Proposed financial services act to lure investment
The Financial Supervisory Commission will soon propose a draft of the financial services act to the Executive Yuan, giving immigrant investors in Taiwan new tax advantages.
Major incentives in the draft bill, a result of consultations among related ministries, include a reduced minimum fund for investor immigration, preferential tax rules, as well as access for domestic investors to open offshore banking units overseas.
The draft stipulates a minimum investment for an investor immigrant of NT$46 million (US$1.43 million), based on standards in neighboring Singapore and Hong Kong.
The immigrant will then be given residence rights, possibly including permanent resident status, depending on the amount invested, without having to actually reside on the island for the currently required 183 days annually.
This will constitute a breakthrough in current regulations, under which foreigners must file income taxes if they stay in Taiwan for more than 183 days a year, at a maximum rate of 40 percent.
In other words, in the future, as long as foreigners invest amounts meeting the immigrant investor standard, they will not be subject to the 183-days-a-year rule, and will therefore be spared from the higher progressive income tax rates, thus providing an incentive for investment.
Domestic investors wishing to invest overseas will be able to open OBU accounts in Taiwan as natural persons and be exempt from interest income tax soon. Currently, only offshore foreign investors are allowed to do so in the name of both natural and legal persons.
This will hopefully attract Taiwanese expatriates to put their capital back in the country, and then invest through OBU accounts in Taiwan.
Additionally, for individuals investing less than NT$1.5 million, a consumer financial protection agency will be established to help guarantee their rights.
Officials said the purpose of the proposed regulations is to attract long-term foreign investment, not short-term speculative “hot money.” The FSC will also improve its ability to manage assets and provide more diversified products in the future, the officials added. (TYH-THN)
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