Data Source:Laws and Regulations Retrieving System of the Banking Bureau

Title：Regulations Governing Foreign Bank Branches And Representative Offices
Chapter 1: General Provision
Article 1 These Regulations are promulgated in accordance with Article 117,
Paragraph 2, of the Banking Law.
Article 2 A foreign bank, which meets the following requirements, may apply
for the approval for the establishment of a branch office within the
jurisdiction of the Republic of China (ROC):
1. The said foreign bank shall not have committed any major
regulatory violation within the most recent five years;
2. The said foreign bank shall be ranked, in terms of capital or
assets, among the top five hundred banks in the world within
one year prior to application, or shall have conducted
transactions with the banks and enterprises of the R OC in the
aggregate amount of more than one billion U.S. Dollars in
three calendar years prior to application, of which no less than
one hundred and eighty million U.S. Dollars shall have been
medium or long term credits. Where there are special
provisions in an economic and trade agreement signed by the
ROC and the home country of the said foreign bank, such
special provisions shall prevail;
3. The said foreign bank shall engage in international banking
business with a good credit rating, a sound financial structure
and the ratio of its capital/risk-weighted assets complying with
the standards prescribed by the competent authority;
4. The said foreign bank shall designate a branch manager who
has sufficient experience in international finance and the
management of international banking operations;
5. Both the banking competent authority and the head office in
the home country of the said foreign bank shall have the
capability to supervise all of its foreign branch offices on a
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consolidated basis; and the bank shall have obtained the
approval of the competent authority in the home country to
open a branch in the ROC and agree to cooperate with the
competent authorities in the ROC in the supervision and
management of the foreign bank's branch in the ROC; and
6. No other facts indicate that the sound business operations of
the said foreign bank may be hindered.
A foreign bank, which has established branch offices within the
jurisdiction of the Republic of China, may assume all or major
portion of the assets or liabilities of another foreign bank. The said
foreign bank planning to establish a separate branch in the ROC
shall be subject to Article 8 [of these Regulations].
Where a foreign bank that does not have a ROC branch, and, as a
result of its head office merging with another bank, or where a
foreign bank acquires more than 50% shares of another bank, thus
acquires the assets or liabilities of a ROC bank branch, and said
foreign bank meets the requirements of Article 2 Paragraph 1, then
Article 6 shall apply to the concurrent establishment of a branch in
the ROC.
Article 3 A foreign bank which has been approved to establish branch offices
in the ROC shall allocate a minimum operating capital of
NT$150,000,000 for the first branch and NT$120,000,000 for each
additional branch office. Such operating capital shall be booked on
a consolidated basis in the account of the first branch office
established upon the recognition of the foreign bank or any other
branch office of such foreign bank as may be designated by the
competent authority.
A foreign bank's branch which intends to increase the amount of
operating capital shall obtain the prior approvals of the Ministry of
Finance and the Central Bank of China.
Article 4 The term "representative office" as used in these Regulations shall
mean the representative office of a foreign bank established in the
ROC in accordance with Article 117, Paragraph 1 of Banking Law
and Article 386 of the ROC Company Law.
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The permissible activities of the representative office of a foreign
bank are limited to collection of commercial and market
information and business liaison.
Article 5 A foreign bank which meets the following qualifications may apply
to establish a representative office in the ROC:
1. The said foreign bank shall not have committed any major
regulatory violation within the past three years;
2. The said foreign bank shall be ranked, in terms of capital or
assets, among the top one thousand banks in the world within
one year prior to application, or shall have conducted
transactions with the banks or enterprises of the ROC in the
aggregated amount of more than three hundred million U.S.
Dollars during the last three calendar years prior to application.
Where there are special provisions in an economic and trade
agreement signed by the ROC and the home country of the
said foreign bank, such special provisions shall prevail;
3. The said foreign bank shall have a good credit rating and
sound financial condition, and the competent authorities in its
home country have approved its establishment of a
representative office in the ROC.
A foreign bank shall be limited to establish only one representative
office in the ROC.
