The Repatriation of Overseas Taiwanese Businesses
On the 3rd of July, the Legislative Yuan finalized readings of a bill on the repatriation, use and taxation of overseas funds. The bill incentivizes and rewards Taiwanese companies and investors to return and invest in Taiwan.
The Ministry of Finance outlines the key provisions as follows:
To register, one must apply to the competent authority, who will then conduct preliminary examinations on the applicable requirements and contact the relevant bank for review. Upon successful application, the applicant will then open a “Foreign Capital Foreign Exchange Deposit Account[PLT1]” and remit the tax incentive into the account.
Restrictions on capital use
1. Remittance funds shall not be used for the purchase of real estate and the beneficiary securities issued or delivered under the Real Estate Securitization Ordinance. Unless one gains approval from the Ministry of Economic Affairs to allow for the construction or purchase of buildings for self-production or business use.
2. The repatriation of overseas funds must be deposited in the “ Foreign Capital Foreign Exchange Deposit Account” and ought to be managed in the following ways:
Thus, funds for free use and a substantial investment, financial investment and any remaining funds not engaged in the investment shall be deposited into the “Foreign Capital Foreign Exchange Deposit Account” for 5 years.
Applicable tax rate
During the period of the actual investment, the individual or the profit-making enterprise shall report the investment to the economy yearly. For future reference, the receiving bank shall report the use of funds within the special account to the Ministry of Finance and the Financial Management Committee for reference yearly.
Implementation period: Following the implementation of these Regulations, the Executive Yuan must verify the date of implementation of the profit-making business and individual CFC system within a year. All funds remitted within 2 years of the implementation of these Regulations shall be subject to the provisions of these Regulations.
 As stipulated in the Basic Tax Regulations
 According to the relevant provisions on money laundering and anti-terrorism prevention
[PLT1] Also known as a foreign exchange deposit account