ROC Cabinet greenlights Company Act amendments

2015-05-04

Amendments to the Company Act were approved April 30 by the ROC Cabinet, underscoring government efforts fostering a knowledge creation business environment in Taiwan for startups from home and abroad.

“This move is the final part of legislation promoting Taiwan’s innovation and Internet economy,” Premier Mao Chi-kuo said. “It follows the third-party payment bill that passed final reading in January and limited partnership bill under legislative review.”

According to the premier, the revisions are in line with international standards and reflect the needs and views of all relevant public and private sector parties. “We foresee it serving as a strong legal foundation for Taiwan’s entrepreneurs, especially the youth,” he said.

The changes permit businesses to register as a close company if they are not publicly listed and have fewer than 50 shareholders. Government statistics reveal there are about 150,000 firms in Taiwan satisfying the requirement.

Benefits of a close company include offering partial ownership in exchange for founding partners’ technical know-how or labor, holding shareholder meetings through video conferences or other nonphysical means and issuing shares without a par value.

“Our next step is to fast-track legislative review of the amendments,” Mao said, adding that the Ministry of Economic Affairs is working with ruling and opposition lawmakers to build consensus.

Sources familiar with the matter view the move as playing a key role in further strengthening Taiwan’s already impressive reputation as a haven for startups and small and medium enterprises. The country ranks No. 1 in Asia and No. 8 in the world for such business activity, according to the latest Global Entrepreneurship Index by Washington–based Global Entrepreneurship and Development Institute.

An MOEA official said another positive outcome stemming from the revisions is that it will encourage more foreign entrepreneurs to set up shop in Taiwan.

“Unlike traditional corporate governance emphasizing the separation of management and ownership, high-tech startups are often run by their founders,” the official said. “The revisions offer greater flexibility in the critical business areas of fund raising, operations and ownership structure.”

Source: Taiwan Today (http://taiwantoday.tw/ct.asp?xItem=229914&CtNode=413)