Act is promulgated to promote international financial activities, to establish a regional financial center and to authorize
banks to set up offshore banking branches within the territory of the Republic of China (“R.O.C.”).
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Article 2
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The Ministry of Finance (“MOF”) shall be the competent administrative authority and the Central Bank of China
(“CBC”) shall be the competent operational authority.
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Article 3
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The following types of banks may, through their head offices, apply to the competent authorities for obtaining the approval of
the establishment of an offshore banking branch with a separate set of accounts to conduct international banking activities:
1.Foreign banks authorized by the CBC to engage in foreign exchange businesses within the R.O.C.
2.Foreign banks authorized to have a representative office in the R.O.C.
3.Reputable foreign banks approved by the competent authorities.
Domestic banks authorized by the CBC to engage in foreign exchange businesses.
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Article 4
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An offshore banking branch may only conduct the following types of business:
1.Accepting foreign currency deposits from natural persons, juridical persons, government agencies and financialinstitutions
within or outside the territory of the R.O.C.;
2.Extending credit in foreign currency to natural persons, juridical persons, government agencies and financialinstitutions
within or outside the territory of the R.O.C.;
3.Selling foreign currency financial debentures or other certificates of debt issued by the head office to naturalpersons, juridical
persons, government agencies and financial institutions within or outside the territory of the R.O.C.;
4.Undertaking proprietary dealing, brokerage and agency activities of foreign currency securities for natural persons,juridical
persons, government agencies and financial institutions within or outside the territory of the R.O.C.
5.Conducting the issuance, advising and negotiation of letters of credit in foreign currency, and import/exportcollection for
natural persons, juridical persons, government agencies and financial institutions outside the territory of the R.O.C.;
6.Conducting foreign currency remittances and exchanges, foreign currency transactions, borrowing or lending offunds, and
buying or selling of foreign currency denominated securities, between the said offshore banking branch and other financial
institutions, and between the said offshore banking branch and natural persons, juridical persons, government agencies and
financial institutions outside the territory of the R.O.C.;
7.Underwriting securities issued outside the territory of the R.O.C.;
8.Book-keeping and managing for foreign currency loans extended outside the territory of the R.O.C.;
9.Conducting custody, agency and consultation businesses related to the businesses stipulated above for naturalpersons,
juridical persons, government agencies and financial institutions within or outside the territory of the R.O.C.; and
10.Other foreign currency businesses approved by the competent authorities.
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Article 5
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Unless otherwise provided in the Act, the conduction of the businesses specified in the preceding Article by an offshore
banking branch shall not be subject to the limitations of relevant Articles of the Statute Governing Foreign Exchange, the
Banking Law and the Law Governing the Central Bank of China.
The MOF, after consulting with the CBC, shall set regulations for offshore banking branches concerning: credit extension to
individual customer and other transactions restrictions, examinations by the competent authorities or other appropriate
institutions mandated thereby, the contents of the reports and means for submitting the reports regarding financial and business
conditions, the qualifications of managers, utilization of funds and risk management.
An offshore banking branch established pursuant to Article 3, Items 2 and 3 of this Act shall appropriate working capital for its
operations in the R.O.C. The minimum amount of the said working capital shall be stipulated by the MOF.
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Article 5-1
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Articles 32 to 33-2 of the Banking Law shall apply mutatis mutandis to credits extended to related parties by an
offshorebanking branch.
In the event of any violation of the preceding paragraph, the person responsible for such violation shall be punishable by
imprisonment of no more than three years or detention and/or a fine of One Million Eight Hundred Thousand New Taiwan
Dollars (NT$1,800,000).
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Article 6
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Natural persons, juridical persons, government agencies or financial institutions within the territory of the R.O.C. financed by
an offshore banking branch shall be governed by applicable laws and regulations governing finance transactions with non-
resident banks.
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Article 7
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An offshore banking branch accepting foreign currency deposits shall not:
1.accept foreign currency in cash ; and
2.allow the withdrawal of foreign currency deposits in New Taiwan Dollars.
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Article 8
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Unless approved by the CBC, an offshore banking branch shall not conduct exchanges or other transactions between foreign
currencies and New Taiwan Dollars.
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Article 9
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An offshore banking branch shall not engage in direct investment and investment in real estate.
