Best Project Finance Lawyers in Taiwan

About Project Finance Law in Taiwan, Taiwan

Project finance is a complex financial structure commonly used for large infrastructure and industrial projects. In Taiwan, project finance often involves raising non-recourse or limited-recourse funding based on the projected cash flows of the asset being developed, rather than the balance sheets of the project sponsors. Common projects include energy facilities, transport infrastructure, and telecommunication networks. Legal mechanisms are put in place to allocate risks appropriately among various stakeholders, including lenders, sponsors, contractors, and government entities. Taiwan's robust legal system and commitment to international investment standards make it an attractive location for such financing structures.

Why You May Need a Lawyer

Navigating project finance in Taiwan can be intricate due to the intersection of multiple legal areas such as banking, securities, construction, and regulatory approval processes. Common scenarios where legal assistance is crucial include:

• Structuring the finance agreements and determining recourse options
• Negotiating with lenders and syndicates
• Securing necessary government permits and approvals
• Drafting and reviewing contracts with contractors and suppliers
• Ensuring compliance with securities regulations and foreign investment laws
• Managing risks relating to environmental and land use laws
• Handling disputes between stakeholders

A legal expert ensures project participants fully understand their liabilities and comply with all legal requirements throughout the life of the project.

Local Laws Overview

Key laws impacting project finance in Taiwan include the Civil Code, the Company Act, the Securities and Exchange Act, and sector-specific statutes such as the Renewable Energy Development Act. Licensing and permitting regimes are governed by regulatory agencies overseeing utilities, energy, transportation, and environmental protection. For foreign investors, the Statute for Investment by Foreign Nationals and the Statute for Investment by Overseas Chinese are relevant. Security interests are typically created via pledges, mortgages, and assignment of receivables, and can be registered and enforced according to the law. Taiwan’s legal system supports various project finance techniques including public-private partnerships (PPPs), build-operate-transfer (BOT) schemes, and limited recourse financing.

Frequently Asked Questions

What is the typical structure of a project finance transaction in Taiwan?

Project finance structures in Taiwan usually involve setting up a special purpose vehicle (SPV), entering into long-term contracts, and securing financing from a syndicate of lenders, with recourse limited mainly to the project assets.

Can foreign lenders participate in project finance deals in Taiwan?

Yes, foreign lenders and investors can participate, subject to compliance with foreign exchange and investment regulations, and after securing the necessary government approvals.

What security interests can be granted to lenders?

Lenders can take security over project assets, contracts, receivables, accounts, and shares of the project company. Mortgages, pledges, and assignments are commonly used.

How are government permits and approvals handled?

Permits depend on the project sector. Processes may involve environmental impact assessments, utility or infrastructure licensing, and specific sector regulator approvals.

Are there restrictions on foreign investment in project finance?

Taiwan generally encourages foreign investment but some highly regulated industries such as energy, telecommunications, and transportation may have restrictions or require special permits.

What are the common risks involved in project finance?

Typical risks include construction delays, cost overruns, regulatory changes, off-taker creditworthiness, environmental compliance, and currency fluctuations, all of which need careful legal management.

How long does it take to close a project finance transaction?

The timeline varies by project complexity but it often takes several months to a year, depending on regulatory approvals and negotiation of agreements.

Is there recourse for lenders if the project fails?

In most project finance structures in Taiwan, lenders have limited or no recourse to the project sponsors beyond the collateral and assets of the project itself.

What is the role of public-private partnerships (PPPs) in Taiwan?

PPPs are widely used for infrastructure projects. The government provides the framework and may offer incentives or guarantees to encourage private participation.

What legal support is needed after financial close?

Ongoing legal advice is essential for contract management, handling disputes, managing regulatory compliance, and ensuring proper implementation and delivery of the project.

Additional Resources

If you need further information or assistance, consider reaching out to the following resources and organizations:

• Financial Supervisory Commission (FSC) - Regulator for financial markets and services
• Ministry of Economic Affairs (MOEA) - Oversees industry, commerce, and energy projects
• Bureau of Energy, Ministry of Economic Affairs - For energy sector projects
• Public Construction Commission - Handles PPP and infrastructure projects
• Taiwan Bar Association - For finding qualified legal professionals
• Project finance divisions of major banks in Taiwan

Next Steps

If you are considering project finance in Taiwan, consider these steps:

• Define your project requirements and objectives
• Consult with an experienced project finance lawyer to evaluate feasibility and compliance
• Prepare necessary documents and establish a project company, if needed
• Identify potential partners, lenders, and investors
• Work with your legal advisor to negotiate and draft required contracts and agreements
• Submit all regulatory filings and obtain the required licenses and permits
• Maintain regular legal support throughout the project’s implementation and operation

Consulting with a qualified lawyer early in the process is the best way to ensure your project is structured for success and in compliance with all applicable laws and regulations in Taiwan.