India Creates New Authority to speed up the Dissolution of Companies

On March 17, 2023, the Indian Ministry of Corporate Affairs announced that a new central authority (“Centre for Processing Accelerated Corporate Exit”) is to process applications for the removal of a company’s name because of lack of business or operations. The Indian Government expects the new authority to substantially speed up the process. So far, this took up a lot of time, hence some investors hesitate creating an Indian company in the first place. This is to change for the better.

Under Indian law, there are four different ways of terminating a company. The recent change concerns one of them, namely, the removal of the company name after a longer period without business or operations.

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Your contact person in India: Dr. Jörg Schendel

Suman Khaitan & Co.

W-13, West Wing, Greater Kailash Part-II
Delhi 110048, Indien

www.sumankhaitanco.in
germandesk@sumankhaitanco.in
schendel@adwa-law.com

Reporting obligations concerning the disqualification of directors extended

Just as in Germany individuals may be barred from being appointed managing director of a limited liability company („GmbH“) or member of the management board of a joint stock corporation („AG“), similar rules apply to the position of the director of a company in India. Now the obligation to report such disqualification, first to the company and then the company to the company registrar, has been extended [„Companies (Appointment and Qualification of Directors) (Amendment) Rules, 2023“].

So far, only a very few issues had to be reported, that is, if a company in which the individual was or is a director had failed to fulfill certain obligations, esp. filing the annual accounts.

Now the reporting obligations extend to instances of personal disqualification, such as being declared of „unsound mind“, being insolvent, or having been sentenced under certain criminal laws. This makes perfect sense and should be observed.

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Your point of contact in India: Dr. Jörg Schendel

Suman Khaitan & Co.

W-13, West Wing, Greater Kailash Part-II
Delhi 110048, Indien

www.sumankhaitanco.in
germandesk@sumankhaitanco.in
schendel@adwa-law.com

The same procedure as every year?

Even if taxes seem inevitable and the tax month does not change in most jurisdictions - in Taiwan it is not the merry month, but the tax month of May - the same question often arises every time: do I have to pay tax on my income in Taiwan at all, and if so, what options for a reduction does Taiwanese tax law allow?

The points of the tax declaration obligation, a possible tax reduction and the payment are to be discussed in the following briefly based on the earned income of a person who does not have a passport/identity card of the Republic of China (Taiwan) or comes from China.

Mr. X comes from Germany and is to work in Taiwan for two years. He would like to know if and when he has to declare taxes in Taiwan.

Tax declaration obligation

Wage tax is generally incurred when employment services are rendered. If a foreign person is employed by a company registered in Taiwan and thus included on the payroll, the company must withhold a withholding tax (in Germany it is the wage tax) from the salary each month, even if the money is paid outside Taiwan. For stays of up to 183 days in Taiwan, a tax of 18 % must generally be withheld and paid to the tax office. If the person stays longer than 182 days in Taiwan within a calendar year, the withholding tax for tax residents applies, which starts at 5 %.

If the person is employed by a company outside Taiwan, no monthly withholding tax is required to be paid, but the person must report taxes in Taiwan no later than the next annual income tax return if he or she has stayed in Taiwan for at least 90 days in a calendar year. The total tax period is taxed (tax days are the period from the first complete day after entry to the complete day of departure). If the person has been in Taiwan for less than 90 tax days in a calendar year, he/she does not have to file a return. Withholding tax amounts that have been withheld will not be paid out.

Tax reduction

If the crediting period is 90 to 183 days, the accrued income is taxed at 18 % without the possibility of tax reduction.

In case of a credit period of 183 days and more, the person is considered a tax resident with a progressive increase of the tax rate from 5 % up to 40 %. Tax reduction through deductions/exemptions is possible, such as for financially dependent family members. Further reductions may be possible depending on the individual case.

Duty to pay

It should be noted that in Taiwan, not only is the tax to be declared in the tax month, but outstanding tax amounts must also be paid by May 31 if interest on arrears is to be avoided. It is not possible to make a remittance from abroad directly to the tax office. The amount must be paid to the tax office at a bank in Taiwan. The tax office can claim the tax up to years after the tax accrual with additional costs.

For our example case, if Mr. X is employed by a company registered in Taiwan, a monthly payroll tax will be paid. Mr. X must file an annual tax return in Taiwan no later than May of the following year if he has spent at least 90 taxable days in Taiwan in the calendar year. Payment of the tax due must also be made no later than May of the following year.

