Issued by: Ministry of Commerce of the People’s Republic of China
Taiwan Affairs Office of the State Council PRC
Announcement No.: 12, 2013
Date of Issuance: February 20, 2013
Date of Implementation: February 20, 2013

In order to implement Cross-strait Investment Protection and Promotion Agreement, protect the lawful rights and interests of Taiwan investors, encourage Taiwan compatriots to make investment in China Mainland and promote cross-strait economic cooperation, the Interim Measures for Determination of Reinvestment by Taiwan Investors Through A Third Place is hereby promulgated and shall come into effect since February 20, 2013.

Ministry of Commerce of the People’s Republic of China
Taiwan Affairs Office of the State Council PRC
February 20, 2013

Interim Measures for Determination of Reinvestment by Taiwan Investors Through A Third Place

Article 1 In order to protect the lawful rights and interests of Taiwan investors in China Mainland and implement Cross-strait Investment Protection and Promotion Agreement, the Interim Measures for Determination of Reinvestment by Taiwan Investors Through A Third Place (hereinafter referred to as the Measures) are formulated in accordance with relevant laws and administrative rules.

Article 2 Taiwan investors, who invest and establish enterprises in China Mainland (hereinafter referred to as the “reinvestment enterprise”) through companies, enterprises or the other economic organizations in a third place (hereinafter referred to as the “third place investors”) that are under direct or indirect ownership or control of such Taiwan investors, may submit applications in accordance with the Measures to determine the third place investors as Taiwan Investors (hereinafter referred to as the “determination of reinvestment”).

Article 3 The Ministry of Commerce jointly with Taiwan Affairs Office of the State Council PRC, and the competent authorities of commerce of all provinces, autonomous regions, municipalities directly under the Central Government, municipalities separately listed on the State Plan and the Xinjiang Production and Construction Corps (hereinafter referred to as the “provincial competent authorities of commerce”) jointly with Taiwan Affairs Office PRC of the same level are responsible for the determination and administration of the reinvestment by Taiwan investors through a third place.

Article 4 “Taiwan investors” herein refer to the following natural persons or enterprises:

(1) Natural persons holding identification documents of Taiwan region; and

(2) Enterprises that are established and registered in Taiwan region, including companies, trusts, firms, partnership or other organizations, but excluding overseas subsidiaries, agencies, liaison offices, and entities not engaging in substantive operation, which are established and registered in Taiwan region by national persons, enterprises or organizations from countries or regions other than China Mainland and Taiwan region.

Article 5 “A third place” in Article 2 of the Measures means countries or regions other than China Mainland and Taiwan region. The third place investors shall establish enterprises in accordance with laws of the third place.

Article 6 “Ownership” in Article 2 of the Measures means that Taiwan investors have more than 50% of equity in the third place investors.

Article 7 “Control” in Article 2 of the Measures means failing to comply with the requirements in Article 6 herein but meeting one of the following conditions:

(1) Taiwan investors actually have more than 50% of the voting powers in the organs of authority of the third place investors such as the board of director or the board of shareholders;

(2) Taiwan investors have the power to appoint and dismiss more than half of the members of the organs of authority of the third place investors such as the board of directors, which have the power to make decisions on matters such as the operation of the third place investors;

(3) Taiwan investors have the power to decide matters such as the operation, finance and personnel of the third place investors; or

(4) Other circumstances as may be specified by the Ministry of Commerce jointly with Taiwan Affairs Office of the State Council PRC.

Article 8 For Taiwan investors that are eligible with more than two conditions mentioned above, and have the equity and voting powers in the same third place investor, the equity and the voting powers in such third place investors and their influence may be combined, and the provisions of Article 6 and Article 7 herein shall apply.

Article 9 “Substantive operation” in Article 4(2) hereof shall be eligible with all the conditions below:

(1)The enterprises shall have places for business operation in Taiwan region;

(2)The enterprises shall have records of tax payment in Taiwan region; and

(3) The enterprises hire employees in Taiwan region.

Article 10 Taiwan investors applying for the determination of reinvestment shall file an application with the provincial competent authority of commerce where the reinvestment enterprise is located and present the following materials:

(1) Application Form for Determination of Reinvestment by Taiwan Investors Through A Third Place. Taiwan investors that entrust others to file the application shall submit an notarized power of attorney that is signed by such Taiwan investors;

(2)Notarized identification documents if the Taiwan investors are natural persons;

(3)Notarized documents evidencing the establishment and registration of Taiwan investors, notarized documents evidencing the ownership or lease of the places for operation, notarized documents evidencing the payment of income tax in the last year (enterprises suffering losses shall provide documents evidencing the loss issued by the taxation authority) and proofs for the payment of insurance for employees, if the Taiwan investors are enterprises;

(4) Documents describing and evidencing the relation of ownership and control among Taiwan investors, the third place investors and the reinvestment enterprises; and

(5)Other documents required by the authority responsible for determination and administration.

