The PE Committee appreciates the government’s efforts to engage in dialogue with industry stakeholders and undertake recent reforms aimed at removing hurdles for investment in Taiwan. These reforms have helped create a friendly business and investment environment for management, shareholders, and other stakeholders through continuous follow-up of clarification and communication with the industry on the Company Act amended in 2018 and the proposed amendment to the Business Mergers & Acquisitions Act (M&A Act) in 2020.
In our paper last year, we recommended greater clarity on key issues such as take-private transactions, delistings, etc. We understand that the proposed amendment to the M&A Act responds to these suggestions to a certain extent, although it doesn’t go quite far regarding the delisting threshold and disclosure requirement. We assume that the implementation rules to be adopted under the proposed amendment will provide clearer disclosure requirements.
PE investment has made important contributions to Taiwan’s economy. In the first and second financial reforms in 2001 and 2008, for example, PE funds helped stabilize conditions by acquiring non-performing loans, making substantial investments in various financial institutions, and assisting the Taiwan financial industry in improving its performance.
Transparency has never been an issue for the PE funds. The above-mentioned transactions not only successfully brought in new technologies, resources, and concepts for the top-line market players, but also provided Taiwan products and services with exposures to global market. Given the current market turmoil due to the recent COVID-19 outbreak, it may be an appropriate time to partner with PE investors to assist in any recovery program by leveraging their global resource. The PE Committee is more than pleased to work with the Taiwan administrations to provide foreign investors (including PE funds) with a fair and open investment market.
While it is expected that the coronavirus outbreak will continue to have a significant impact on the global economy and reshape our way of living, the PE Committee believes that this also gives the industry a spectacular chance to find new business opportunities and learn how to thrive on challenges. The Committee notes that the strengths brought in by international PE funds include advanced industrial technologies, operational strategies, financial discipline, human resources, management techniques, new marketing ideas, ESG (Environmental, Social and Governance), etc. In this way, PE can make a great contribution to the industries earmarked by the Taiwan government for priority development, especially the 5+2 Innovative Industries that the Taiwan government has been focusing on for the coming decades.
The PE Committee offers the following recommendations as ways to continue the positive trends evident over the past year.
Suggestion 1: Enhance clarity on key issues that may be considered obstacles to PE investment.
1.1 We are aware of concerns regarding PE funds investing in Taiwan banks, insurance companies, and other financial service providers, as well as concerns regarding circumvention of restrictions on Chinese investment via fund structures. The Committee hopes to actively work with the government to develop guidelines to address these concerns in a manner that will set clear and balanced parameters while facilitating appropriate PE investment.
1.2 The Committee hopes that forthcoming amendments to the M&A Act will strike a balance between protecting minor shareholders and encouraging M&A activity. The draft amendment proposed by the Ministry of Economic Affair emphasizes the protection of minority shareholders’ rights, such as allowing minority shareholders voting against a merger or acquisition in a shareholders’ meeting to exercise appraisal rights, the disclosure of interests involved and the voting tendency of 10% of shareholders (whether having conflict of interest or not) before a shareholders’ meeting, and raising the delisting threshold from 2/3 of total shares to 3/4. The PE Committee urges that equal attention be given in the amendment to how to provide a friendly regulatory framework for M&A activities that may help improve business operational efficiency as indicated in Article 1 (Preamble) of the M&A Act. Further and most importantly, foreign investors should be treated equally and fairly, whether in terms of procedures, incentives, or taxation.
1.3 The Committee understands that the Taiwan government has introduced the 5+2 Industrial Innovation Plan which sets out a blueprint of industrial focus for the coming decades. We welcome a more friendly investment regulatory framework to allow more foreign PE resources and capital to participate in the plan, particularly large-cap international PE firms.
1.4 The Committee suggests that the Taiwan administration establish a task force to provide an efficient communi-cations channel through which the PE funds and PE Committee may share their global experience and help shape the governance level of the capital and investment markets in Taiwan.
Suggestion 2: Explore how prudent investment by public pension funds in alternative assets like private equity could help meet national pension fund obligations.
