It has always been very difficult for mainland Chinese companies to be listed in Taiwan to raise funding, since there are many touch legal issues to be solved. Jingtian & Gongcheng has achieved another success in this area. As the China legal counsel of the issuer, it helps Patc Precision Industry Co., Ltd. to be listed on Taiwan Stock Exchange. The company listed its shares on June 3, 2015.
As far as the examination policy by Taiwan Stock Exchange is concerned, it’s practically very difficult for a company controlled by a mainland Chinese citizen to apply for listing there. According to relevant rules in Taiwan, if Chinese citizens hold more than 30% equity in a potential public company, it has to undergo a special approval process with fundamental obstacles. Therefore, mainland Chinese companies with an intention to be listed in Taiwan right now will basically be structured as the operational subsidiary company directly or indirectly hold by the potential listing company, which is an offshore entity controlled by non-mainland Chinese citizens.
Since the mainland Chinese companies are normally very important subsidiaries in these arrangements, China legal counsels play a very important role in these projects. Besides conducting due diligence, providing legal opinions to listing according to Taiwan Stock Exchange, they also need to help companies to solve important problems discovered during listing, to answer a series of special questions by the Exchange concerning the important mainland Chinese subsidiaries and its important assets, so as to push forward and facilitate the listing process.
Mr. Li Zhuoru is the partner of Jingtian & Gongcheng for the Patec Precision listing project. He is a certified lawyer in Taiwan, New York State of USA and mainland China, and has over a decade of experience in top law firms in Taiwan, Hong Kong and Shanghai. Mr. Li has been involved in the overseas listing and debt issuance by dozens of companies from Taiwan, Hong Kong and mainland China, as well as acting as China and international legal counsel in a number of cross-border M&A deals by domestic companies in China.
