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Regulations for Foreign Exchange Settlements in Taiwan
The following regulations outline the requirements for banking enterprises to verify the registration information of companies, limited partnerships, or firms, and to ensure that information recorded on declaration statements is consistent with corresponding information on contracts, letters of approval, or other evidencing documents.
Key Points
- Banking enterprises must verify the required documents in accordance with their internal operation procedure and applicable provisions of the Civil Code for non-resident declarants under 20 years old.
- For direct investments, portfolio investments, or futures transactions approved by competent authorities, or for investments filed ex-post with competent authorities under specific statutes, banking enterprises must comply with attached tables concerning documents to be verified.
Additional Documents Required
For inward and outward remittances from and to Mainland Area, banking enterprises must verify additional documents provided in point 26 and notice the following:
- Investments in Third Areas: Except for cases that make use of Annual Aggregate Settlement Amount and the amount of any single foreign exchange settlement exceeds the amounts specified in Subparagraphs 1 and 2, Article 5 of the Regulations for Declaration, banking enterprises shall verify documents specified in attached Table 1 for other cases.
- Foreign Exchange Settlement Cases Declared in Accordance with Provisions of Attached Tables: Banking enterprises need not count settlement amount in declarant’s aggregate settlement amount of current year.
Provisions for Mainland China Area
Banking enterprises that process outward remittances to and inward remittances from Mainland China Area must comply with the provisions of attached Table 10 concerning documents to be verified and notice note the following situations:
- Direct Investments and Portfolio Investments Not Approved by Competent Authorities: Banking enterprises may not process inward or outward remittances for direct investments and portfolio investments not approved by competent authorities, or for other purposes not approved according to laws and regulations.
- Foreign Exchange Settlement Against New Taiwan Dollar for Direct Investment in Mainland China: A. Outward Remittances of Equity Investment or Working Capital: Except for individuals where the amount of settlement shall be counted in aggregate settlement amount of current year, the amount of settlement needs not be counted in the aggregate settlement amount of current year; for individuals, the amount of settlement shall be counted in the aggregate settlement amount of current year in case of companies, firms and associations. B. Inward Remittances: In case of companies, firms and associations, the amount of settlement needs not be counted in the aggregate settlement amount of current year; in case of individuals, the amount of settlement shall be counted in the aggregate settlement amount of current year. However, if repatriation of funds which originally remitted out and counted in declarant’s Annual Aggregate Settlement Amount, then repatriation shall be excluded from declarant’s aggregate settlement amount.
These regulations aim to ensure that foreign exchange settlements are conducted lawfully and transparently in Taiwan.