Newsletter
RULES AMENDED TO ATTRACT INVESTMENTS FROM FOREIGN TECHNOLOGY COMPANIES
The Taiwan Stock Exchange Corporation ("TSE") and the GreTai Securities Market ("GTSM") have amended their listing rules by relaxing certain restrictions on foreign technology companies' applications for listing on TSE and the GTSM in Taiwan.
Under the new listing rules for the foreign technology companies, if a foreign company or a subsidiary in which it holds over 50% shares has obtained an opinion from the Industrial Investment Bureau of the Ministry of Economic Affairs or a professional institution recognized by the TSE or GTSM proving that either of them is a technology company and whose product(s) or technology(s) is well developed and marketable, such company may be exempt from certain restrictions when applying for listing in Taiwan. For example, for listing on the GTSM, the requirements regarding the establishment period and profitability are lifted. As for listing on the TSE, the major differences of the requirements are as follows:
|
Requirements for Listing on the TSE |
Other foreign companies |
Foreign technology companies |
|
Establishment Period |
Business records for at least 3 years |
Business records for at least 1 year |
|
Capital |
A paid-in capital/shareholders' equity of at least NT$600,000,000
and
a market value of at least NT$1,600,000,000 |
A paid-in capital/shareholders' equity of at least NT$300,000,000 or a market value of at least NT$800,000,000 |
|
Profitability |
The pre-tax revenue in the past 3 years has reached NT$250,000,000, the pre-tax revenue in the past year has reached NT$120,000,000, and there was no accumulated loss in the past year. |
The net asset value stated on the audited financial report for the past year shall be at least two-thirds of the shareholders' equity, and the company has sufficient operating capital for 12 months after the listing. |
|
Registered Shareholders |
The number of registered shareholders shall exceed 1,000; there shall be at least 500 non-insider shareholders, and their aggregate shareholdings shall exceed 20% of the issued and outstanding shares or reach at least 10,000,000 shares. |
The number of registered shareholders shall exceed 500; the aggregate shareholdings of the non-insider shareholders shall exceed 20% of the issued and outstanding shares or reach 5,000,000 shares. |
On the other hand, the lock-up requirements are expanded. In addition to the directors, supervisors and shareholders holding 10% or more shares, (i) a shareholder holding 5% or more shares, (ii) a shareholder who holds 0.5% or more shares or holds over 100,000 shares by way of technological contributions and who also works for the company, are also subject to lock-up requirements.
Please refer to our November 2008 and January 2009 bulletin for related reports.