Taiwan is grappling with very high public pension obligations, with the National Audit Office projecting total contingent liabilities stemming from public pension payments of around NT$18 trillion (US$600 billion) over the next 30 years. There are several ways to address this challenge. Taiwan could reduce public pension benefits, which is already being done in some cases even if it is not always popular. Another option is to increase contributions from employees to close the gap between revenue and outlays for pension funds, but this step would place an increased burden on workers. Finally, pension funds could seek to meet their obligations by increasing the returns on their invested capital. This choice would reduce the pressure on the government and pension funds to take the unpopular steps of either reducing benefits or increasing contributions.
Investment by public pension funds into alternative assets such as PE is now an established practice in such developed global markets such as the U.S. and Canada and a growing trend in Asian markets including Singapore, South Korea, and Japan. These alternative investments are typically made up of a mix of PE, hedge funds, real estate, and infrastructure. There has been limited investment into alternative assets by public pension funds in Taiwan. By contrast, for large platforms in the U.S. such as CalPERS and Texas Teachers, allocations to PE and other alternative investments constitute 20% and 32%, respectively, and rise to 42% for the Canada Pension Plan. In Asia, the more mature sovereign wealth funds and pension funds have been increasing their allocations.
Singapore’s GIC had an allocation of 21% by end of 2017. Korea’s KIC had allocation of 16% in 2016 and in a report last September announced plans to raise it to 20% by 2020. The National Pension Service of Korea currently allocates 11% of funds to alternative assets, and according to a 2018 report, Korea’s Ministry of Health and Welfare has announced its intention to increase its allocation to PE and alternative assets to around 15% by the end of 2023 when its assets under management are expected to exceed 1,000 trillion won (US$931 billion).
Additional large funds in Asia that are now allocating to alternatives like PE include Japan Post Bank and Japan’s Government Pension Investment Fund (GPIF). Japan Post Bank reported in March 2018 that it had allocated about ¥1.6 trillion, or around 2% out of total assets of 79 trillion, to alternative assets. It is aiming to grow this to 9.8% of total assets (¥6.9trillion) by March 2021. In 2014 GPIF also announced its aim to increase alternatives like PE to 5% and is currently in this process.
The Committee recommends that Taiwan similarly adopt international best practice through prudent increased investment in alternative assets.
Suggestion 3: Expand the number of products in which family offices can invest in order to further attract single- and multi-family offices to invest in Taiwan.
The Committee appreciates the interest that Taiwan’s regulatory authorities have shown in developing the increasingly significant source of global investment represented by family offices, either in Single Family Office (SFO) or Multi-family Office (MFO) formats. Over 10,000 such offices are operating around the world, with nearly US$6 trillion in assets under management. To help attract such funds and develop this industry in Taiwan and help it better compete with other regional financial centers such family offices currently focus on, including Singapore and Hong Kong, the Committee looks forward to working with Taiwan’s regulators to make available a wider selection of wealth management products.
To help encourage family offices to invest and establish regional offices or headquarters in Taiwan, the Committee suggests expanding the types of wealth management and related services available for these types of investment institutions, including wealth planning, trust and corporate services, tax planning, family governance, and charities and philanthropy. Also, the Committee suggests removing restrictions on some types of investment products, such as eliminating the 30% limit of total net-remitted-in capital on exchange-listed convertible bonds for foreign institutional investors, while expanding the number of ESG investment funds and products available, as these are the subject of increasing interest by international investors and family offices.
We further recommend that establishment of an SFO be considered as part of the qualification for personal residency in Taiwan, similar to Singapore’s “Global Investor Program.” Incentive schemes for funds managed by SFOs could include income-tax exemption for most investment gains, similar to what is available in other financial centers in Asia, and Taiwan’s Double Taxation Agreements with other countries could also be leveraged to attract such investment.
The result will be a more diversified pool of investment for Taiwan, further development of Taiwan as a regional wealth management center in order to attract family office funds, and cultivation of the family office industry in Taiwan to benefit both foreign and local family office-type investment institutions.
