Alibaba forced to exit Taiwan
Authorities have told Alibaba to leave Taiwan after discovering that it has been registered in the country as a Singaporean company since 2008
Alibaba's founder and chairman Jack Ma. He recently said that he would invest $316m in mobile commerce start-ups in Taiwan that use Alibaba as a platform
Alibaba has been ordered to pay a fine of $3,824 and withdraw from the Taiwanese market following its alleged violation of the country’s investment regulations. The business directory website has until the end of August to close down operations and transfer its holdings from the island.
Last September, Alibaba went public in the US, leading Taiwanese authorities to review the structure of the organisation and its registration in the country. As a result, Alibaba has been deemed a mainland China firm, thereby making its listing as a Singaporean entity void.
The group will attempt to fight the decision
The company has denied any wrongdoing: “We legitimately set things up and complied with Taiwan law”, an Alibaba spokeswoman said in a company statement. As such, the group will attempt to fight the decision and meet the necessary requirements in order to continue operating in Taiwan.
Despite improved economic ties, relations between Taiwan and China remain strained, with the former enforcing strict regulations on Chinese companies, and the latter frequently attempting to assert its dominance over the island. Only in 2009 were Chinese subsidiaries permitted to operate in Taiwan; yet, Alibaba had established its branch during the previous year.
Although Alibaba will be shut out from the Taiwanese market, the implications on the company’s revenue may be negligible. “Most of the registered users and business of Alibaba are not in Taiwan, so I believe its withdrawal will have almost zero impact on Alibaba’s results”, Hong Bo, a Beijing-based independent internet analyst told the Financial Times.
The decision came shortly after the group’s founder and chairman, Jack Ma, announced that he plans to invest $316m in mobile commerce start-ups in Taiwan that use Alibaba as a platform.
The decision seems politically motivated, and one that is being used to make an example of Chinese companies circumventing Taiwan’s business regulations. With Alibaba attempting to reverse the move and its recent promise of investing in the island’s tech entrepreneurs, there are some doubts over whether the decision will stick. If, however, it is maintained, than it may be enterprises in Taiwan that lose out as a result, while Jack Ma concentrates his efforts at conquering the business world elsewhere.
