The economics ministry has announced that new, stricter rules limiting Chinese investment in Taiwanese companies have taken effect. The changes are the result of three amendments drafted back in August.
Taiwan does not allow Chinese investors to own more than 30% of Taiwan companies. But in the past, Chinese investors found ways to invest through third parties. The new rules will now count these indirect investments from China as Chinese investments.
In addition, the new rules also take into account Chinese investors' "power to influence" a company. The term "power to influence" includes various means of control such as control through contracts and partnerships. If Chinese investors are able to control the finances, operations, or personnel of a company, they will be considered having the "power to influence" that company, and as a result, the company as a whole will be re-categorized as a Chinese company.
The economics ministry says it will also place restrictions on investments from any organization with ties to the Chinese Communist Party or Chinese military.