本委員會感謝政府致力於參與產業利害關係人之溝通對話,並著手於近來的改革以除去在台灣投資的障礙。尤其是透過2018年修正之《公司法》及擬於2020年修正之《企業併購法》與產業持續溝通及澄清,這些改革為管理階層、股東和其他利害關係人創造了友好的商業和投資環境。
去年本委員會已就私有化交易及下市等主要議題,建議提供更清楚的規範。私募基金委員會瞭解《企業併購法》修正案雖尚未大幅釐清下市門檻與揭露的問題,但已在一定程度上回應了我們的意見。我們相信將來在修正案的施行規定上,會提供更清楚的揭露規定。
私募股權投資在過去對台灣經濟深具貢獻。例如,在2001年和2008年的第一次和第二次金融改革中,私募股權基金藉由收購不良貸款、對各金融機構進行重要的投資,以及協助台灣金融產業改善營運績效,幫助穩定了當時的情況。
對於私募股權基金來說,透明度從來就不是一個問題。上述交易不僅成功地為市場頂尖的產業引進新的技術、資源及概念,亦為台灣產品和服務提供了參與全球市場的機會。鑑於近來新冠病毒疫情爆發導致市場的動盪,此刻是與私募股權投資者合作,利用其全球資源協助任何振興計劃的絕佳時機。我們很榮幸能與台灣行政機構合作,為外國投資者(包括私募股權基金)提供一個公平開放的投資市場。
新冠病毒疫情預計將會持續影響全球經濟,並重塑我們的生活方式,但私募基金委員會相信,這亦將是產業界尋找新商機並學習如何迎接挑戰的難得機會。我們注意到國際私募股權基金所帶來的諸多優勢,包括先進的工業技術、營運策略、財務紀律、人力資源、管理技術、新的行銷觀念、ESG(環境,社會和治理)等等。藉由此種方式,私募股權可為台灣政府擬優先發展的產業提供重大貢獻,尤其是台灣政府在未來將持續關注的「五加二」創新產業。
延續去年正向發展的趨勢,私募基金委員會謹提出下列建議:
建議一:進一步釐清可能成為阻礙私募基金投資的重要議題
1.1 我們瞭解外界對私募股權基金投資於台灣銀行業、保險公司及其他金融服務業有所疑慮,以及對透過基金結構規避中資投資限制的擔憂。私募基金委員會期待與政府積極合作,制定指導方針以解決這些疑慮,以設定明確且平衡的標準,並促成適宜的私募股權投資。
1.2 私募基金委員會期待近期《企業併購法》修正案可以在保護少數股東和鼓勵併購活動間取得平衡。經濟部提出的修正案強調對小股東權益的保護,例如允許在股東會投票反對併購的少數股東亦得行使異議股份收買請求權、持股百分之十以上之股東須在股東會之前說明併購案之自身利害關係以及表決權意向(無論是否有利益衝突),並將下市門檻從股份總數的三分之二提高至四分之三。私募基金委員會希望對併購活動提供更友善的法律監管架構,以便在落實企業併購法第1條鼓勵併購之立法意旨方面,也可以得到相同的關注。更重要的是,無論是在程序、獎勵措施還是稅賦方面,外國投資人都應得到平等及公平的對待。
1.3 私募基金委員會瞭解台灣政府推出「五加二」產業創新計畫,作為未來數十年的重點產業藍圖。我們歡迎更友善的投資監理架構,讓更多的外國私募股權基金(特別是大型的國際私募股權基金)的資源和資金可以參與該計劃。
1.4 私募基金委員會建議台灣能建立專責小組,以提供有效的溝通管道。透過這個管道,私募股權基金與本委員會得分享其全球經驗,並協助形塑台灣資本和投資市場的治理層級。
建議二:探討公共退休基金審慎投資私募股權等另類資產(alternative assets)之方式,以協助達成其目標
台灣正面臨極高的公共退休金債務,審計部預測在未來30年,公共退休金支出將產生約新台幣18兆元(相當於6,000億美元)的或有負債。有幾種方法可以因應此一挑戰。台灣可以縮減公共退休金福利,儘管這種情況並不總是受歡迎,,但台灣已在某些情況下進行縮減了。另一種選擇是增加勞工退休金的提撥,以縮小退休基金收支間的差距,但是此方式將增加勞工負擔。最後,退休基金可以通過增加其投資回報率之方式以達成其目標,如此將減輕政府和退休基金採取不受歡迎方式(減少福利或增加提撥退休金)的壓力。
