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International Corporate / M&A - Taiwan

posted 10 months ago


Lee and Li is the largest law firm in Taiwan and is a full-service firm which can provide clients with legal services to cover a full spectrum of legal matters encountered by them — from establishment of local entities, advice on regulatory, compliance and corporate governance matters on their daily operations, to M&A transactions. By establishing various practice groups with each specializes in a particular field, including, without limitation, tax, labor, real estate, banking, trademark/patent and anti-trust, our firm is able to brainstorm with our clients in exploring possible deal structures, addressing issues identified during due diligence, planning on corporate control fight (in the context of a hostile takeover), assisting them with regulatory filings (e.g., FDI applications and merger filings) and post-closing matters, as well as providing in-depth total solutions to the legal issues that arise. In the review of Legal 500 and other leading legal directories, our firm is always highly recommended in the fields of corporate and M&A.


Ken-Ying specializes in mergers and acquisitions, personal data protection, e-commerce, Internet, telecommunications, and technology laws and regulations. Having advised on various forms of mergers and acquisitions, she is experienced in resolving both legal and commercial issues. Ken-Ying’s technology practices cover artificial intelligence, fintech, OTT, e-payment, P2P lending, sharing economy, domain names, e-signature, cybersecurity, e-trading, ICP, MOD, cable TV and satellite TV. Ken-Ying also advises clients on corporate governance, general compliance, offshore and onshore listing, employment and pharmaceutical-related matters. Ken-Ying has led the firm’s M&A Practice Group for more than 10 years, and formed the Personal Data Protection Practice Group at Lee and Li in 2012. In response to recent digitalization requirements and trends, she leads and established in 2021 the firm’s Digital, TMT and Data Privacy Practice Group.

Taiwan adopts a civil law system. Codified laws and regulations are the main source of law, while judicial decisions generally serve as a secondary source of law; the Council of Grand Justices has the power to interpret the Constitution, and its interpretations of laws and regulations are binding with the same legal effect as the Constitution.


The Company Act (for private and public companies) and the Securities Transaction Act (for public companies) are the main laws that govern corporate matters in Taiwan, while M&A transactions and intragroup restructuring are mainly governed by the Business Mergers and Acquisitions Act (“M&A Act“) and the Civil Code. The aforementioned laws are not all-inclusive, and other laws and regulations govern various aspects of corporate and M&A transactions, such as the Regulations Governing Public Tender Offers for Securities of Public Companies and the Regulations Governing Information to be Published in Public Tender Offer Prospectuses under which a critical set of regulations apply to tender offers in Taiwan.


Despite the foregoing, the practice of the competent authorities always plays an important role in transactions. For instance, all foreign investments in a Taiwan company are subject to the prior approval of the Investment Commission of the Taiwan Ministry of Economic Affairs (IC), which may affect the transaction timeline and certainty. Our firm is experienced in handling the regulatory filings (including the IC applications and merger filings) required for investing in Taiwan and assisting our clients in developing viable deal structures and timeline, as well as responding to the authorities’ inquiries efficiently.

Generally speaking, our cases come from two sources, those directly from clients and those referred by law firms which we work or collaborate with. After receiving a request, we will assign attorneys and/or specialists who are familiar with the relevant matters and provide our legal services within the time limit requested by the client. While most companies deal with their corporate matters internally, we frequently advise clients on regulatory matters (particularly, those clients whose businesses required a special permit; e.g., pharmaceutical companies and financial institutions), and assist clients with downsizing or expanding their businesses. Most of the cases for which our services are sought are relatively complex, as they require the assistance of experienced outside counsels like our firm for proper risk management and pragmatic solutions.

