Taiwan firms to be allowed to land in Fujian
6/12/09 Source: Legalbusinessonline.com
For two decades, Fujian has flourished on investment coming from Taiwan. And for the first time in history, the wealthy southern province will play host to branch offices of Taiwan law firms.
In the mainland’s latest move to promote cross-Strait investment and cooperation, new measures has been announced to allow Taiwan law firms to establish branch offices in Fuzhou and Xiamen, two major cities in Fujian province. Leading Taiwan firms are enthusiastic about this new opportunity to expand their reach to the vast mainland market.
“The cross-Strait economic ties have been strengthened significantly in the past 12 months, and law firms on both sides of the Strait are set to benefit,” said CT Chang, a partner of leading Taiwan firm Lee and Li. “This new development marks the beginning of a new era for the Taiwan legal market.”
The prospects of mainland investment into Taiwan are widely regarded as a growth centre for Taiwan firms in the coming years. “We expect an important part of our revenue growth in the next a few years to be driven by mainland companies investing in Taiwan,” said Chang.
In addition, the traditional restrictions on Taiwan companies investing in the mainland have been gradually lifted over the past few months, and will be overhauled once the cross-Strait “Comprehensive Economic Cooperation Agreement” is signed. Taiwan firms, which have worked with many clients investing in the mainland for the past few decades, will be sought-out by these clients to advise on a growing number of new investment, joint venture and other business ventures.
According to Chang, Lee and Li’s partners are very interested in the possibility of having a branch office in the mainland, but the decision on whether to take the plunge still depends on details yet to be issued, such as regulatory requirements and the scope of business of the branch office allowed in the mainland.
Although Taiwan law firms were banned from opening branch offices in the mainland in the past, a number of Taiwan firms have already tapped into the mainland market, mostly by setting up alliance consultancy firms that provide business consulting services. Lee and Li, for example, have alliance consulting businesses in Shanghai and Beijing. Pamir Law Group and Lee, Tsai & Partners are two other Taiwan firms with a similar business model in the mainland.
“If the mainland branch offices of Taiwan law firms are allowed to advise on Taiwan law and provide legal services, the new initiative will be very attractive to Taiwan firms,” said Chang.
While some uncertainty over the future of Taiwan firms operating in Fujian reminds, the amount of Taiwan-related legal work in Fujian, currently handled by Fujian firms, is surely increasing. The latest statistics by the Bureau of Justice of Fujian province revealed that in the first five months of 2009, Fujian firms have advised on over 800 litigation cases, around 330 arbitration proceedings, and more than 610 non-contentious matters, all of which involved Taiwan elements.
