The Regulations are prescribed in accordance with Paragraph 4 of Article 12 of the “Employment Insurance Act” (hereinafter referred to as the “Act”).
Insured people who are unemployed but intend to start their own businesses (hereinafter referred to as the “entrepreneurs”) may apply for entrepreneurial assistance from the Ministry of Labor (hereinafter referred to as the “MOL”) for the following items:
1. Entrepreneurial counseling and adaptive assessment.
2. Entrepreneurship courses.
3. Venture loans (hereinafter referred to as the “loan”) and interest subsidies.
4. Other related measures.
The above matters shall be entrusted by the MOL to its own subordinate agencies (institution) or commissioned to relevant agencies (institution), schools, groups, legal persons or institutions.
In order to carry out entrepreneurial counseling and adaptive assessment, the MOL may recruit consultants and, at its discretion, pay advisor fees for their counseling arrangements according to the needs of the entrepreneurs.
In order to organize entrepreneurial courses, the MOL may arrange both in-person and online courses to provide entrepreneurs with relevant entrepreneurial knowledge in business management, finance and marketing, as well as arrange enterprise internships when necessary.
A certificate of the number of hours entrepreneurs have spent in the aforementioned courses will be issued by the MOL.
Where entrepreneurial courses held by the MOL’s subordinate agencies (institution) or commissioned to relevant agencies (institution), schools, groups, legal persons or institutions, the said certificate shall be issued by those organizations.
Entrepreneurs who apply for the loan shall have the following qualifications:
1. Received entrepreneurship counseling and adaptive assessment from the MOL.
2. Participated in the entrepreneurial courses organized by the MOL or government agencies (institution) for at least 18 hours within 3 years.
3. Registered as the person responsible for the business but not registered for employment insurance and not responsible for other undertakings for 14 days before the registration date.
The undertakings mentioned in the Subparagraph 3 of the preceding article refer to one of the following conditions:
1. Those having completed the company registration or business registration according to relevant laws.
2. Such businesses as child day care centers, kindergartens, after-school care centers or supplemental preparatory classes shall complete registration of accreditation according to law.
3. Small businesses that are registered for taxation but are exempt from registration of accreditation according to the provisions of Article 5 of the Business Registration Act.
The loan applicant shall have application forms completed along with the following documents and information prepared:
1. Insured person data for employment insurance.
2. Business plan.
3. Photocopy of certificate documents of registration or tax registration issued by the competent authorities.
4. Photocopy of two sides of the ID Card.
5. Photocopy of a comprehensive credit report of applicant and Joint Credit Information Center within the most recent 3 months.
6. The original copy of an affidavit letter for the venture loans of the unemployed who are insured.
7. Photocopies of proofs of hours spent in entrepreneurial courses issued by the MOL or government agencies (institution).
Documents or information specified in the preceding paragraph not yet complete shall be supplemented as required within the notified period. Those who fail to supplement requested information or documents prior to the said deadline will have their applications rejected.
After the loan is approved, the loan applicant (hereinafter referred to as the “borrower”) may apply for the loan again with the same business during the loan period; however, such re-application is limited to 2 times.
Those who apply for this loan again are exempted from the required documents and information stipulated in Subparagraphs 1 and 7 of the first Paragraph of the preceding article.
The loan shall be handled by the loan-taking financial institution with their reserves.
Amount of the loan will be approved according to the venture capital required by the applicant, up to NT$ 2 million. However, for those who meet the provisions of Subparagraph 3 of Article 6, the maximum amount of loans is NT$500 thousand.
If the borrower reapplies for the loan according to Article 8, the amount of the first, second and third loans shall not exceed the maximum amount as prescribed in the preceding paragraph.
The maximum credit period of each loan is 7 years, and the principal and interest accruing thereof shall be paid in monthly installments by the borrower. However, with the approval of the loan-taking financial institution, the MOL may grant 1 year grace period for payment of interest without principal in each loan period.
The aforementioned loan interest rate is calculated based on the postal saving 2 year fixed savings floating interest rate plus an annual interest of 0.575 %.
