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Policy and promotion status on allowing Mainland investment in Taiwan

(1) The SEF and the ARATS reached a consensus on Mainland investment in Taiwan at the Third Chiang-Chen Talks held on April 26, 2009. On June 30, 2009, the government promulgated the Regulations Governing Investment in Taiwan by Persons of the Mainland Area and the Regulations Governing the Establishment of Branch Companies or Offices in Taiwan by Profit-Making Enterprises in the Mainland Area, which stipulate requirements for investor qualification and recognition, methods of investment and establishment of operation bases, reinvestment, examination and management, reporting, and inspection procedures related to Mainland investment. It also announced the list of sectors officially opened to Mainland investment in Taiwan.

(2) The government has established strict mechanisms for the management of Mainland investment in Taiwan to prevent the possible risk occurrences. The Provisions of the Regulations Governing Investment in Taiwan by Persons of the Mainland Area prohibit Mainland military investment or Mainland investment with military objectives in Taiwan. Investment applications of potential economic exclusive occupancy, oligopoly or monopoly, or political, social or cultural sensitivity, or investments that may impact national security or may be of negative influence on national economic development or financial stability may all be prohibited.

(3) On June 30, 2009, the Ministry of Economic Affairs (MOEA) announced an initial list of 192 items opened to investment. On May 20, 2010, it opened up an additional 12 items, including the banking, securities, and futures sectors. Later, on January 1, 2011, an additional sporting services item was opened up in conjunction with the implementation of the ECFA service industry Early Harvest List, accumulating to a total of 205 items that include 61 manufacturing categories, 129 service categories, and 11 public construction categories. On March 7, 2011, the MOEA announced a second opening phase of 42 industry items (25 manufacturing items, eight service items, and nine public construction items). On March 30, 2012, the MOEA announced a third opening phase of 161 industry items, including 115 manufacturing items, 23 service items, and 23 public construction items, bringing the total number of items allowed to 404. The allowed industry items are summarized as follows:

1. Manufacturing: A total of 201 items have been opened in this industry, accounting for 95% of the manufacturing industry stipulated by the ROC Standard Industrial Classification.

2. Services: A total of 160 items have been opened in this industry, accounting for 51% of the service industry stipulated by the ROC Standard Industrial Classification of the ROC.

3. Public construction: A total of 43 items have been opened in this industry, accounting for 52% of the industry stipulated by the Act for Promotion of Private Participation in Infrastructure Projects.

(4) By the end of July 2014, the Investment Commission had authorized 559 Mainland companies to establish branches in Taiwan or to invest in domestic companies, with an approved investment amount of about US$1.037 billion.

(5) The government will continue to strengthen promotion and investment attraction work aimed at Mainland enterprises. Furthermore, based on past experiences in allowing Mainland investments into Taiwan, the government will also review and improve relevant policies and implementation mechanisms in order to further attract more Mainland investment and thus promote the balanced development of cross-strait mutual investment.