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(Feb 18, 2009) On February 9, 2009, in a move aimed at combating rising unemployment, Taiwan's Ministry of Economic Affairs (MOEA) launched the New Store Major Subsidy Plan for persons seeking to establish their own franchise or chain store business. Under the subsidy program, a start-up fund of NT$50,000 (US$1,472) will be granted to successful applicants. The program, whose total budget is NT$25 million in the first phase (thus, 500 stores would be able to benefit from it) will run until April 8, 2009. Phases 2 and 3 of the plan, aimed at helping independent retail investors, will reportedly be rolled out in April. At that time, the MOEA plans to unveil a new subsidy program to assist persons seeking to establish their own stores, rather than franchises. (Elizabeth Tchii, New Store Subsidy Plan Begins, TAIPEI TIMES, Feb. 10, 2009, at 12, available at http://www.taipeitimes.com/News/biz/archives/2009/02/10/2003435767; Details of Franchisee Subsidies Finalized, THE CHINA POST, Feb. 10, 2009, available at http://www.chinapost.com.tw/taiwan/t-business/2009/02/10/195422/Details-of.htm.)

The MOEA's Commerce Department is in charge of the application process and has issued guidelines for giving assistance in accordance with an innovation plan for launching chain and franchise stores. To qualify for the subsidy, applicants must channel their applications through the headquarters of the franchise they will join and must have completed company registration for the business. The headquarters will work out an innovation plan with the applicant, who is required to show proof of "new brands, new service products, new marketing modes, new operating modes, and new commercial application technology." (THE CHINA POST, supra.) If approved for the franchise, the successful applicant may deduct the NT$50,000 subsidy from the franchise fee payable to the headquarters joined. If the ten-applicant limit has been used up by a given franchise brand, a would-be applicant will have to seek another franchise brand. (Id.)

The ultimate aim of the subsidy program is the creation of 4,000 stores and 20,000 to 30,000 jobs over the next two years. Critics contend, however, that the subsidy falls far short of the high amount of capital investment required by many retail franchise businesses and, they point out, "a sharp increase in franchise store openings would no doubt exacerbate competition and put existing stores out of business, creating another round of unemployed workers." (Tchii, supra; Press Release, MOEA Department of Commerce, Year 2009 Assisting the Services Industry Research and Development Guidance Plan – "Innovation Plan for Chain and Franchise Store Launches" Subsidy Applications Will Begin to Be Accepted on February 9, 2009 (Feb. 9, 2009) [in Chinese], available at http://w2kdmz1.moea.gov.tw/user/news/detail-1.asp?kind=1&id=16582; see also Financial Stimulus Package, GLOBAL LEGAL MONITOR (Dec. 12, 2008), available at http://www.loc.gov/lawweb/servlet/lloc_news?disp3_828_text.)

Author: Wendy Zeldin More by this author
Topic: Commerce More on this topic
Jurisdiction: Taiwan More about this jurisdiction

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Last updated: 02/18/2009