Borrowers shall be exempt from interest during the first 3 years of the loan period and shall be subsidized in full by the MOL; the annual interest rate shall be 1.5% from the fourth year with the interest difference to be subsidized by the MOL. However, if the annual interest rate is less than 1.5%, borrowers shall bear the effective annual interest rate.
The purpose of the loan is limited to purchasing or leasing factories, business office, machinery, equipment or working capital.
For the purpose of examining the loan application, the MOL shall set up a review committee of 5 to 11 members, one of whom shall be the convener who is an employee of the MOL; the remaining members shall be appointed by the MOL in respect of the following persons:
1. 1 representative of Small and Medium Enterprise Credit Guarantee Fund of Taiwan (hereinafter referred to as the “SMEG”).
2. 2 to 7 representatives of loan-taking financial institutions.
3. 1 to 2 experts and scholars.
Members of the review committee all are unpaid positions. However, attendance fees and transportation expenses shall be paid to representatives of loan-taking financial institutions as well as to experts and scholars in accordance with the relevant provisions.
Members of the review committee shall attend in person and shall not attend by proxy.
Information obtained by members during the review committee process shall be kept confidential.
The convening of the review committee requires the attendance of more than a half of all the commissioners; each application will be transferred to loan-taking financial institutions subject to the majority of the attended members giving their consent.
In any of the following circumstances, members of the review committee must be recused and shall not participate in the meeting:
1. Where the member himself/herself or his/her spouse served any position or entrepreneurial counseling of the loan applicant’s business and dismissed less than a year ago.
2. Where the member himself/herself or his/her spouse are related within the third degree of kinship to the responsible person, directors and supervisors of the Board, managers or shareholders holding more than 10% of the shares of the loan applicant’s business.
3. Where the member himself/herself or his/her spouse has a common business or share of interest with the responsible person, directors and supervisors of the Board, managers or shareholders holding more than 10% of the shares of the loan applicant’s business.
4. One of the circumstances set forth in each Subparagraph of Article 32 in the “Administrative Procedure Act”.
If the loan applicant or his/her business is in any of the following circumstances, the loan shall not be approved:
1. Information obtained from the clearing house after inquiring shows that the loan applicant has been denied dealings as a sanction for unlawful use of credit instruments or the number of his/her unsettlement paid notes has reached the criterion for punishment.
2. Information obtained from the Joint Credit Information Center or learned from its credit process shows that the loan applicant has overdue outstanding principal, failed to pay the agreed installment for more than 1 month, interest payable lagged for more than 3 months, or overdue payment for credit card spending has resulted in the card issuers disabling his/her credit card and the overdue payment has not been paid off.
3. The loan applicant has been granted loans from the Micro-Enterprise Start-up Loan, Women Setting up Shop Loans, or Phoenix Micro Business Start-up Loan in accordance with the regulations. However, the paid off applicant shall not be subject to this limit.
The loan applicant shall, within 3 months from the date of receiving the notice of the examination result, carry out the loan procedures with the loan-taking financial institutions.
Failure to implement said procedures within the period specified in the preceding paragraph shall be justified to the MOL as to the reason prior to the expiration of the period of application for extension. The maximum period of extension shall not exceed 3 months and shall be limited to once only.
Financial institutions that handle the examination operation of the loan shall comply according to the provisions of the preceding article and verify that the business carried on by the loan applicant is suspended or closed, and the responsible person has changed.
The loan-taking financial institutions shall, within 14 days after the day the loan applicant applies for the loan according to the regulations in Paragraph 1, complete the review and appropriation of the loan.
Where a loan-taking financial institution fails to complete the review and appropriation within the period specified in the preceding paragraph, it shall state its reasons to the MOL.
In case the loan application has been examined and approved by the review committee but been returned or the amount of loan has been adjusted, the MOL may invite loan-taking financial institutions, the SMEG and the borrower to hold a coordination meeting to discuss the deal.
The responsibility for the performance guarantee required for the handling of this loan shall be supported by fund allocated by the MOL according to the provisions stipulated in Paragraph 3 of Article 12 of the Act to the SMEG, along with the matching fund provided by the SMEG.
If the aforementioned contributions and relative fund is inadequate to cover the responsibility for expenses of the performance guarantee required for the handling of this loan, the MOL and the SMEG shall be liable for their respective amounts of value.
