Recent years, Taiwan enterprises have set up the flows of labor and material in Mainland China; however, the 40% investment limitation to China makes Taiwan enterprises hesitate to go public in Taiwan, moreover, the capital flow makes Hong Kong stock market extraordinary blooming. The stock market of Taiwan becomes edged.
Nevertheless, China-based enterprises have established interest-controlled corporation in Cayman or Bermuda Islands, easier for them to be listed abroad. Because there is no well regulations to “where you operate?” or “why you raise the money?” Hong Kong turns into a good choice for Taiwan enterprises going public.
The main purpose of this study is to analyze the model of going public in Hong Kong, based on legislation and taxation. The result showed two parts: first of them, the Taiwan enterprises, which have been listed in Taiwan, can separate the oversea division of Investment and make it dependently go public in Hong Kong; therefore, it is not necessary to be reviewed by Investment Commission (MOEA) of Taiwan; and relieve the risk of investment in Mainland China by centralizing the capital. Second, the Taiwan enterprises, which have not been listed in Taiwan, are adaptable for establishing directly the interest-controlled corporation abroad, due to the advantage of high privacy and avoidance of Taiwan limitation to Mainland China. Enterprise or individual may apply tax saving, finance adjusting, etc. by the abroad interest-controlled corporation; that is the reason why this model is applied for most of the small companies and individuals in Taiwan. Both of the models are popular for Taiwan enterprises, with least restrictions.