China-based e-commerce company Alibaba is set to launch a TWD 10bn ($319m) non-profit investment fund that will target Taiwan-based startups operating on its platforms.
The announcement of the fund yesterday follows Alibaba chairman Jack Ma’s assertion in December that he planned to invest in Taiwanese startups. Alibaba launched a similar Hong Kong-based fund with $129m of capital earlier this month.
The fund is set to be run by professional investment managers and Alibaba expects it to begin operations in the second half of 2015, once regulatory approval has been granted. It will initially focus on food and agribusinesses and will re-invest any profits into other startups.
However, Alibaba’s announcement of the initiative has been overshadowed by Taiwan’s investment regulator, which has instructed it to leave the country by the end of August due to a regulatory issue.
Alibaba’s local entity in Taiwan is registered as Singaporean and not mainland Chinese, which enables it to trade in the country without explicit permission from the investment regulator, but documents filed as part of its initial public offering in the US last year made the company’s control over its Singaporean unit clear, effectively forcing Taiwan’s hand.
Emile Chang, acting executive secretary of Taiwan’s Investment Commission, confirmed to Bloomberg that Alibaba has been asked to leave the country, adding: “We just want mainland investors who invest in Taiwan to follow the rules.
“Alibaba’s Singapore subsidiary didn’t get approval from my office,” he said, stating that the company can either sell the regional holding company to another investor or close it.