A securities firm that is simultaneously a securities underwriter, securities dealer, and securities broker under Article 16 of the Securities and Exchange Act may, through its head office, apply to the competent authorities for a license to establish within the ROC an offshore securities branch with independent accounting to conduct offshore securities businesses.
An offshore securities branch established pursuant to the preceding paragraph shall allocate working capital for its operation. The minimum amount of the working capital shall be set by the FSC.
The regulations governing the requirements for the application for approval mentioned in paragraph 1 hereof, application procedure, required documentation and other matters to be complied with shall be prescribed by the FSC and the CBC.

An offshore securities branch may only conduct the following types of business:
1.Selling foreign currency financial debentures or other certificates of debt issued by its head office, to natural persons, juristic persons, government agencies, or financial institutions within or outside the territory of the ROC;
2.Conducting commission agency, brokerage, and agency businesses of foreign currency denominated securities, or other foreign currency denominated financial products approved by the competent authorities, for natural persons, juristic persons, government agencies, or financial institutions within or outside the territory of the ROC;
3.Conducting borrowing or lending of funds in connection with securities businesses, and buying and selling of foreign currency denominated securities or other foreign currency denominated financial products approved by the competent authorities, between the offshore securities branch and other financial institutions, and between the offshore securities branch and natural persons, juristic persons, government agencies, or financial institutions outside the territory of the ROC;
4.Underwriting securities issued outside the territory of the ROC;
5.Conducting account custody, agency, and consulting businesses related to the businesses specified in the subparagraphs above, for natural persons, juristic persons, government agencies, or financial institutions within or outside the territory of the ROC;
6.Conducting consulting relating to asset allocation or financial planning, and sales services in connection with foreign currency denominated securities or other foreign currency denominated financial products approved by the competent authorities, for natural persons, juristic persons, government agencies, or financial institutions within or outside the territory of the ROC;
7.Other foreign currency businesses related to securities approved by the competent authorities.
The term, "financial institutions within the territory of the ROC" as used in any subparagraph of the preceding paragraph shall mean any financial institution approved by the CBC to engage in foreign exchange businesses or any offshore securities branch established in accordance with this Act.

An offshore securities branch may designate another branch of the same securities firm that has been authorized by the CBC to conduct foreign exchange businesses (the "designated branch") to handle the business activities set out in paragraph 1 of the preceding Article. The businesses handled by the designated branch shall be booked on the account books of the offshore securities branch.
The scope of business that the designated branch may handle includes cross-strait securities businesses approved by the competent authorities in accordance with the Act Governing Relations between the People of the Taiwan Area and the Mainland Area. The control and supervision of such activities shall be handled in accordance with the regulations related to cross-strait securities businesses. The offshore securities branch shall coordinate and be responsible for such control and supervision.
If the designated branch charges the offshore securities branch reasonable fees for handling any of the offshore securities branch's activities in order to pay for operating expenses, such revenue shall be booked as the designated branch's income and be duly subject to taxation. If the designated branch does not charge the offshore securities branch any such fees, the expenses for handling the offshore securities branch's businesses may not be booked as expenses.

Unless otherwise provided in this Act, the conducting by an offshore securities branch of the businesses specified in the subparagraphs of Article 22-4, paragraph 1, shall not be subject to the restrictions in relevant articles of the Foreign Exchange Regulation Act, the Securities and Exchange Act, the Trust Enterprise Act, the Securities Investment Trust and Consulting Act, and the Futures Trading Act.
The FSC, in consultation with the CBC, shall adopt regulations for offshore securities branches concerning finances, businesses, utilization of funds, risk management, time limit on and total balance of interbank call loans or financing obtained from other financial institutions, the handling of trading across foreign currencies with designated foreign exchange banks, offshore banking branches, or offshore financial institutions, and other matters requiring compliance.

Income from offshore securities businesses operated by offshore securities branches shall be exempt from business income tax. However, income from conducting businesses in the subparagraphs of Article 22-4, paragraph 1 with natural persons, juristic persons, government agencies, or financial institutions within the territory of the ROC shall be subject to taxation or exemption as specified in the Income Tax Act.
Sales revenue from offshore securities businesses operated by offshore securities branches shall be exempt from business tax. However, sales revenue from sales to natural persons, juristic persons, government agencies, or financial institutions within the territory of the ROC shall be subject to taxation or exemption as specified in the Value-Added and Non-Value-Added Business Tax Act.
All types of certificates used in offshore securities businesses operated by offshore securities branches shall be exempt from stamp tax. However, certificates issued in connection with transactions with natural persons, juristic persons, government agencies, or financial institutions within the territory of the R.O.C or with respect to business activities other than those specified in the subparagraphs of Article 22-4, paragraph 1, shall be subject to taxation or exemption as specified in the Stamp Tax Act.
Interest paid in offshore securities businesses operated by offshore securities branches, to financial institutions, natural persons, juristic persons, and government agencies outside the territory of the ROC and income derived from structured product transactions, shall be exempt from income tax withholding.
The exemptions from business income tax, business tax, and stamp tax, and exemption from income tax withholding, under the preceding four paragraphs, shall be in force for a period of 15 years from the effective date of this Article.

Articles 8 to 10, 18 to 20, and 21-1 shall apply mutatis mutandis to offshore securities businesses operated by offshore securities branches.

If an offshore securities branch commits any of the following acts, the competent authorities may, depending on severity of the offense, impose a warning, order the securities firm to remove its directors, supervisors, or managerial officers from their positions, suspend all or a part of the businesses operated by the head office or branch office for not longer than 6 months, or void or revoke the business license of the head office or branch office:
1.Conducting any businesses other than that specified in Article 22-4, paragraph 1.
2.Violating Article 8 or 9 applied mutatis mutandis under Article 22-8.
3.Violating provisions of the regulations adopted under Article 22-6, paragraph 2, concerning finances, businesses, utilization of funds, risk management, time limit on and total balance of interbank call loans or financing obtained from other financial institutions, or the handling of trading across foreign currencies with designated foreign exchange banks, offshore banking branches, or offshore financial institutions.
If any director, supervisor, or employee of a securities firm is found to have committed any act which violates this Act or another related act or regulation, and if such violation may affect the normal operation of offshore securities businesses, the competent authority, in addition to ordering the said securities firm to suspend business operation of such person for not more than 1 year or remove such person from his position at any time, may also impose sanctions set out in the preceding paragraph depending on the severity of the violation.

Anyone who counterfeits, alters, destroys, conceals, or obscures working papers or relevant records or documents with intent to impede inspection of the offshore securities branch by the competent authorities or investigation of the offshore securities branch by a judicial agency shall be punished with imprisonment for not less than 1 year and not more than 7 years and in addition thereto a criminal fine of not more than NT$20,000,000 may be imposed.

An offshore securities branch that fails to file with the competent authority for recordation, or to provide information concerning the business or financial condition or other reports, or to report to the FSC for approval and notify the CBC, under Articles 20 or 21-1 as applied mutatis mutandis under Article 22-8, shall be imposed an administrative fine of not less than NT$240,000 and not more than NT$2,400,000.
In addition to imposing an administrative fine under the preceding paragraph, the competent authorities also shall order the person to comply within a specified time period; if the person fails to comply within the specified period, the competent authorities may order a new period for compliance and impose additional administrative fines of not less than NT$480,000 and not more than NT$4,800,000 for each successive failure to comply until corrective action has been taken.
For violations under the preceding two paragraphs, the individual person responsible for the act will be imposed with the above fines.