Rules Eased for Stock Procurement by Foreign Employees of Overseas Branches

Following its granting of permission for the issuance of stock warrants to foreign employees of overseas subsidiaries, the Financial Supervisory Commission (FSC) recently announced a further relaxation that provides the same for overseas branches. This provision will help companies attract overseas talent. The FSC explains that if a company listed on the stock or over-the-counter market wishes to issue stock warrants to its foreign employees working overseas, its overseas branches may, in accordance with Article 10, Paragraph 1 of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals, submit the necessary documentation along with a letter of permission from the Central Bank’s Department of Foreign Exchange, and register a special investment account with the Taiwan Stock Exchange. If the company has more than one overseas branch, it may choose either to open individual accounts for them or to open a single common account. The use of such an account, however, will be limited to the remittance of funds for the exercise of stock warrants by the foreign employees of overseas branches, and to the exercise of other rights related to stocks. The account may not be used for other types of securities trading. The FSC further indicates that shareholding employees of overseas braches should exercise their voting rights by entrusting those rights to a Taiwanese proxy designated by the overseas company, as in the method used by current overseas institutional investors.