On the first anniversary of Taiwan opening its borders to investment from the mainland, cross-Strait economic ties have been further strengthened with the signing of the Economic Co-operation Framework Agreement (ECFA). The trade pact was reached in June in Chongqing and could prove to be particularly important for law firms.

More business and commercial exchanges across the Strait will be promoted under the framework, and the level of interaction and cooperation between the two legal industries is expected to be notably enhanced. Over the past year, a number of PRC firms have already been enthusiastically seeking ties with their Taiwan counterparts.

Dacheng and Zhongyin are active pioneers on this new frontier. In recent years they have both established two branch offices in Fujian province, a key destination for Taiwanese investment. The firms have also entered into strategic alliances with local Taiwan firms. And as the ECFA comes into force, Taiwan-related corporate and commercial legal practice will increasingly appear on the radar of the larger PRC firms. “The majority of the qualified Taiwanese companies have already established themselves in the mainland market. But ECFA has given more incentives for them to expand and restructure their operations here and will allow them to invest into new sectors that were previously prohibited,” said Steven Hsu, a senior consultant of Zhongyin and managing director of the firm's marketing centre.

Quick facts ECFA

Economic Co-operation Framework Agreemen (ECFA) signed on June 29 2010 in Chongqing; aims to set out frameworks and targets with more deregulations in the pipelines “Early harvest” list of tariff concessions covers 539 Taiwanese products and 267 mainland Chinese goods Mainland China will open markets in 11 service sectors such as banking, securities, insurance, accounting, and research & development Taiwan has agreed to offer wider access in seven areas including banking and financial services, exhibition, specialty design and film import

Hsu is a veteran lawyer in Taiwan; prior to joining Zhongyin last October to lead the firm’s international expansion and the development of its cross-Strait practice, he was a partner at Baker & McKenzie’s Taipei office. “This development will create a considerable amount of new legal demand, and may cause other larger PRC firms to tap into this area," he said, noting that in the past most of the Taiwanese companies in the mainland were serviced by smaller law firms, but that this was gradually changing.

Taiwanese clients are now more willing and comfortable to work with large PRC firms. Meanwhile, they are also changing their way of conducting business in the mainland, meaning they are needing stronger and broader legal support. “Taiwanese companies are paying growing attention to corporate governance, risk management and compliance issues in the mainland. As a result, they now prefer to work with large national firms to provide quality one-stop shop to all their legal needs, including the legal issues of their subsidiaries across the country, which are serviced by these firms’ branch offices,” Hsu said.

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