Taipei, July 10, 2012 (CENS)--In order to offer more financial services to Taiwanese enterprises, Chinese banks here hope that Taiwan's authority can allow them to set up offshore banking units (OBUs) as OBUs can enjoy tax incentives and flexibly offer financial services.
Insiders said that OBUs of Taiwanese banks have been favored by overseas Taiwanese enterprises, particularly those in mainland China, for fund management. If Chinese banks in Taiwan are allowed to operate OBU businesses, they are believed to become more competitive than their Taiwanese counterparts in striving for patronage from Taiwanese enterprises with operations in China.
Taiwan's Financial Supervisory Commission (FSC) approved on June 7 the applications filed by two Chinese banks—Bank of China and Bank of Communications—for setting up branches here, with the former already inaugurated on June 22 and the latter to open on July 16. The two banks have reportedly expressed strong intention to handle OBU businesses and hope the financial authority here can allow them to set up OBUs.
However, the existing cross-strait financial regulations stipulate that each Chinese bank can only establish one branch in Taiwan and can not operate OBU as OBU is regarded as a financial unit. But FSC said that it would take the request into consideration and might bring the issue to the negotiation table of the following talks of ECFA (economic cooperation framework agreement).
(by Judy Li)