The administration of state-owned enterprise shall comply with the provisions of the Administrative Law of State- Owned Enterprise (hereinafter the “Law”).

The purpose of establishing state-owned enterprise is to develop national capital, promote economic development, and improve the livelihood of the people.

State-owned enterprise as referred to in this Law are of the following types:
1. Enterprises which are solely owned by the State;
2. Enterprises, which, in accordance with special regulations, are jointly owned by the State and private individuals;
3. Enterprises, which, in accordance with the Company Law, are jointly owned by the State and private individuals, and in which the State holds more than 50% of the capital.
Those enterprises, which, in accordance with separate contracts, are jointly owned by the State and foreigners shall be governed by such contracts.
The chairperson or general manager and president of the enterprises, which the state holds less than 50% of the shares,are appointed by the government.Those chairpersons and presidents on behalf of the state shares may be requested to report to and to be interrogated by the Legislative Yuan, concerning budget and operation examined by the shareholders congress.

State-owned enterprise shall be operated in a manner befitting a business so that they may be able to support themselves, achieve continued development, and increase the national income without incurring losses. However, enterprises established for demonstration purposes or for other reasons specified by government are not subject to the provisions of this law.

The National Treasury is responsible for appropriating the funding necessary for government’s investment in national enterprises. If stocks are to be issued in accordance with applicable regulations, the stocks issued shall be placed under the custody of the National Treasury.

Unless otherwise specified in applicable regulations, the rights and responsibilities of state-owned enterprise shall be the same as those of private enterprises of similar categories.

The competent authorities overseeing state-owned enterprise are prescribed in the various laws governing organization of the ministries, committees, or agencies of the Executive Yuan.

The competent authorities shall have the following functions:
1. To establish, consolidate, reorganize, and dissolve the subordinate state-owned enterprise
2. To approve the operating plans and guidelines of the subordinate state-owned enterprise
3. To appoint and remove important persons of the subordinate state-owned enterprise
4. To set up the administrative framework of the subordinate state-owned enterprise
5. To inspect and evaluate the operations of the subordinate state-owned enterprise
6. To make the financial plans for the subordinate state-owned enterprise.
Where special regulations exist, the aforementioned appointment and removal of important persons referred to in paragraph 3 shall be governed by such regulations.

Chief managerial agencies may be set up as appropriate for the purpose of administering the following state-owned enterprise:
1. State-owned enterprise of the same nature
2. State-owned enterprise sharing a close operating relationship

The competent authorities shall submit the regulations regarding the organizations of state-owned enterprise to the Executive Yuan, which, in turn, shall refer to the Legislative Yuan for review and approval.