Are collaterals needed to apply for Overseas Investment Credit?
Since Overseas Investment Credit is a medium and long-term credit, manufacturers must provide bank guarantee or collateral approved by Eximbank.
How are interest rates of the Overseas Investment Credit calculated?
1.US dollar: Interest is calculated based on the 6 months LIBOR rate two working days prior to disbursement of loan money, plus margin.
2.NT dollar: Interest is calculated based on 6 months TAIBOR rate plus margin.
Interested manufacturers can call the numbers below. Eximbank will be glad to serve you.
Direct line: (02)23218284 or (02)23925235
Because countries have different real estates laws and Eximbank has limited number of overseas branch offices, the branch offices are legally empowered to dispose of these real estates is still debatable. Therefore, Eximbank at present cannot accept real estates of foreign invested enterprises as collaterals.
During the grace period, only the interest not the principal has to be paid.
The length of the grace period depends on actual requirements of the manufacturer’s investment plan. It is usually less than one year.
Interested borrowers should present information on the current company situation, investment plan, and possible collaterals for initial assessment to allow Eximbank to determine whether to accept the application.
The credit applicant should present the following documents:
2.Copies of the income tax return of the application in the last three years (or audited financial report), company registration, factory registration certificate, list of major shareholders, and list of board members.
3.Application from government authority
4.Investment plan including feasibility study
In principle, Eximbank can finish credit processing within one month upon receipt of application form and complete credit information.
At present, Eximbank has no foreign branch offices to process mortgage, appraisal, and auction in foreign investments. For this reason, Eximbank is unable to accept foreign assets as collaterals.
The government incentives cover the following:
Investments for the development of foreign resources to supply natural raw materials, intermediate products, or spare parts and components to Taiwan.
Investments that help establish overseas production plants to develop foreign markets.
Investments that import major technologies and process technologies that are helpful in the upgrade of Taiwan industries.
Investments that help integrate the upstream, midstream, and downstream industries.
Investments in countries with diplomatic ties with Taiwan.
Overseas Investment Credit is a medium and long-term credit. Eximbank will evaluate the investment plan provided by the applicant and determine the tenor based on the investment payback period. In principle, the credit shall not exceed seven years. Depending on the status of the investment payback, Eximbank will also approve a grace period. During the grace period, the borrower needs only to pay for the interest and not principal. The loan principal is paid once every six months, while the interest is paid once every three months.
Eighty percent of foreign share capital investment maximum. Loan currency is US dollars or NT dollars.
The applicant must be a Taiwan manufacturer (not an individual investor) investing overseas, and the investment plan must have been reviewed (or filed on record) by the Investment Commission under the Ministry of Economic Affairs.
Overseas Investment Credit is one of the professional services offered by Eximbank in line with government policy, which offers loans to Taiwan manufacturers who invest in factories or conduct business overseas.