A Taiwan bank that meets the following requirements may apply to the Competent Authority for approval to make equity investment in a bank in Mainland Area:
1. The bank is in compliance with the law, is soundly managed and has not been subject to any disciplinary action, or has been subject to disciplinary action but specific remedial actions have been taken therefor and accepted by the Competent Authority within three (3) years prior to application;
2. The bank’s ratio of equity capital to risk-weighted assets after deducting the amount allocated for the proposed equity investment is 10% or higher;
3. The bank’s non-performing loan ratio is 2% or lower during the latest fiscal half year;
4. The bank’s loan loss coverage ratio is 60% or higher during the latest fiscal half year;
5. The bank have international financial knowledge and experience; and
6. The bank has established a branch and operated business in a member country of OECD for five years or longer, and said branch is free of major regulatory violation and free of remedial actions to be taken for deficiencies found in a financial examination within one year prior to application.A Taiwan bank that meets the requirements set forth in Subparagraphs 1 to 4 of the preceding paragraph may apply to the Competent Authority for approval to make equity investment in a non-bank financial institution in Mainland Area.
Matters not specified in these Regulations with respect to equity investment in financial institutions in Mainland Area by Taiwan banks shall be governed by Article 74 of the Banking Act.

A Taiwan financial holding company that meets the following requirements may apply to the Competent Authority for approval to make equity investment in a financial institution in Mainland Area:
1. The financial holding company is in compliance with the law, is soundly managed and has not been subject to any disciplinary action, or has been subject to disciplinary action but specific remedial actions have been taken therefor and accepted by the Competent Authority within three (3) years prior to application;
2. The group’s capital adequacy ratio after the proposed equity investment is 110% or higher;
3. The group’s double leverage ratio after the proposed equity investment is 115% or lower.
Matters not specified in these Regulations with respect to equity investment in financial institutions in Mainland Area by Taiwan financial holding companies shall be governed by Article 36 of the Financial Holding Company Act.

If a third-area subsidiary bank meets the requirements set forth in subparagraphs 1 to 4, Paragraph 1 of Article 47, its Taiwan parent company may apply to the Competent Authority for approval for said third-area subsidiary bank to make equity investment in a financial institution in Mainland Area.
For a third-area subsidiary bank to make equity investment in a non-financial institution in Mainland Area, its Taiwan parent company shall apply to the Ministry of Economic Affairs for approval in accordance with the Regulations Governing Investment or Technical Cooperation in Mainland Area.

A Taiwan bank or financial holding company intending to make equity investment in Mainland Area shall submit the following documents to the Competent Authority for approval:
1. Application;
2. Investment plan, including the strategic objective of investment, expected benefits, sources of funds, fund utilization plan, and fund recovery plan;
3. Minutes of the board resolution;
4. A calculation worksheet for the ratio of equity capital to risk-weighted assets of the bank or financial holding company after deducting the amount allocated for the proposed equity investment, or a calculation worksheet for the group’s capital adequacy ratio and double leverage ratio after the proposed equity investment;
5. Details of investments made and benefit analysis as of the date of application;
6. CPA-audited or reviewed financial report for the latest fiscal year;
7. An equity investment agreement which should show that the financial and business information of the invested company will be made available and the strategic objective of the investment will be performed; and
8. Such other information or documents as may be required by the Competent Authority.
When a third-area subsidiary bank intends to make equity investment in Mainland Area, its Taiwan parent company shall submit documents set out in the preceding paragraph to the Competent Authority for approval.

A Taiwan bank or financial holding company must have obtained the approval of the Competent Authority before applying to [the financial authority in] Mainland Area for making equity investment in the local financial institutions. When the Taiwan bank or financial holding company changes the planned investment amount or shareholding, it shall submit relevant documents to the Competent Authority for approval.
A Taiwan bank or financial holding company shall promptly inform the Competent Authority after obtaining approval from the financial authority in Mainland Area [to make equity investment in a local financial institution] and submit the following documents to the Competent Authority for recordation:
1. An approval letter from the financial authority in Mainland Area; and
2. Amount of investment, the investee and the investee’s equity structure.

Taiwan banks or financial holding companies shall submit relevant documents to the Competent Authority for approval before they transfer their shareholding in a financial institution in Mainland Area to others.

When a Taiwan bank or financial holding company intends to increase its equity investment in a financial institution in Mainland Area, the bank or financial holding company shall submit documents to the Competent Authority for approval in accordance with Paragraph 1 of Article 50 herein. If the shareholding of the bank or financial holding company in the financial institution in Mainland Area exceeds 50 percent of the financial institution’s total voting shares outstanding or total capital, the bank or financial holding company shall apply to the Competent Authority for approval pursuant to Article 37 herein.

A Taiwan bank or financial holding company shall promptly inform the Competent Authority by submitting a report on the particulars of the event and relevant information if its invested financial institution in Mainland Area has any of the situations below:
1. Changing of business items or major management policy.
2. Changing of capital that results in change to the original ownership interest of the Taiwan bank or financial holding company.
3. Major investments.
4. Dissolved or suspended business.
5. Changing the name of the institution.
6. Merging, transferring, or assuming all or an essential part of assets or business of another financial institution.
7. Undergoing reorganization, liquidation or bankruptcy proceedings.
8. Major loss has occurred or is foreseeable.
9. Having committed a material violation or business license being revoked or annulled by the financial authority in Mainland Area.
10. Other material events.
With respect to any of the situations specified in Subparagraph 1 to 7 of the preceding paragraph, a Taiwan bank or financial holding company shall report to the Competent Authority in advance.

Taiwan banks and financial holding companies shall input the basic and operating information of their invested financial institution in Mainland China into an information reporting system designated by the Competent Authority and update the information when changes occur.

Article 51 to the preceding article shall apply mutatis mutandis to the Taiwan parent company where its third-area subsidiary bank intends to make equity investment in a financial institution in Mainland Area.