在一些已開發的全球市場(例如:美國與加拿大),實務上已有公共退休基金投資於私募股權等另類資產(例如:)的做法;而在亞洲市場(例如:新加坡、韓國及日本等),這種趨勢亦日益增加。這些另類投資標的通常由私募股權、對沖基金、房地產及基礎設施混合組成。台灣的公共退休基金對另類資產的投資仍屬有限。相比之下,美國的大型退休基金平台,如加州公務員退休基金(CalPERS)和德州教師退休基金(Texas Teachers),對私募股權和其他另類資產的投資配置分別達到20%和32%,而加拿大退休金計劃(Canada Pension Plan) 則提升到42%。在亞洲,較成熟的主權基金及退休金基金也已增加此類投資配置。
截至2017年年底為止,新加坡政府投資公司(GIC)的另類資產投資配置為21%。韓國政府投資公司(KIC)於2016年的另類資產投資配置為16%,且於2019年9月的一份報告中宣布計劃於2020年將其提高到20%。韓國國民退休金局(National Pension Service of Korea)目前的另類資產投資配置為11%。根據2018年的一份報告顯示,韓國保健福利部(Korea’s Ministry of Health and Welfare)宣布有意在2023年底前,將其對私募股權和另類資產的投資配置增加到15%左右,屆時其管理的資產預計將超過1,000兆韓元(相當於9,310億美元)。
其他亞洲大型基金,包括日本郵政銀行(Japan Post Bank)和日本政府退休金投資基金(GPIF),現正將資金配置至私募股權等另類投資。日本郵政銀行在2018年3月的報告稱,已將約1.6兆日元(約佔其總資產79兆的2%)配置到另類資產,並預計到2021年3月止,將提高至總資產的9.8%(6.9兆日元)。GPIF已於2014年宣布計畫將私募股權等另類資產的投資部位提高到5%,且正在進行中。
私募基金委員會建議台灣採取類似國際最佳實務的做法,審慎增加另類資產投資。
建議三:增加家族辦公室可投資的產品數量,進一步吸引單一家族辦公室和聯合家族辦公室赴台投資
私募基金委員會感謝台灣主管機關對家族辦公室(不論是單一家族辦公室或聯合家族辦公室) 逐漸成為全球投資市場重要來源的發展感到興趣。超過10,000個家族辦公室在世界各地運作,管理著近6兆美元的資產。為吸引這類資金並鼓勵台灣家族辦公室產業的發展,且為協助台灣與香港和新加坡等家族辦公室高度關注的區域金融中心(競爭,本委員會期待與台灣主管機關合作,提供更廣泛的財富管理產品。
為鼓勵家族辦公室在台灣投資並設立區域辦事處或總部,私募基金委員會建議增加此類投資機構所能適用的財富管理與相關服務模式,包括資產規劃、信託及公司服務、稅務規劃、家族治理與慈善事業。此外,本委員會建議取消對某些投資產品的限制,例如取消外國機構投資人對上市可轉換債券淨匯入資金總額30%限制,同時增加ESG(環境、社會和治理)投資基金和產品的數量,因為其已成為國際投資者和家族辦公室日益感興趣的標的。
我們亦建議參考新加坡的「全球投資者計劃」,將設立單一家族辦公室作為取得台灣個人居住資格的條件之一。單一家族辦公室所管理基金的獎勵方案可包含對其大部分投資收益免徵所得稅,此與亞洲其他金融中心所提供之租稅優惠類似,台灣亦可以利用與其他國家間的雙重課稅協定來吸引此類投資。
上述開放的結果將使台灣的投資來源更加多樣化,進一步發展台灣成為區域財富管理中心以吸引家族辦公室資金,並扶植台灣的家族辦公室相關產業,嘉惠外國和本地家族辦公室類型之投資機構。
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台美科技產業合作的最佳基地-桃園
SDG Luncheon with Taoyuan City Mayor Cheng Wen-tsan
The Future Enterprise: Digitalization, Dematerialization, Sustainability, Global Workforce
與台北市長柯文哲午餐會
Meet the Mayor: Luncheon with Taipei City Mayor
AmCham Taiwan
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