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Your point of contact in Taiwan: Michael Werner

Eiger Law

Bldg. A, 2F, 25-2 Ren Ai Rd, Sec. 4
Taipei 10685
Taiwan

CELL      +886 9 8726 1326
TEL        +886 2 2771 0086
FAX       +886 2 2771 0186

www.eiger.law
info@eiger. law

Regulation on Giving/Receiving Gifts to/by State Officials

A newly issued regulation named Giving or Receiving Gifts of State Officials B.E. 2565 (2022) effective 13 January 2023 (“Regulation”), prescribes the following prohibitions i.e:

• State officials’ family members are prohibited from receiving gifts from people who are dealing with the officials’ respective agencies and

• state officials are prohibited from giving gifts to their supervisors and their supervisors’ family members.

However, there is an exception to the prohibitions that i.e. gifts on limited customary occasions valued at THB 3,000 or less are allowed. In addition, definitions of some terms were also revised under this Regulation e.g. the term “gift” includes training or seminars. And for the term “family members”, this now includes spouses living together as husband and wife regardless of being legally married.

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Your point of contact in Thailand: Dr. Andreas Respondek

Respondek & Fan Ltd

United Center, 39th Floor, Suite 3904 B
323 Silom Road
Bangkok 10500, Thailand

CELL     +66 89 896 4048
TEL       +66 2 635 5498
FAX       +66 2 635 5499

www.rflegal.com
respondek@rflegal.com

Philippines promotes access to low-interest credit with new law by improving security for private assets

The Philippines has enacted a new law to improve the security of private property. It makes it possible to conclude a security agreement on movable property and have it registered in a public registry. This is intended to facilitate access to low-cost loans, especially for micro, small and medium-sized enterprises. The law does not apply to aircraft and ships.

The security interest shall not expire until all obligations have been fulfilled and there are no outstanding obligations. The security agreement must be in writing and signed by both parties. It must name the collateral and the obligations. The security interest can encompass potential future possessions or assets acquired later, as long as they can be readily identifiable.

A security interest can be perfected in intangible property by the secured creditor's possession and control over fixed assets and deposit accounts. In the case of tangible property, the lien becomes effective by registration in the relevant section of the land registry.

In the event of enforcement, previously re-registered security interests and liens may take precedence over subsequently registered rights depending on the registration time. The secured creditor may enforce his security by judicial or extrajudicial proceedings.

If the collateral is not with the secured creditor, he can take possession of it without court proceedings in case of default. If this is not possible, he may apply to the court for a hearing to obtain possession of the collateral.

The law is intended to help boost economic activity in the Philippines by providing better credit conditions for businesses.

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Your point of contact in the Philippines: Lutz Kaiser

Villanueva Gabionza & Dy Law Offices

20th/F Corporate Center
139 Valero St., Salcedo Village
Makati City 1227, Philippines

CELL      +63 995 985 4957
TEL        +63 2 8813 3351
FAX       +63 2 8816 6741

www.vgdlaw.ph
manila@adwa-law.com

The gold seal of Emperor Minh Mạng returns to Vietnam: Significance of seals in Vietnam and their use in business transactions

The gold seal of the Emperor Minh Mạng of the Nguyễn Dynasty has returned to Vietnam. As recently announced, a private collector situated in the Province of Bac Ninh has acquired the seal for 6.1 million euros and enabled the “repatriation” of - according to the Department of Cultural Heritage - the largest, most beautiful, and most valuable seal of the Nguyễn Dynasty under the auspices of the Vietnamese government.

The planned auctioning of the seal in France had received a wide coverage in Vietnamese media and, in addition to the general discussion about the special protection of such cultural goods, reveals the great importance of seals in Vietnamese culture.

The Nguyễn Dynasty had, during its reign of 143 years (1802-1945), produced more than 100 imperials seals made of various materials which were supposed to be used to ensure, amongst others, “security in business transactions”.

In Vietnam, a company stamp, or an official company seal is used as a tool to certify the issuer of a document. For a legal entity it is thus of importance to use the seal/stamp in combination with the signature of a legal representative and/or an authorized person. A signature without a seal/stamp would be considered a personal confirmation/statement/act of the signatory but not necessarily of the legal entity the signatory is supposed to or claims to represent.

According to legal regulations, every company is encouraged to use a company stamp/seal which must display the name, Enterprise Registration Certificate Number and part of the registered address of the legal entity and whose ink must be red.

The company stamp must be affixed on one third of the authorized person’s signature and, if the document consists of several pages, a separate stamp/seal imprint extending to all pages is to be used (to confirm the integrity of a multipage document).

These particularities should therefore always be given special attention when participating in business transactions in Vietnam.

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Your point of contact in Vietnam: Christian Brendel

Brendel & Associates Law Co., Ltd.

D&D Tower, 10th Floor
458 Nguyen Thi Minh Khai Ward 2, District 3
Ho-Chi-Minh-Stadt, Vietnam

CELL     +84 98 978 4791
TEL       +84 28 3911 2008
FAX       +84 28 3911 2010

www.brendel-associates.com
info@brendel-associates.com