Key Initial Planning Considerations
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Key Initial Planning Considerations
Generally speaking, assuming a straightforward process how long does it take to pay a dividend?

A reasonable time period for paying a dividend is within one month after completion of relevant board and shareholders approvals.

Any timing restrictions on paying dividends?

Yes.

The dividends should be paid in the same fiscal year of the AGM which resolved the payment of the dividends.

In addition, if provided for in the Articles of Incorporation, a company can distribute quarterly or semi-year dividends by board resolution.

What accounts will be required to support payment of dividend and will these need to be audited?

The annual financial statements at the end of each fiscal year are required. Interim accounts are not acceptable unless provided in the Articles of Incorporation.

Are there restrictions on the amount of dividends that can be paid?

Yes, there are restrictions on the amount of dividends that can be paid.

Normally, only the retained earnings indicated in the Balance Sheet can be used for dividend distribution.

Are there any ways to increase reserves, and if so, how long do these generally take?

Yes, it is possible to increase reserves by issue new shares at premium or if receives gifts.

Are foreign investment or other regulatory approvals required on payment of a dividend?

No regulatory approvals are required in connection with payment of a dividend.

Are there any foreign exchange requirements on paying dividends to foreign parent companies?

Yes. The dividends must have been approved by the board and the shareholders pursuant to relevant accounting and Company Law requirements.

Can cash be borrowed to settle a dividend?

No, there are no restrictions from a corporate law perspective on borrowing cash to settle a dividend as long as the dividends have been approved by the board and the shareholders pursuant to relevant accounting and Company Law requirements.

Are dividends in kind possible?

Only cash dividend and stock dividend are permissible.

Are there any other general considerations with a significant timing impact on payment of dividends?

No.

Are there any restrictions on lending funds intra-group but cross border?

Yes, there are restrictions from a corporate law perspective on lending funds intra-group but cross-border. Under Taiwan Company Law, a Taiwan company can only lend its fund to a company with business relations or if the lending is for short term needs.