Treasury & FX in Taiwan

Members from Asia and EU shared their experiences in Taiwan, including: inclusion in global cash pooling structures, Hedging & hedge accounting, Factoring, Local overdrafts & funding & Virtual accounts

Treasury & FX in Taiwan

Call date: 8th May 2019

The call was chaired by Damian Glendinning, whose commentary appears below.

If you would like a copy of this report, please get in touch.

Click here for more reports on South East Asia

Chairman’s commentary

Taiwan has a modern and vibrant economy. It is home to a large portion of the world’s IT powerhouses (at least, the companies which actually make the products – usually in China for US brands), and it has a financial sector which has benefitted from large numbers of bankers who have lived and studied abroad. As a result, it has gone from being a highly regulated jurisdiction with relatively stringent exchange controls to a place where most things are possible, and where we see quite a high degree of innovation in the financial sector.

The discussion was lively, with most participants practising one form or another of cash pooling, often cross border. This raised the question of whether there are any remnants of exchange controls. The fact that none of the participants could give a definitive statement of the rules indicates that they are not being stringently enforced, and they are clearly not a significant obstacle to doing business. For the record, the rules on cross border cash remittances are:

  • There are no restrictions on cross border remittances which do not involve exchanging New Taiwanese Dollars (NTD)
  • If the transaction involves exchanging NTD into a foreign currency, up to USD 50m a year can be remitted without authorisation. Beyond that amount, prior approval from the Central Bank of the Republic of China (Taiwan) is required. This rule does not apply to trade settlements or capital repatriation, especially in the form of dividends.

In other words, if you have natural USD or EUR flows in Taiwan, you can freely include them in cross border pooling arrangements. If you need to exchange NTD into a foreign currency, this limit will apply.

For further details, please refer to the links below:

from the Central Bank of China;

the other, US government’s export department. 

Also, for those who are not intimately familiar with Asia, it is always best to avoid confusion: Taiwan’s official name is the Republic of China, not to be confused with the People’s Republic of China, with its capital in Beijing. Relations between the two are complex – but, when in the PRC, it is preferable to refer to Taiwan as a “territory”, not as a country.

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