Interpretation concerning Foreign Investors selling own R.O.C. securities

Upon accepting any account opening consignment from overseas Chinese or foreign investors for selling securities, a securities firm shall observe relevant laws and regulations and process the matter in accordance with the following (Article 77 of the Operation Rules of the Taiwan Stock Exchange Corporation)

  • Where approval was obtained from the Investment Commission of the Ministry of Economic Affairs, Science-Based Industrial Park Administration, or the Export Processing Zone Administration, a copy of the approval to sell letter and the power of attorney to file and pay taxes required by the tax authority must be retained, and the type of securities trading and trading volume undertaken shall be in conformance with the approved investment plan.
  • Where the listed securities and the resulting rights for subscription of capitalization increase or stock dividend are obtained due to gift, succession, pursuant to Section 2 of Article 167, (transfer of the bought-back shares), Article 167-2 (the share subscription warrant), Articles 235 & 240 (shares acquired due to the company’s distribution of dividend), Article 267 (new shares bought by the company’s employees), the Company Law and Sub-section 1, Section 1 of Article 28 (transfer of the bought-back shares), Article 28-3 (the share subscription warrant), the Securities and Exchange Law, or for the securities acquired prior to relinquishing one's original nationality, or before the “ Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and Its Remittance ” took effect on December 28, 2000, and the newly acquired shares due to the capital increase as well as the distributed shares based on such securities, the passport copy and the following documents shall be presented to the securities firm to apply for account opening (general account), and it is limited to sales of the above-mentioned securities only. In addition, the shares acquired in compliance with the above may be also sold in application mutatis mutandis to Article 82-1 of Operation Rules of the Taiwan Stock Exchange Corporation, i.e., sold by a borrowing account. But, only a national general account can be borrowed for selling.
  • Documents Enclosed:
    1. Where the listed securities and the said entitlements are obtained through gift, the transfer procedure shall be completed and the paper of tax-payment or tax-exemption for gift issued per Article 41 of the Estate and Gift Taxes Law shall be submitted.
    2. Where the listed securities and the said entitlements are obtained through succession, the transfer procedure shall be completed and the paper of tax-payment or tax-exemption for legacy issued per Article 41 of the Estate and Gift Taxes Law shall be submitted.
    3. Where the listed securities and the said entitlements are obtained pursuant to Section 2 of Article 167-1, Article 167-2, Article 235, Article 240, Article 267 of the Company Law, and Sub-section 1, Section 1, Article 28-1, Article 28-3 of the Securities and Exchange Law, a certificate of employment valid at the time of share subscription, share distribution, and share transfer, and documents evidencing subscription rights shall be submitted.
    4. Where the listed securities are obtained prior to relinquishing one's original nationality, or before the "Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and Its Remittance" took effect on December 28, 2000, documents proving the source of the listed securities or other relevant documents shall be submitted.
  • Where foreign securities have been obtained before being listed on the TWSE market on a primary listing basis, the documentary proof of securities holdings issued by the shareholder services agent located in the R.O.C. engaged by the issuer, the power of attorney to file and pay taxes required by the tax authority, and the ID or the company registration certificate of the principal must be retained, and the type of securities trading and trading volume undertaken shall be in conformance with the documentary proof.
  • For an enterprise having no fixed place of business or business agent within the sovereign of the R.O.C., income tax on gains derived from the securities transactions ceased to be imposed under Article 4-1 of the Income Tax Act and Article 3 of the Income Basic Tax Act. A foreign enterprise on such terms would not be required to have a power of attorney to file and pay taxes required by the tax authority when opening a trading account for securities sale under Article 77 of the Operation Rules of the Taiwan Stock Exchange Corporation.
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