Taobao asked to down shutters in Taiwan

E-commerce giant Alibaba Group Holding Ltd has been given six months to wind down its online marketplace Taobao's operations in Taiwan after it failed to apply for the permit required for a company on the Chinese mainland to do business there, Taipei authorities said on May 18.

An official at the Investment Commission said a fine of NT$240,000 ($7,890) has also been imposed on Taobao in what is the second case of an Alibaba operation falling foul of the permit rules for mainland companies this year. In March, Alibaba.com was told to leave the island within six months and fined NT$120,000 for a similar reason.

While the fine is small and Taiwan shoppers can continue to orders goods via Taobao's mainland base in the future, the permits glitch is an unwelcome headache for Alibaba as its seeks to grow business outside its mainland base.

Mainland companies registered overseas need to apply for mainland business permits in Taiwan, Investment Commission executive secretary Emile Chang said. "Neither Alibaba nor Taobao has done so."

He noted the companies could still apply for mainland-owned company permits and potentially maintain operations in Taiwan.