Alibaba Taiwan sent home

Alibaba Taiwan has been told by government officials to pack up and head home.

The Taiwanese government’s Investment Commission has formally instructed the Chinese Mainland-based eCommerce giant to withdraw from the country within six months ruling the company had violated investment rules required for a Chinese company.

The banishment was reported by Reuters and other major news services, based on information provided by an official from the economics ministry.

Alibaba has been fined T$120,000 (a meagre US$3,824) and must “withdraw or transfer its holdings from its operation in Taiwan”, Emile M.P. Chang, acting executive secretary for the Investment Commission, was quoted by Reuters.

That Alibaba will ultimately be forced to discontinue its business in Taiwan is unlikely.

It is common for Mainland Chinese companies to fall foul of investment laws with Taiwan and the Mainland still technically political enemies despite fast-growing economic and trade ties which have been building steadily over the last five years. Mainland China does not recognise Taiwan as an independent state.

The commission’s ruling follows an investigation launched last September. The commission says it requested documentation from Alibaba to prove it complied with local business regulations. When those documents were not forthcoming, the cessation order was made.

Alibaba considers the move a misunderstanding.

“We will actively communicate with the authority and provide the required supporting materials to comply with the latest requirements,” the company said in a statement.

“Since Alibaba Group, the parent company of Alibaba.com, went public in the United States last September, the authority took a different view about the internal structure of Alibaba Group and deemed it as a mainland Chinese company.”

Alibaba Taiwan was founded in 2008 through a Singapore-registered subsidiary. Alibaba says that business was founded in compliance with Taiwanese regulations applicable at the time.