Member Article

After getting the knowledge of GPA Model and PPP Model, the bidders need to know how to make preparation during the pre-bid stage. Following are the responses to some most frequently asked questions regarding bidding qualifications, based on which the foreign bidders can make its preparation plan.

Is the bidding process only open to bidders from specific countries?

In general, regardless of whether the GPA or PPP model is used, most projects should not have any specific country restriction. However, if the bidding project involves issues of national security, public health or similar factors, or certain industries that have legal restrictions on foreign investment, the procuring entity may require that bidders (including Taiwan companies) be subject to a maximum limit on foreign ownership. 

In addition, under the GPA model, the procuring entity will announce in the tender documents whether the project is subject to any treaties or agreements (such as BIAs and FTAs) and whether it is open to bidders from non-treaty countries, so that foreign bidders may confirm in advance whether they meet the bidding qualifications.

Are foreign bidders required to establish Taiwan business entities in order to participate in the bidding process?

Foreign bidders may need to prepare to establish a Taiwan entity if so required by such project. Bidding qualifications will be defined based on the nature of the contract to be performed. In principle, if a Taiwan entity is required to carry out the contract (e.g., for operation management, repairs and warranty, etc.) the tender documents may require foreign bidders to set up a Taiwan entity (such as a Taiwan branch or representative office).

If a bidder is required to have a Taiwan entity at the start of the bidding process, the bidder should spare around two months to complete the formation process: one month for the authority’s review process, plus time to prepare the necessary application documents (of which some identification documents will be required to be notarized and legalized).

There are instances where foreign bidders are allowed to submit bids without first meeting such requirements, provided that if selected, the bidder must obtain such qualifications in accordance with Taiwan law and contractual provisions. An inherent risk of using this alternative is that the bidder may be unable to obtain such qualifications and suffer the consequence of breaching the contract (as well as the penalty).

On the other hand, if the contract may be performed from abroad or cross-border, such as the importing of goods or procurement through written or electronic means (such as software design) or through a Taiwan agent, then the foreign bidders may be qualified to bid on such projects directly and, if successful, can sign the procurement contract in the name of the foreign bidder.

For example, the bidding guidelines for the Sanxia-Yingge metro system project states that foreign companies providing rolling-stock, signaling, power supply, or systems integration and management are not required to have obtained formal recognition in Taiwan or have established a branch office, so long as they include the following in their application: 

(a) certificate of incorporation from their place of incorporation, notarized by a local notary and legalized by a Taiwan embassy, and,

(b) a Chinese translation of the certificate that has been certified by a Taiwan court or notary.

Are bidders required to join an industry association to participate in the bidding process?

Except for certain industries, there is no such requirement in general.

For industries such as engineering consulting or construction that require the review and approval of the competent authority in Taiwan and joining an industry association, bidders must include proof that such requirements have been met when submitting their bid. 

For example, the bidding guidelines for the Sanxia-Yingge metro system project states that if a foreign bidder is participating as a construction company, the bidder must first have obtained the approval of the competent authority in Taiwan, completed registration and obtained a construction industry registration certificate.