Taiwan to further open financial services industry

TAIPEI (AFP): Taiwan will relax limits on foreign investment in the banking and financial services sector to meet requirements under the General Agreement on Tariffs and Trade (GATT), Finance Ministry officials said yesterday.

The ministry has mapped out an "initial commitment" list under the framework of the GATT's general agreement on trade in services, granting easier access for foreigners to join the local banking, insurance and securities industries, the officials said.

The list is in line with liberalization required by the GATT, the world trade body which Taiwan is seeking to join, and expected to attract more overseas capital and help achieve its aim of developing the country as a regional financial hub, they said.

The initiative, which is yet to be endorsed by the cabinet- level Council for Economic Planning and Development, foreigners would be given the same treatment as domestic investors, they noted.

Foreigners will be allowed to apply for banking licenses, join U.S. counterparts in the insurance industry and hold more shares of securities brokers, they added.

To avoid manipulation, individual foreign investors are limited to a maximum five percent equity in a new bank, while institutions are limited to 15 percent.

At present, total foreign investment in a local insurance firm and securities brokerage cannot exceed 40 percent and 49 percent respectively.

U.S. firms were allowed to enter the local insurance market in 1986.