Kent Chong is a managing director of PwC Legal in Taiwan. He is a Registered Foreign Lawyer in Taiwan and the 1st foreign lawyer joining the Taiwan partnership. Kent specialises in cross-border corporate and mergers & acquisition transactions and is the lead legal contact for the firm’s South East Asia & India Practice. In this interview with Asia Law Portal, Kent explains the multi-disciplinary strength of his practice, the history of PwC Legal and some key issues and considerations for clients when considering investments in Taiwan or abroad.
You specialize in cross-border corporate and mergers & acquisition transactions and are the lead legal contact for South East Asia & India Practice in PwC. Tell us more about your practice.
The strength of my practice lies in the multidisciplinary nature of our team, which with our selected mix of international and local-market proficient lawyers, offers legal and commercial solutions across different jurisdictions under one roof. We have local lawyers with extensive cross-border transaction experience and exposure through which they become valued vessels for new players entering the Taiwanese market, and foreign-trained lawyers with local know-how and language skills making them adept at assisting local clients with outbound endeavors. Further, we have legal advisors who are accountants, tax specialists, financial analysts or come from engineering, pharmaceutical and other commercial backgrounds. Together, our team is tailored for providing a multitude of professional services which can be characterized as a global legal service provider and one-stop-shops for client needs.
What prime considerations should clients keep in mind when considering foreign investments, mergers and acquisitions or corporate restructurings?
The knowledge of local law is always essential prior to making any plan for inbound investments or transactions in Taiwan. Due to the complicated political relationships between Taiwan and China and changing government policies surrounding the U.S. and European countries, foreign investments in Taiwan as a whole have attracted more scrutiny from regulatory bodies with requirements having become more stringent and enforcement more vigorous. Therefore a foreign investor is recommended to seek expert guidance on these issues early in the transaction process.
In terms of corporate restructuring, it is critically important to include both tax and legal advisors in the discussion process as both tax and legal perspectives most often go hand-in-hand when considering the most cost-effective and risk-averse models for enterprises seeking a remodel or restructure of some sort. In addition, taking into account Taiwan’s civil jurisdiction, the legal duties and standards of care expected of individuals or companies serving as company directors or representatives also contrast in various ways with those in common law jurisdictions.
In light of the above, foreign investors seeking to enter the Taiwanese market for any strategic or investment objectives are most encouraged to involve experts throughout their discussion process.
What is PwC’s history in legal services in Taiwan and what are its future plans for Taiwan?
Following its establishment in 2000, PwC Legal in Taiwan formed an alliance with PricewaterhouseCoopers Taiwan and has since worked alongside financial and accounting specialists in the areas of accounting, tax, corporate finance, company start-up and human resource management to provide our clients with a full range of legal services that are distinctive from what the traditional legal markets can offer.
We have practical and extensive experience in the areas of M&A and investments transaction services. We advise on all aspects of M&As and investment issues, and consistently handle complex and high-volume transactions. In recent years, PwC Legal has assisted clients on their acquisitions and investments in the United States, Japan, Mainland China, European countries and Southeast Asian countries. PwC Legal has represented both listed and private corporations in merger transactions and has been advising large international corporations on matters of corporate restructuring.
Building on our strong presence in the M&A scene, we plan to continue to leverage our cross-disciplinary expertise to strengthen our brand name in cross-border M&A activities. With the growing globalization of enterprises which has fueled the volume and size of these cross-border transactions, we expect even more opportunities to work with other correspondent law firms around the world to assist our domestic clients with setting up their businesses, especially in United States, European Countries, Southeast Asian countries and many other countries in connection with their investments, M&As, and business projects.
What key issues should corporate clients be thinking about for Taiwan and the greater APAC region for the foreseeable future?
Firstly, for corporate clients with potential connections or venture ideas in the Southeast Asia, demand and new opportunities in this market are optimistically expected over the coming term. Since Taiwan launched its “Guidelines for the New Southbound Policy,” we have seen an increase in trade with member countries, with financial institutions also having an increased exposure to the Southeast Asian region. The pandemic-affected era may therefore offer enterprises many well-priced acquisitions and plus readily available financing support.
Secondly, Taiwan is undergoing a wave of economic boom as a result of the emergence of electric automotive industry and development of artificial intelligence and internet of Things, owing to the island’s very own well-established supply chain in electronic components and subsystems. As a result, factory expansions and new job opportunities, as well as huge inbound capital injections, are much anticipated in connection with the island’s supply chain industry which had previously contributed to the success of Acer and Asus. Along with government incentives aimed at transforming the island into a high-tech hub, we expect to see favorably new corporate presence and the attraction and increased availability of expatriate professionals now and in the very near future.
Thirdly, with APAC’s vast internet population, companies in the region are on an exponential curve to digitalize their businesses. Companies big and small are launching e-commerce business platforms, investing in digital initiatives such as third-party payment platforms (Line Pay, Alipay and many others) and committing to a digital-first approach to reap big economic rewards. To connect with the by-and-large digital-savvy consumers, enterprises will necessarily need to shift from the traditional mindsets of mass production and wealth creation and move their priorities to digitalization to keep up with the change.
According to the analysis made in the “2020 E-Commerce Whitepaper” published by Facebook and Shopline, Taiwanese business are strategically positioned for launching e-commerce in the Southeast Asia due to geographical advantages and similarity in culture, language and festivities leading to comparable shopping patterns. We expect to see a growth of Taiwanese brands going overseas through e-commerce platforms especially in the neighboring Asian region.
The above sums up some unique business opportunities for Taiwanese businesses going abroad and for foreign investors launching their presence in Taiwan and issues likely to be of relevance and impact to corporate clients in the APAC region.