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Article 10
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The offshore banking branch of a domestic bank may operate in the same business premises as its head office, and the
offshore banking branch of a foreign bank may operate in the same business premises as its branch appointed to engage in
foreign exchange business.
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Article 11
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Deposits received by an offshore banking branch shall be exempt from deposit reserve requirements.
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Article 12
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Interest rates on deposits or loans of offshore banking branches may be determined between the offshore banking branch and
its customers.
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Article 13
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Income of offshore banking branches shall be exempt from business income tax; however, income of offshore banking
branches derived from credit extension to natural persons, juridical persons, government agencies and financial institutions
within the territory of the ROC shall be subject to taxation or exemptions as stipulated in the relevant income tax laws.
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Article 14
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Revenues of offshore banking branches shall be exempt from business tax; however, the business revenue of offshore banking
branches derived from services to natural persons, juridical persons, government agencies and financial institutions within the
territory of the R.O.C. shall be subject to taxation or exemptions as stipulated in relevant business tax laws.
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Article 15
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All types of certificates used by offshore banking branches shall be exempt from stamp duties.
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Article 16
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Interests paid by offshore banking branches to financial institutions, and natural persons, juridical persons and government
agencies outside the territory of the R.O.C. shall be exempt from withholding requirement on income tax.
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Article 17
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Offshore banking branches shall be exempt from loan loss reserve requirements, unless otherwise required by the laws of the
country where the said offshore banking branch’s head office is located or required by the said country’s banking authority.
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Article 18
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Unless otherwise required by court order or law, offshore banking branches are under no obligation to disclose any
information to third parties.
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Article 19
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Telecommunications equipment and information systems to be used by an offshore banking branch in connection with its head
office and other international financial institutions may be imported upon case-by-case applications.
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Article 20
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After the end of each fiscal year, an offshore banking branch shall submit its operation report, balance sheet and income
statement to the competent authorities. The competent authorities may at any time request the offshore banking branch to
provide, within a given period of time, information concerning its business or financial conditions or other reports. However,
offshore banking branches shall be exempt from the requirements to make public their balance sheets.
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Article 21
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License fees may be charged to offshore banking branches based on the fee schedule to be prescribed by the competent
authorities.
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Article 22
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If an offshore banking branch commits any of the following acts, its responsible person shall be punishable by a fine of from
One Hundred Eighty Thousand New Taiwan Dollars (NT$180,000) to one Million Eight Hundred Thousand New Taiwan
Dollars (NT$1,800,000):
1.Conducting any business not provided for in Article 4 of this Act,
2.Violating Articles 7 through 9 of this Act,
3.Failing to submit the reports required under Article 20 of this Act, or failing to provide the information concerningthe
business or financial conditions or other reports pursuant to the same Article,
4.Failing to pay the license fee pursuant to Article 21 of this Act.
In the cases where the violations continue even after the punishment, the competent authorities may impose an additional fine
of one to five times the prescribed amount. In addition, if the above deed is a serious one, the competent authority may impose
the following punishments:
1.suspension of the said offshore banking branch’s business operations for a specified period of time; or
2.revocation of the license of the said offshore banking branch.
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Article 22-1
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In the event of any violation of the regulations stipulated pursuant to Article 5, Section 2, the following punishments shall be
imposed:
1.A fine of from One Hundred Eighty Thousand New Taiwan Dollars (NT$180,000) to One Million Eight HundredThousand
New Taiwan Dollars (NT$1,800,000) upon any violation of restrictions on single customer credit extensions related party
lending or other transaction restrictions;
2.A fine of from One Hundred Eighty Thousand New Taiwan Dollars (NT$180,000) to One Million Eight HundredThousand
New Taiwan Dollars (NT$1,800,000) upon the concealment or destruction of related documents or upon reasonable lack of
response to questions from regulatory auditors or the competent authorities.
3.A fine of One Hundred Twenty Thousand New Taiwan Dollars (NT$120,000) to One Million Two HundredThousand New
Taiwan Dollars (NT$1,200,000) upon any violation of any limitation set by the competent authorities on the type and amount
of foreign currency securities invested by offshore banking branches.
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Article 23
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The regulations for the implementation of this Act shall be set by the competent authorities.
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Article 24
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This Act shall become effective as of the date of its promulgation.
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