Chapter 2: Foreign Bank Branches
　 Chapter 2: Foreign Bank Branches
Article 6 A foreign bank wishing to establish a branch in the ROC shall
submit the following documents to the competent authority for
approval:
1. Application (as per Attachment 1);
2. A feasibility study, which shall include:
(1) The business strategic consideration for the establishment
of the proposed ROC branch, including the operation
strategy of the head office and a comparison of the political,
economic, trade and financial situations of countries
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neighboring the ROC;
(2) An (acknowledgement of its) understanding of the laws,
tax system, banking laws and regulations, and banking
system of the ROC; and
(3) An analysis of the business benefits to be derived in the
ROC and the feasibility thereof, including analysis of its
potential competitors in Taiwan, the situation of bilateral
trade, cross border investments and business opportunities
between the ROC and the foreign bank's home country, and
any corresponding banks, customers and their dealings with
the bank.
3. Particulars of the bank, including:
(1) Organization: A description of the brief history of the
foreign bank (including any mergers/acquisitions ), its
major departments, worldwide branches and network, its
holding company and subsidiaries and the relevant
shareholding information as well as their business
operations, and the head office's supervision and
management of its overseas branches (including the scope
and frequency of bank audits);
(2) Introduction of its businesses, including the scope and
focuses of its businesses, and comparative analysis of its
assets, liabilities, profits and losses for the last three years;
(3) Principal Responsible Persons and Shareholders: Roster
and background of its chairman, general manager, head of
its international division and any shareholder holding 10%
or more [of its issued capital] as well as the top ten
shareholders;
(4) Home Country Introduction, including an analysis of the
home country's country risk as assessed by a reputable
publication, a description of the financial system of the
home country, name of the home country regulator and its
authority, as well as the scope and frequency of bank
examinations, a description of the deposit insurance
system, a description of any regulatory measures on
foreign exchange transactions and outward/inward fund
remittances as may be imposed by the regulator, and a
description of the regulator's restrictions, if any, in respect
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of foreign banks' establishment and business operation of
in such home country.
4. The foreign bank's ranking among the world's leading banks
by capital or assets for the prior year, as well as the credit
rating of the foreign bank by a globally recognized rating
agency.
5. A self-assessment regarding the foreign bank's compliance
with laws and regulations and the integrity of its business
operations, as well as an explanation of any [legal/regulatory]
violations, frauds, or disciplinary actions imposed on the
foreign bank within the past five years.
6. A document issued by the financial regulator of the foreign
bank's home country approving the establishment of a branch
in the ROC;
7. A document issued by the financial regulator of the foreign
bank's home country stating its willingness to cooperate with
the ROC in sharing the supervisory and regulatory
responsibility for the foreign bank, as well as a document
[issued by such regulator] confirming the soundness of the
foreign bank's business and financial conditions;
8. The resume and associated evidentiary documents of the
proposed manager for the ROC branch;
9. The business plan of the branch, including:
(1) Market and business strategy and plan for future growth;
(2) The proposed business scope, general market condition for
the main business items, and the plan for such business
operations;
(3) The proposed internal organization and division of labor,
organization chart as related to the head office, and the
plan for staffing, hiring and training;
(4) Any operating rules or guidelines, risk management
system, internal controls and audit system; and
(5) A projection of assets, liabilities, profits and losses for the
next three years, and an explanation of the basis for such
projections.
10. Authenticated minutes of the board resolution approving the
filing of application to establish a branch in the ROC or the
equivalent document thereof;
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11. A certification by a certified public accountant of the risk
based asset capital ratio of the foreign bank as of the end of the
most recent year;
12. The Power of Attorney issued by a responsible person of the
head office authorizing a lawyer or certified public accountant
to file the application for approval to establish a branch in the
ROC;
13. The income statement and balance sheets of the foreign bank
for the last three years certified by a certified public
accountant;
14. Documentation proving the due incorporation and existence of
the foreign bank as a legal entity and the banking license
issued by the regulator of the home country;
15. An authenticated copy of the foreign bank's articles of
incorporation;
16. Authenticated letter of authorization designating an agent for
litigious and non-litigious matters in the ROC;
17. With respect to a foreign bank ranking outside top five
hundred in capital or total assets worldwide for the year prior
to submission of the application , statistics regarding the
foreign bank's total transaction volume with the banks and
enterprises in the ROC during the three calendar years prior to
submission of the application;
18. A declaration of the agent for litigious and non-litigious
matters in the ROC (see Attachment 2); and
19. Such other information or documents as may be required by
the competent authority.
