REGULATIONS GOVERNING THE APPROVAL OF

INVESTMENT OR TECHNICAL COOPERATION IN

MAINLAND CHINA

Promulgated March 1, 1993 by order of the Ministry of Economic Affairs No.(82)

Tou-Shen-06817

Articles 4, 5, 6, 8, 9, 10, 11 and 14 were amended on July 31, 2002 by order of the

Ministry of Economic Affairs No Ching Shen 09104618630.

[Translation]

Article 1 These Regulations are established in accordance with

paragraph 2 of Article 35 of the Statute Governing
Relations Between Peoples of the Taiwan Area and
the Mainland Area (hereinafter referred to as
“Statute”).
Article 2 Any national, legal entity, organization or other
institution in Taiwan Area investing or engaging in
technical cooperation in the Mainland Area shall be
governed by these Regulations. Issues not addressed
in these Regulations shall be governed by other
applicable laws and regulations.
Article 3 For the purposes of these Regulations, the
Competent Authority shall be the Ministry of
Economic Affairs and the implementing agency shall
be the Investment Commission, Ministry of Economic
Affairs (hereinafter referred to as “Commission”).
Article 4 For the purposes of these Regulations, the term
“investment in the Mainland Area” shall denote any of
the following activities by any nationals, legal entity,
organization or other institution in Taiwan Area:
1. Establishing a company or business entity;
2. Increasing the capital of an existing local
company or business entity;
3. Acquiring the equity of, and operating, an existing
local company or business entity, but excluding
the purchase of stock of a listed company; or
4. Establishing or expanding the business of a
 branch company or business entity.
These Regulations shall be applicable to those
investments mentioned above made by any company
in a third area in which invested by any national, legal
entity, organization or other institution, with a
controlling interest, in Taiwan Area.
Article 5 For the purposes of these Regulations, the term
“technical cooperation in the Mainland Area” shall
denote cooperation of any national, legal entity,
organization or other institution in Taiwan Area with
their counterpart in the Mainland Area through the
provision of technical know-how, patents, trademark
rights or economic rights.
Article 6 For the purpose of investing in the Mainland Area, the
capital carried out by the nationals, legal entities,
organizations or other institutions of the Taiwan Ares
shall be in the form of:
1. Cash;
2. Machinery, equipment and spare parts;
3. Raw materials, semi-finished products or finished
products;
4. Technical know-how, patent, trademark right or
economic right; or
5. Other property in which an investor may invest
under the Competent Authority’s approval.
Article 7 The products or business activities of an investment
or technical cooperation project carried out by any
national, legal entity, organization or other
institution of the Taiwan Area in the Mainland Area
shall, in consideration of state security and economic
development, be categorized into two categories:
general and prohibited. The review principles and
products or business activates approved shall be
determined and published by the Competent
Authority in concert with the industry’s regulatory
authority.
Article 8 For the purposes of these Regulations, any national,
 legal entity, organization or other institution in
Taiwan Area shall submit an application form to the
Commission for approval prior to investing or
engaging in technical cooperation in the Mainland
Area.
The application form mentioned above and other
relevant documentation shall be prescribed by the
Commission.
Article 9 Those who approved to invest in the Mainland Area
shall submit the following documentation to the
Commission for its record within six months of
commencement of their project:
1. A photocopy of documentary evidence of the
investment being made;
2. A photocopy of documentary evidence of the
incorporation and registration or business of the
invested business entity;
3. A photocopy of the shareholder’s roster of the
invested business entity or certificate of interest
held; and
4. Other documentation requested by the
Competent Authority.
Those who approved to engage in technical
cooperation in the Mainland Area shall file the
commencement date of such cooperation along with
the relevant documentation with the Commission
within six months of commencement of their project.
The commission, if necessary, may require the
documentation under subparagraphs 2 and 3 of
paragraph 1, and paragraph 2 to be authenticated by
the relevant authority or the authorized private
organization.
Those who approved to invest in the Mainland Area, if
the aggregated investment amount above the
specific amount prescribed by the Competent
Authority, shall submit the financial reports signed by
their accountants within four months after the end of
 business year, and investment reports within 10 days
after end of per quarter to the Commission.
Article 10 Transfer of approved capital contribution or technical
cooperation in the Mainland Area shall be filed with
the Commission within two months of the transfer for
its record.
Article 11 Those investing or engaging in technical cooperation
in the Mainland Area with government approval shall
file a notice of termination of the project, if such
occurs, within two months of the termination for the
Commission’s record.
Article 12 Approval granted for investment or technical
cooperation in the Mainland Area shall be nullified
upon the expiration of the approval period if the
investment or technical cooperation is not realized
within such period.
Approval granted for investment realized but not
completed within the approved period shall be
nullified upon the expiration of the approved period.
Application for extension, if duly justified, of the
approved period under the preceding paragraph may
be filed with the Commission prior to its expiration.
Article 13 The Commission may revoke the approval granted
for applications for investment or technical
cooperation in the Mainland Area if they are found to
contain any misrepresentation or to be supported by
false documentation.
Article 14 The Commission may revoke the approval and
request to withdraw capital for investment or
technical cooperation in the Mainland Area carried
out against paragraph 1 2 or 4 of Article 9, Articles 10
and paragraph 1 of Article11 of these Regulations.
Article 15 These Regulations shall come into force as of the date
of their being promulgated.