Borrowers shall apply for a credit guarantee according to the relevant provisions of the SMEG with a guaranteed yield of 95%, and be responsible for a guarantee service charge according to the annual rate of guarantee service charge published by the SMEG at time of loan.
The loan is exempt from guarantor and collateral requirements.
Loan-taking financial institutions shall not charge the borrowers any fees other than the credit guarantee fees and the necessary credit inquiry fees.
Subsidies for the loan interest shall be applied by the loan-taking financial institutions to the MOL on a monthly basis.
The loan-taking financial institutions shall, on a monthly basis, compile and send details of relevant information regarding the borrower’s monthly payment, overdue collection and enforcement to the MOL for appropriation of the interest amount of the subsidies.
Where a borrower runs a business under any of the following circumstances, the MOL will stop the interest subsidy from the date of occurrence of the fact, and recover the spillover subsidy interest through loan-taking financial institutions on behalf of the MOL:
1. The business is suspended or closed.
2. The responsible person is changed.
If a borrower owes the payable principal and interest of the loan for a period of 6 months, the MOL shall cease the interest subsidy. However, after the borrower pays off such principal and interest and resumes normal payment, the MOL may continue the subsidy.
During the period in which the borrower owes the principal and interest of the loan as mentioned in the preceding paragraph, the MOL shall not subsidize the loan interest. The disbursed amount shall be recovered and returned to the MOL by the loan-taking financial institution on behalf of the MOL.
A borrower who has settled the principal and interest that are owed less than 6 months and restored to normal payment shall be regarded as a normal client and the interest will continue to be subsidized.
When the loan-taking financial institution has failed to examine the case according the requirements prescribed in Paragraph 3 of Article 18 herein, and the borrower is in any condition as defined in Article 17 or Article 23, the said institution shall return the already appropriated interest subsidy to the MOL.
If a borrower is a victim specified in the “Disaster Prevention and Protection Act,” he/she may propose the following application to the loan-taking financial institution within 6 months from the date of the disaster:
1. Suspending the payment of principal and interest of the loan for 6 months.
2. Extend the term of the loan payment for 6 months.
When a disaster defined in the “Disaster Prevention and Protection Act” occurs, the MOL may extend the period mentioned in the preceding paragraph by taking the characteristics of the disaster, the scope, and severity of the disaster into consideration.
A borrower who applies for suspending the payment of principal and interest on loans in accordance with Paragraph 1, shall provide one of the following documents:
1. The proof of disaster victim issued by a municipal, county (city) government, or a township office (town, village, or district).
2. The proof of injury and disease due to disasters.
3. The proof of severe injury or death of the borrower’s spouse, immediate blood relatives, or spouse's immediate blood relatives caused by the disaster.
4. Other documents specified by the MOL.
The provision of Paragraph 1 hereof does not apply if a borrower 2 has the circumstance specified in the provisions of Article 23 and Article 24.
If the loan-taking financial institution gives the borrower who applies for the assistance specified in Paragraph 1 a permission, a report shall be submitted to the MOL for reference.
During the period of suspending the payment of principal and interest of the loan, the interest shall be subsidized by the MOL to the borrower, except the circumstances stipulated in Article 23.
After the expiration of the payment period regarding the principal and interest on the loan, the borrower shall resume the original payment schedule according to the agreement between the borrower and the loan-taking financial institution.
Both the MOL and the SMEG may, in conjunction with the relevant agencies, visit the business operations of the borrower and the operation conditions of the loan-taking financial institution in the loan business.
The visit mentioned in the preceding paragraph may be entrusted to non-governmental organizations for handling.
Unless caused by intentional gross negligence or unlawful infliction, the loan-taking financial institution, the SMEG and contractor personnel at all levels shall be exempt from all liability damages of bad debts.
Entrepreneurs counseled by the MOL or units assisting in the promotion of the entrepreneurial business may be selected and rewarded by the MOL for excellent performance.
The funds required for these measures shall be financed by the funds appropriated pursuant to Paragraph 3 of Article 12 of the Act.
All documents and formats required under the Regulations shall be prescribed by the MOL.
The Regulations shall be implemented on the promulgation day.