Any authentication of the documents referred to in the preceding
paragraph shall be done by a notary public in the foreign bank's
home country or by a ROC consulate or its equivalent.
Article 7 The total net worth of all branches of a foreign bank in the ROC as
well as its offshore banking unit ("OBU") shall not be less than
two-thirds of the minimum amount of working capital required by
the competent authority. If the net worth falls below such minimum
level, the bank's agent for litigious and non-litigious matters in the
ROC shall immediately report same to the competent authority.
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In the event described in the preceding paragraph, the competent
authority may order the bank to remit in sufficient funds within a
prescribed period of time to meet the requirement on minimum
working capital amount.
Article 8 A foreign bank applying to open an additional branch shall submit
the same documents as listed under Article 6, Paragraph 1, Items 8
to 13, along with the following documents, to the competent
authority for approval:
1. A self-assessment regarding the regulatory compliance and
integrity [of the business operations] of the head office and the
ROC branches;
2. Document(s) issued by the regulator of its home country
agreeing to the establishment of the additional branch in the
ROC, and confirming the soundness of the financial condition
of the bank;
3. A description regarding the business operations and any major
events [which have occurred] since the prior branch
establishment application; and
4. Such other information and documents as may be required by
the competent authority.
Any authentication of the documents referred to in the preceding
paragraph shall be done by a notary public in the foreign bank's
home country or by a ROC consulate or its equivalent.
Article 9 A foreign bank shall complete the following procedures and
commence operations within eight months after receiving approval
to establish a branch (or an additional branch); otherwise the
competent authority may revoke the approval to establish a
branch/additional branch:
1. Remittance of the working capital for its business operation in
Taiwan;
2. Submission of an Application for Approved Branch Business
Items (see Attachment 3) to the competent authority for
approving business items for the branch;
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3. Completion of foreign company recognition registration (or
amendment thereto) and branch registration as required by the
Company Law and related regulations;
4. Submission of an Application for Business License (see
Attachment 4) to the competent authority for the issuance of
banking license and payment of the registration fee;
5. Report to the competent authority of the date on which the
branch will commence business, and, as required by Articles
55 of the Banking Law, make public announcement in Chinese
at the place where the branch is located regarding the
particulars recorded on the banking license issued by the
competent authority.
One extension to the period specified in the preceding paragraph
may be granted if there is an extraordinary event.
Article 10 A foreign bank that seeks to relocate a branch shall submit the
following to the competent authority for approval:
1. Reasons for the relocation;
2. A proposal regarding the bank's handling of existing
customers' rights/obligations and any alternative services that
may by offered; and
3. The business plan for the new location.
Article 11 A foreign bank that seeks to close its branch shall submit the
following to the competent authority for approval:
1. Reasons for the closure;
2. A proposal regarding the bank's handling of existing
customers' rights/obligations and any alternative services that
may by offered; and
3. Authenticated minutes of the board resolution or equivalent
document authorizing the application to close the ROC branch.
Article 12 A foreign bank that has received approval to relocate its branch
shall apply to the competent authority for re-issuance of the
banking license and to commence operations [at the new location]
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within one year from the approval date; otherwise the competent
authority shall revoke the approval. A foreign bank closing its
branch shall return its banking license and cease its business
operation within the same prescribed period.
A foreign bank relocating or closing its branch shall, before
commencing or ceasing its business operation, file a report to the
competent authority in relation thereto.
Article 13 The businesses that a foreign bank branch may apply to offer shall
be in accordance with Article 4, Article 117 and Article 121 of the
Banking Law and shall be approved by the competent authority.