Our firm often assists clients in completing complex transactions, including privatization of listed companies. In practice, privatization is often structured as a one-step deal (where approval from 2/3 of the shareholders of the target can be obtained) or a two-step deal via a tender offer with a back-end merger or share exchange. In our recent deals, we assisted foreign listed companies in privatizing Taiwan listed companies – we not only fostered sensitivity to cultural differences between the parties, but also provided strategic advice and practical guidance to achieve the desired results. In addition, as both the acquiror and the target are listed companies, the need for all corporate actions and announcements to be strictly compliant with applicable listing requirements in both jurisdictions posed a challenge. We assisted the acquiror with navigating through all such compliance issues, and supported its communications with the Taiwan regulators in charge of foreign investments and stock exchange delisting.

As part of the global economic recession as well as the tension between Taiwan and the PRC, we do feel a slowdown of M&A activities, particularly cross-border deals, in Taiwan. Despite the foregoing, Taiwan’s semiconductor industry remains in the global leading position that attracts foreign investors. In addition, our government published the Taiwan’s Pathway to Net-Zero Emissions in 2050 (Pathway) in March 2022, which aims to reduce Taiwan’s carbon emissions to net zero by 2050, and continues to develop the green energy industry. Most M&A activities are expected to occur in the relevant industries, including renewable energy, electric cars and data centres. Hence we remain cautiously optimistic that the current downturn should be temporary, and that M&A activities in the aforementioned industries should pick up in the next few years.

As pointed out in our answer to Question 5 above, most deal activities relate to renewable energy, which is driven by the government policy as well as the global trend of sustainability. In addition, with the growth of the cloud services industry and the need for cloud computing, big data and storage, like other Asia Pacific countries, there is an increasing demand for hosting data centres onshore, and the data centre sites are acquired either by M&A deals or real estate deals or a combination of both. Given that the operations of data centres require substantial utilities, some investors also set green energy goals of energy efficiency and sustainability.

We represent clients from start-ups and SMEs to large firms including multibillion-dollar global corporations. While large firms usually have higher compliance standards and rely on our firm to provide an extensive range of legal services, SMEs and start-ups usually contact our firm for specific legal matters (e.g., investments) in their lifecycle.


In addition, we fully understand that the importance of a deal may not be measured by its size only, but other aspects as well; hence we always endeavour to assist our clients in keeping to their budget.

As mentioned above, our firm has various practice groups covering a full range of legal services that companies may require. Our extensive experience in the relevant fields allow us to assist entrepreneurs in not only understanding the legal requirements but also pursuing optimal opportunities. In addition to keeping up with the latest legislation, our firm is also members of industrial associations such as the Taiwan Internet and E-Commerce Association; being members enabled us to meet the companies in the relevant industries regularly and assist them in voicing their needs through various channels.

A large number of deals that our firm handled are cross-border transactions; therefore, we work with international and local firms in various jurisdictions on a daily basis and maintain an effective referral system with many of them. Should any of our clients need any foreign counsel’s advice on legal matters in other jurisdictions, we could quickly locate the right contacts for our client’s consideration. In addition, our firm frequently attends events held by Multilaw, IBA, IPBA and other international organizations for exchanging legal views across jurisdictions, strengthening existing relationships as well as developing new contacts globally.

The latest amendments to the M&A Act took effect on December 15, 2022. The protection of shareholders’ rights is strengthened, the scope of whale-minnow M&A is expanded and the flexibility of relevant tax arrangements is increased under the amendments.


Specifically, after the amendments took effect, implementing a whale-minnow M&A only requires the board’s approval but not the shareholders’; hence it would be easier for companies to adopt a resolution on whale-minnow M&A. In addition, the amendments to the tax arrangements rectified the conundrum that some M&A costs are non-tax deductible. Furthermore, upon a corporation’s dissolution due to a merger/spin-off, for individual shareholders who acquired the shares of the surviving company, the newly incorporated company, or the foreign corporation as a result of a merger/spin-off, the tax assessment of the dividend income under the Income Tax Act may be deferred until the third year following the year of acquisition and taxed in equal instalments over three years with an aim to promote a friendly regulatory environment for the M&A of startups.

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