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Article 22 of the Statute for Industrial Innovation (產業創新條例) is Taiwan's master statutory provision governing outbound investment by Taiwanese entities. Pre-amendment, Article 22 established a notification + approval regime keyed primarily to investment-amount thresholds (NTD 1.5bn for individual projects), with limited substantive review criteria.
The 18 April 2025 amendment (third reading, Legislative Yuan) restructures the outbound-investment regime along three axes:
1. Substantive-review criteria expanded. Under the amended Article 22, MOEA may reject or conditionally approve outbound investments based on: - Investment amount exceeding NTD 1.5 billion (or lower thresholds as determined by secondary legislation); - Nature, destination, and strategic importance of the investment (i.e., destination-country and industry/technology screens, in addition to the amount-threshold screen); - Impact on national security (including defence and military implications); - Harm to economic development or supply-chain resilience; - Conflict with international treaties or agreements to which Taiwan is a party (or de-facto party); - Violation of labour-standards laws.
2. Conditional-approval power. MOEA may grant approval in whole or in part, or subject to specific undertakings — establishing a structured remedies architecture analogous to the US Treasury "prohibited" / "notifiable" / "excepted" tiers under the EO 14105 final rule, and to the Korea MOTIE NCT-screening conditional-approval regime.
3. New Article 67-3 enforcement penalties. A two-tier civil-penalty schedule: - Initial non-compliance (failure to obtain approval, false statements, etc.): NTD 50,000 to NTD 1,000,000 fines + mandatory withdrawal, correction orders, or investment cessation. - Failure to comply with conditions / deadlines / undertakings imposed by MOEA under Article 22 Paragraph 3: NTD 500,000 to NTD 10,000,000 per violation.
Implementing-rule effective dates are to be determined by Executive Yuan secondary legislation. The Statute itself became binding upon Presidential promulgation on 7 May 2025; Executive Yuan rule-making sets the operational thresholds for the destination-country list, the industry/technology list, and the conditional-approval remedies framework.
controls on semiconductor / advanced-packaging investment to China operated via export-side instruments (Foreign Trade Act / Strategic High-Tech Commodities (SHTC) regime, e.g., 2025-06-10-taiwan-moea-shtc-entity-list-huawei-smic) and via investment-amount notification. Article 22 / 67-3 is structurally novel — a horizontal outbound-investment- security instrument with substantive-review power keyed to destination-country and technology criteria, not just amount thresholds. Distinct statutory authority, distinct enforcement architecture, distinct remedies versus the pre-existing SHTC export-control regime.
AUO, ASE.** All Taiwanese-listed firms with mainland-China / HK manufacturing or advanced-packaging footprints face prior-approval risk on capacity expansions, equipment upgrades, and technology transfers. Most exposed: TSMC Nanjing 16nm/28nm fab, UMC Xiamen 28nm fab, MediaTek China design centres, ASE China advanced-packaging.
violation under Article 67-3 is in the same order of magnitude as the Korea NCT-screening penalty schedule and exceeds the routine SHTC-side civil penalties.
architecture.** Taiwan's adoption of the destination-country + industry/technology screen template — already operationalised by US (EO 14105 + Treasury Final Rule), Korea (MOTIE NCT), and EU (Commission Recommendation 2025/63) — completes the four-jurisdiction outbound-investment-screening perimeter on advanced semiconductor / AI-compute capex flowing into China + HK.
destination-country / industry-list secondary legislation are still pending Executive Yuan rule-making as of May 2025; the operational stringency depends on those thresholds. The framework statute is in force but the substantive rule-making that determines per-firm impact is forthcoming.
The responds_to edges to the US EO 14105, Korea MOTIE NCT, and EU Commission Recommendation 2025/63 reflect the explicit four-jurisdiction template Taiwan is integrating into:
G7-aligned outbound-investment-screening regime. Targets semiconductors / microelectronics, quantum, AI.
Technology (NCT) outbound-investment-screening regime (effective 1 April 2025).
Outbound Investment in Countries of Concern (effective 2 January 2025) — operationalises EO 14105.
recommends Member States establish national outbound- investment-screening mechanisms.
Article 67-3 — Taiwan's structural integration into the four-jurisdiction outbound-investment-screening perimeter.
The implicit designated-country/region focus on PRC + HK is consistent with the US Treasury "Country of Concern" definition (China + HK + Macau) and with the Korea MOTIE "strategic concern" definition (de-facto China-focused).
TSMC / UMC / MediaTek / ASE constituents that face prior-approval friction on China-bound capex; offset partially by the Article 10-1 / 10-2 onshore-capex incentive pulls (joint effect: onshoring premium for Taiwan-domestic AI-server / advanced-packaging build-out).
an existing facility — capacity expansions, technology upgrades, or scope-of-products changes are now subject to MOEA Article 22 prior-approval review under the amended substantive-criteria framework.
Xiamen fab; expansions or technology-transfer events to that facility require MOEA prior-approval review.
HBM, CoWoS, and other advanced-packaging capex flowing into ASE / SPIL China facilities subject to prior-approval review — particularly material given HBM is the dominant AI-compute supply-chain bottleneck.
Investment in expanded R&D footprint or technology- transfer events involving advanced-node design IP subject to review.
positive on the supply-chain-diversification narrative — the four-jurisdiction outbound-screening perimeter reinforces the "China-decoupling premium" priced into US-listed semi names with non-China fab/test footprint.
The two regimes are complementary, not substitutes. SHTC operates on physical-export of strategic high-tech commodities (e.g., specific equipment, design IP); Article 22 / 67-3 operates on the corporate-action side (capital deployment, capacity expansion, technology transfer via FDI). A single transaction (e.g., TSMC expanding Nanjing capacity) may trigger both regimes in parallel.
rule-making explicitly name PRC + HK as the designated jurisdictions, or rely on a more general "national-security-risk" criterion that is implicitly China-focused? The Korea MOTIE precedent uses "strategic concern" language; the US EO 14105 and Treasury Final Rule explicitly name China + HK + Macau.
list track the US EO 14105 sector scope (semiconductors, quantum, AI) or extend further (e.g., advanced manufacturing, biotech, dual-use materials)?
specific undertakings will MOEA accept? Mitigation agreements, technology-firewall commitments, or divestment timelines on the model of CFIUS mitigation agreements?
legislation operationalising the substantive-criteria framework is the next milestone. Until then, the prior-approval gate operates on the pre-amendment amount-threshold basis with the new substantive-review criteria providing discretionary grounds for denial.
Does Taiwan's outbound-screening regime reciprocally signal increased restrictiveness on inbound mainland- China investment into Taiwan? The Statute for Industrial Innovation does not address inbound-screening directly, which is governed by the separate Statute for Investment by Foreign Nationals + Mainland Investment Act.
Treasury's Outbound-Investment-Countries-of-Concern rule applies to "US persons" — does it reach Taiwan- domiciled affiliates of US-listed semiconductor firms? Joint Taiwan + US Treasury jurisdiction creates potential double-screening exposure for joint-venture structures.