The businesses for which the branch of a foreign bank has
received approval to offer, as referred to in the preceding
paragraph, shall be recorded on the banking license before such
businesses are offered.
Article 14 Where the authorization provisions in Paragraph 1, Article 33-3 of the Act apply mutatis mutandis to the limit of credit a foreign bank branch may extend to the same person, same related party or same affiliated entity, the term “net worth” shall mean the global net worth of the foreign bank.
Article 15 The terms "terms and conditions of credit extensions" and
"borrowers in the same category" used in Article 33, Paragraph 2
of the Banking Law shall have the following meanings as they
apply to foreign banks' branches mutatis mutandis:
1. The term "terms of credit extension" shall include the rate,
security and its assessed value, guarantors (if any), tenor and
the interest payment and principal repayment schedule of the
credit extension;
2. The term "borrowers in the same category" shall mean the
borrowers to which credits are extended by the branches of the
foreign bank in Taiwan for or under the same applicable prime
lending rate period, same lending purposes and same
accounting entry; provided, however, that, if a foreign bank
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does not have a prime lending rate system, the comparison
shall be made by reference to [the credits granted] for the most
recent year period.
Article 16 A foreign bank branch shall establish its internal control system
appropriate to the nature and scope of its business and ensure the
independence of its internal audit system.
Article 17 The balance sheet, income statement, and statement of cash flow
of a foreign bank's branch and the consolidated balance sheet,
income statement, and statement of cash flow of such foreign
bank's branch and its offshore banking units, as well as any other
items required by the competent authority, shall be audited and
certified by a certified public accountant and, along with the
annual report of the head office, be submitted to the competent
authority within four months after the end of the fiscal year, and
shall be published in a daily newspaper in the place where such
branch is located or in such other manner as may be designated by
the competent authority and placed in a conspicuous location at
each of its business premises for public review.
A foreign bank branch shall submit its balance sheet, income
statement and other relevant monthly report(s) as designated by
the competent authority, to the competent authority in the form,
with the contents, in the method and within the time period
specified by the competent authority at the conclusion of each
(business) month. In addition, a foreign bank branch shall submit
a business report for each calendar year at the end of such year.
Article 18 If Article 72, 72-2, 74-1 and/or 75 of the Banking Act applies, a
foreign bank branch's "calculating basis of total amount of
deposits", shall include, in addition to deposits in New Taiwan
Dollars and foreign currencies, working capital remitted from the
head office in its home country, actual drawdowns under credit
lines from its head office and interbank time deposits from its
overseas branches with terms of more than one year.
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Article 19 A foreign bank branch shall establish risk management criteria,
which, at a minimum, shall include credit risk, marketing risk,
liquidity risk, operation risk and legal risk. Such criteria shall be
approved by the head office or the regional representative and be
submitted to the competent authority for review.
The criteria for management of liquidity risk by a foreign bank
branch shall, at least, include the following:
1.The management system for liquidity risk of the head office and
rules governing the management for liquidity risk adopted by
the head office for the Taiwan branch as approved by the head
office.
2.A management strategy for handling liquidity risk to the Taiwan
branch and an emergency plan for capital raising where the
bank is operating normally, the head office is facing operating
difficulties or the Taiwan branch is facing operating difficulties.
3.The methods for the foreign bank branch to obtain a stable
source of capital to satisfy potential needs for capital; and
4.A system for preparing on internal management reports for the
head office or the regional representative to regularly review
the branch's liquidating management.
Article 20 Outward remittances of earnings of a foreign bank branch shall be governed pursuant to the Regulations Governing the Declaration Reporting of Foreign Exchange Receipts and Disbursements or Transactions and other relevant provisions promulgated by the Central Bank of China.
