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(Nov 02, 2007) On July 4, 2007, the 13-article Statute for Development of Biotechnology and New Pharmaceutical Enterprises was promulgated in Taiwan, to provide incentives to companies in that sector. According to Academia Sinica President Wong Chi-huey, the legislation is "important and timely" and represents "a new foundation that would rapidly boost the industry" instead of "repeatedly amending existing regulations." (Annie Huang, Legislature Passes Biotech Act, 24:43 TAIWAN JOURNAL (Nov. 2, 2007), available at http://taiwanjournal.nat.gov.tw/ct.asp?xItem=24389&CtNode=122 [the original article is dated June 29, 2007].)
A key change brought about by the Statute is that it eases restrictions on holding concurrent posts imposed on publicly funded research scientists, including those in institutions like the prestigious Academia Sinica, by article 13 of the Government Employees Service Law. Thus, with the permission of the original employer, certain researchers in those institutions may now be a founder or director of, or technical consultant to, a start-up biotech or new pharmaceutical company and also hold ten percent or more of the stock equity when the company is created (art. 10). Academic and research organization R&D personnel also may, with the employer's permission, act as consultants or advisors to biotech and new pharmaceutical companies (art. 11). (Statute for Developing Biotechnological New Pharmaceuticals Enterprises, 6157 GAZETTE OF THE OFFICE OF THE PRESIDENT (July 4, 2007), Global Legal Information Network, GLIN ID No. 194345, available at http://content.glin.gov/summary/194345; Investment Tax Offsets Offered Biotech and New Pharmaceutical Companies, Taipei Economic and Cultural Office (Australia) Web site, http://www.teco.org.au/eecon.htm (last visited Nov. 5, 2007); Huang, supra.)
In addition, the Statute permits biotech and new pharmaceutical companies to offset up to 35% of their expenses for personnel training and R&D against enterprise income tax over a period of five years. It also allows 20% of investment in those company shares to be offset against the tax as long as the shares are held for at least three years. These tax incentives will be available to the end of 2021 (art. 6). The Statute provides for tax incentives to high-level professionals and technology investors to participate in company operations and R&D (art. 7). It also permits biotech and new pharmaceutical companies to issue stock warrants and sell them under par to their high-level professionals and technology investors; taxes on them are levied on the basis of their actual value at the time of transfer (art. 8, paras. 1&2, with reference to art. 140 of the Company Law). (Id.)
According to the ASIAN MEDICAL NEWSLETTER, the Ministry of Economic Affairs recently drafted provisions to supplement the new Statute in regard to the threshold for tax relief. They stipulate that the tax relief "applies to companies developing new biotech drugs or high-risk medical devices" but "they will need to spend at least 5% of total turnover or 10% of investment capital on new drug or device development to qualify." (Taiwan's Biotech and New Pharmaceutical Development Act, 7:10 ASIAN MEDICAL NEWSLETTER (Oct. 5, 2007), available at http://www.pacificbridgemedical.com/newsletter/newsletter_v7n10.htm.)
|Author:||Wendy Zeldin More by this author|
|Topic:||Corporations More on this topic|
|Jurisdiction:||Taiwan More about this jurisdiction|
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Last updated: 11/02/2007