Article 11 As of the date of receipt of all effective materials, the provincial competent authority of commerce jointly with Taiwan Affairs Office of the same level shall make examination and verification within 20 working days and issue the reinvestment determination certificate to Taiwan investors in conformity with the requirements of the Measures and otherwise, issue the opinion of rejection. The provincial competent authority of commerce shall record Application Form for Determination of Reinvestment by Taiwan Investors Through A Third Place in the Foreign Investment Examination and Approval Administration System, through which the form is electronically filed with the Ministry of Commerce.

After Taiwan investors obtain the reinvestment determination certificate, the reinvestment enterprises, with the certificate, may apply with the competent authority of commerce with examination and approval power for issuing or renewing for the Certificate of Approval for Establishment of Enterprises with Foreign Investment or the Certificate of Approval for Establishment of Enterprises with Investment of Taiwan, Hong Kong, Macao and Overseas Chinese; for the reinvestment enterprise that is approved by the Ministry of Commerce, the provincial competent authority of commerce where the reinvestment enterprise is located, may renew the Certificate of Approval for Establishment of Enterprises with Foreign Investment or the Certificate of Approval for Establishment of Enterprises with Investment of Taiwan, Hong Kong, Macao and Overseas Chinese once authorized by the Ministry of Commerce.

The competent authority of commerce, when issuing or renewing the certificate of approval, shall mark “(reinvestment by Taiwan investors through a third place)” after the name of the third place investors in the Certificate of Approval for Establishment of Enterprises with Foreign Investment or the Certificate of Approval for Establishment of Enterprises with Investment of Taiwan, Hong Kong, Macao and Overseas Chinese.

Article 12 After obtaining the reinvestment determination and subject to the following changes, Taiwan investors shall, in timely manner, report such changes to the competent authority of commerce issuing the original determination certificate, and submit documents describing and evidencing such changes.

(1) Taiwan investors do not comply with the provisions of Article 4 or Article 9;

(2) The ownership or control of Taiwan investors over the third place investors does not comply with the provisions of Article 6 or Article 7 hereof; or

(3) Other circumstances as may be specified by the Ministry of Commerce jointly with Taiwan Affairs Office of the State Council PRC.

After receiving the documents describing and evidencing the circumstances, the competent authority of commerce jointly with Taiwan Affairs Office of the same level shall cancel the determination of reinvestment by Taiwan investors through a third place, renew the Certificate of Approval for Establishment of Enterprises with Foreign Investment or the Certificate of Approval for Establishment of Enterprises with Investment of Taiwan, Hong Kong, Macao and Overseas Chinese and delete the mark of “(reinvestment by Taiwan investors through a third place)” within 10 working days.

Article 13 If any investment dispute occurs and the Taiwan investors with reinvestment determination submit such dispute to a cross-strait investment dispute settlement body in China Mainland for intermediation and settlement by referring to the provisions concerning settlement of investment dispute in Cross-strait Investment Protection and Promotion Agreement, such Taiwan investors shall also submit the reinvestment determination certificate issued by the competent authority of commerce and the Certificate of Approval for Establishment of Enterprises with Foreign Investment or the Certificate of Approval for Establishment of Enterprises with Investment of Taiwan, Hong Kong, Macao and Overseas Chinese marked in accordance with the provisions of Article 11 hereof.

If the time interval between the date of determination indicated in the written determination opinion for the reinvestment by Taiwan investors through a third place and the date when the application is submitted to the cross-strait investment dispute settlement body in China Mainland for the settlement of investment dispute is more than one year, or if the time interval is less than one year, and however the ownership or control relation of Taiwan investors and the ownership or control relation between Taiwan investors and the third place investors are subject to change, Taiwan investors shall submit the acknowledging opinions concerning the determination of reinvestment issued by the competent authority of commerce to the cross-strait investment dispute settlement body in China Mainland.

Article 14 Taiwan investors applying for acknowledgement of reinvestment determination shall, in accordance with the related requirements of Article 10 herein, submit to the provincial competent authority of commerce, documents describing and evidencing whether Taiwan investors’ ownership or control and their ownership or control over the third place investors are subject to changes during the period from the date of submission for determination to the date of application for acknowledgement. Provincial competent authority of commerce jointly with Taiwan Affairs Office of the same level, shall complete the examination and verification and issue the acknowledging opinions within 10 working days.

Article 15 The Interim Measures shall come into effect since February 20, 2013, and shall be construed by the Ministry of Commerce jointly with Taiwan Affairs Office of the State Council PRC.