Best Corporate Governance Lawyers in Taiwan

About Corporate Governance Law in Taiwan, Taiwan

Corporate governance in Taiwan refers to the system of rules, practices, and processes by which corporations are directed and controlled. It involves balancing the interests of a company’s stakeholders, including shareholders, management, customers, suppliers, financiers, government, and the community. In Taiwan, healthy corporate governance is considered essential to enhance transparency and accountability, deter corporate misconduct, and support sustainable business growth. The legal and regulatory framework for corporate governance covers company structure, management responsibilities, disclosure requirements, shareholder rights, and mechanisms for resolving disputes. With Taiwan’s increasing integration into global markets, its corporate governance standards are frequently updated to align with international best practices.

Why You May Need a Lawyer

Legal guidance is critical when navigating corporate governance in Taiwan. Common situations requiring legal assistance include establishing a company and drafting its bylaws, complying with disclosure/reporting standards, handling shareholder disputes, protecting minority shareholder rights, conducting board meetings, merging or acquiring businesses, amending articles of incorporation, implementing compliance or anti-corruption programs, and responding to government investigations or regulatory inquiries. Legal experts can help ensure your business operations match the relevant laws, avoid costly penalties, and manage risk effectively.

Local Laws Overview

Corporate governance in Taiwan is primarily governed by several laws and regulations, including the Company Act, Securities and Exchange Act, and Enterprise Mergers and Acquisitions Act. The Company Act regulates the formation, organization, and management of companies. It sets out requirements for directors, supervisors, shareholder meetings, and disclosure of significant business decisions. The Securities and Exchange Act enforces rules for publicly listed companies, emphasizing transparency, timely disclosure, and measures to prevent insider trading and securities fraud. Public companies must also comply with Corporate Governance Best-Practice Principles published by the Taiwan Stock Exchange and the Financial Supervisory Commission (FSC), which provide detailed recommendations on board structure, independence, internal control systems, and shareholder engagement. Compliance with these local laws and regulations is vital for any business operating in Taiwan.

Frequently Asked Questions

What is corporate governance and why is it important in Taiwan?

Corporate governance refers to the set of rules and processes companies use to run their business responsibly and in alignment with laws and stakeholder interests. In Taiwan, strong governance helps prevent fraud, attracts investment, and increases long-term business success.

Which laws govern corporate governance in Taiwan?

The main laws are the Company Act, Securities and Exchange Act, and relevant regulations issued by the Financial Supervisory Commission. Publicly listed companies are also subject to the Taiwan Stock Exchange’s Corporate Governance Best-Practice Principles.

What are the requirements for a company’s board of directors in Taiwan?

The Company Act mandates the composition, powers, and responsibilities of the board. Public companies must also comply with requirements on independent directors, board size, gender diversity, and regular board evaluations.

What are the disclosure obligations for companies?

Companies in Taiwan must disclose financial statements, major transactions, internal control systems, and other significant information. Listed companies have stricter and more frequent reporting obligations to safeguard investors.

How are shareholder rights protected?

Shareholders have legal rights to vote, receive dividends, and access critical company information. Minority shareholders benefit from protections preventing unfair prejudice and abusive actions by controlling shareholders.

What are common corporate governance issues in Taiwan?

Common issues include conflicts of interest, lack of transparency, insufficient board oversight, insider trading, and related party transactions. Strengthening governance helps address these challenges.

Can legal disputes among shareholders be resolved through litigation?

Yes, but alternative methods like mediation or arbitration are often encouraged. Taiwan’s courts also provide mechanisms like derivative actions for shareholders seeking remedies against directors or officers.

How does the government enforce corporate governance standards?

The Financial Supervisory Commission and other regulatory bodies monitor compliance, investigate misconduct, and issue penalties for violations. Companies risk fines, lawsuits, or public reprimand for non-compliance.

Are foreign investors protected by corporate governance laws in Taiwan?

Yes. Taiwan’s legal framework offers protections for all investors, including foreign shareholders, and encourages transparent business practices to attract international investment.

What is the role of company supervisors or audit committees?

Supervisors or audit committees review the actions of the board and executives, ensuring that company affairs comply with the law and safeguarding shareholder interests, particularly in public companies.

Additional Resources

Several organizations and governmental bodies can provide valuable guidance on corporate governance in Taiwan. These include the Financial Supervisory Commission (FSC), Taiwan Stock Exchange (TWSE), Taipei Exchange (TPEx), and the Ministry of Economic Affairs (MOEA). The Taiwan Corporate Governance Association is a non-profit organization offering educational resources and events. Legal professionals and certified public accountants (CPAs) are also excellent sources for in-depth advice tailored to your specific needs.

Next Steps

If you require legal assistance with corporate governance in Taiwan, consider consulting an experienced lawyer licensed in Taiwan and familiar with local regulations. Prepare relevant documents, such as your company’s articles of incorporation, meeting minutes, and any government filings. During your consultation, clearly explain your objectives and challenges to receive focused legal guidance. You can reach out to local law firms specializing in corporate governance, attend seminars hosted by professional associations, or contact the regulatory bodies for initial advice. Taking prompt action will help you address any compliance issues efficiently and protect your business interests in Taiwan.