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Legislature passes bill to attract investment by overseas Taiwanese

2019/07/03 23:44:01

Taipei, July 3 (CNA) The Legislature passed a special bill Wednesday aimed at encouraging remittances of funds from abroad, by offering preferential tax rates to potential returning investors.

Under the bill, Taiwanese individuals and companies abroad will be eligible for a special tax rate of 8 percent and 10 percent, respectively, on inward remittances in the first and second years after the new law takes effect, compared with the current 20 percent levied on such funds.

If their remitted funds are invested in specific industries, such as the "five plus two" innovative industries--the Internet of Things, biotechnology, green energy, smart machinery and defense, plus high-value agriculture and the circular economy -- they will receive a tax rebate of 50 percent, according to the bill.

That actually means they will be given a preferential tax rate of 4-5 percent on their remittances.

However, the new law stipulates that remitted funds must be deposited into special foreign currency accounts and cannot be used for the purchase of real estate.

That regulation seeks to avoid speculation in the housing market and ensure compliance with anti-money laundering and counter-terrorism financial laws and regulations.

The new law prescribes that funds remitted into Taiwan should be used mainly for investment purposes, with disposable capital capped at 5 percent of the amount remitted, financial investments at 25 percent, and substantial investments at 70 percent.

It also stipulates that 70 percent of the funds for substantial investments should be kept in the foreign currency accounts for five years if they are not being used. The owners will be allowed to withdraw one-third of the amount in the sixth year, one-third in the seventh year, and the balance in the eighth year, according to the bill.

Deputy Economics Minister Wang Mei-hua (王美花) said Wednesday the new law is expected to prompt more overseas Taiwanese companies to return and invest in Taiwan.

To that end, the ministry will soon introduce supplementary regulations, he said.

The new law is expected to take effect in the fourth quarter of the year, according to the Ministry of Finance.

(By Fan Cheng-hsiang and Evelyn Kao)