Article 21 If a foreign bank has any of the following events, its litigious and
non-litigious agent in the ROC shall report such event(s) to the
competent authority together with information relating thereto:
1. dissolution or suspension of business;
2. reorganization, liquidation or bankruptcy;
3. major regulatory violations or revocation of its business
license by the home country regulator;
4. change of name or location of the head office;
5. transfer of, or change to the holding structure of, more than ten
percent (10%) of the stock [of the foreign bank], or any
recapitalization with respect to more than ten percent (10%)of
its capital;
6. merger, assignment or assumption of all or material assets or
business;
7. major equity investment in the ROC;
8. major loss or potential major loss;
9. material litigation;
10. material change in the policies or strategies of its business
operation;
11. material change in the financial system and/or banking
regulations of its home country; and
12. any other material event(s).
Article 22 The competent authority [in the ROC] may require a foreign bank
branch to submit reports or information on the business or
financial condition of its head office.
Chapter 3: Foreign Bank Representative Offices
　 Chapter 3: Foreign Bank Representative Offices
Article 23 A foreign bank applying for the approval to establish a
representative office in the ROC shall submit the documents listed
in Article 6, Paragraph 1, Items 3, 4, and 12 through 16 and the
following documents to the competent authority:
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1. Application (as per Attachment 5);
2. A feasibility study, which shall include:
(1) The business strategic consideration for the establishment
of the proposed ROC representative office, including the
operation strategy of the head office and a comparison of
the political, economic, trade and financial situations of
countries neighboring the ROC;
(2) An (acknowledgement of its) understanding of the laws,
tax system, banking laws and regulations, and banking
system of the ROC; and
(3) An analysis of the business benefits to be derived in the
ROC and the feasibility thereof, including analysis of its
potential competitors in Taiwan, the situation of bilateral
trade, cross border investments and business opportunities
between the ROC and the foreign bank's home country, and
any corresponding banks, customers and their dealings with
the bank.
3. A self-assessment regarding the foreign bank's compliance
with laws and regulations and the integrity of its business
operations, as well as an explanation of any [legal/regulatory]
violations, frauds, or disciplinary actions imposed on the
foreign bank within the past three years.
4. The resume and associated evidentiary documents of the
proposed representative in the ROC;
5. A document issued by the financial regulator of the foreign
bank's home country approving the establishment of a
representative office in the ROC;
6. Authenticated minutes of the board resolution approving the
filing of application to establish a representative office in the
ROC or the equivalent document thereof;
7. With respect to a foreign bank ranking outside top one
thousand in capital or total assets worldwide for the year prior
to submission of the application, statistics regarding the
foreign bank's total transaction volume with the banks and
enterprises in the ROC during the three calendar years prior to
submission of the application;; and
8. Such other information or documents as may be required by
the competent authority.
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Any authentication of the documents referred to in the preceding
paragraph shall be done by a notary public in the foreign bank's
home country or by a ROC consulate or its equivalent.
Article 24 A foreign bank shall, within eight months after receiving approval
to establish a representative office, file registrations with the
Ministry of Economic Affairs pursuant to Article 386 of the
Company Law and set up the representative office, and shall,
prior to its set-up, submit copies of the registration documents and
report the date of set-up and location of the representative office
to the competent authority. The competent authority may revoke
its approval if the representative office is not established within
the period specified above.
Article 25 Within two months after the end of the head office's fiscal year,
the representative office shall submit to the competent authority a
report of its activities in the ROC.
The above report shall be in such form and include such contents,
and shall be filed in such manner, as required by the competent
authority.
Article 26 The competent authority may from time to time designate a
person(s) to examine the activities of a foreign bank
representative office, or order a foreign bank representative office
to submit a report on its activities and other relevant information
within a specified period.
Article 27 A foreign bank applying to relocate its representative office shall
submit an application specifying the reasons for the relocation to
the competent authority for approval.
Article 28 A foreign bank applying to close its representative office shall
submit an application specifying the reasons for the closure, along
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with the resolution of the board of directors authorizing the
closure, to the competent authority for approval.
Chapter 4: Supplemental Provisions
　 Chapter 4: Supplemental Provisions
Article 29 These Regulations shall become effective as of the date of
promulgation.
If the translations of the texts differ from the
original Chinese texts, the original texts are preferential.
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