Taiwan – How Mainland Chinese Enterprises Are Identified

• Individuals, legal entities, or other organizations from mainland China.
• Individuals, legal entities, or other organizations from mainland China investing in Taiwan through a third-party company in another region.

※ The criteria for identifying a third-party company owned by Mainland Chinese businesses include meeting one of the following conditions:

(1) Direct investment or indirect ownership of more than 30% of the shares or total capital of the third-party investment company by Mainland Chinese businesses.

(2) Control capability of the third-party company by Mainland Chinese businesses; the criteria for determining control capability are as follows:

1. Agreement with other investors that grants the ability to exercise more than half of the voting rights of the shares.
2. Legal or contractual provisions allowing control over the financial, operational, and personnel policies of the company.
3. Authority to appoint or remove more than half of the principal members of the Board of Directors (or equivalent organization), with control vested in the Board of Directors (or equivalent organization).
4. Authority to dominate more than half of the voting rights of the Board of Directors (or equivalent organization), with control vested in the Board of Directors (or equivalent organization).
5. Other criteria for control capability as specified in Financial Accounting Standards Bulletin No. 5 and No. 7 published by the Foundation of Accounting Research and Development Institute, Republic of China.”