People walk at the headquarters of Alibaba in Hangzhou, Zhejiang province, April 23, 2014. [Photo/Agencies]

The local economic authorities of Taiwan have started a strict investigation into Chinese mainland companies' investment in Taiwan, with e-commerce mammoth Alibaba as one of the companies that will possibly face punishment.

According to the registration information provided by the Taiwan economic authorities, Alibaba Singapore E-commerce Private Limited applied for registration in Taiwan in 2008, with its business covering information software services, information processing services, general advertising services and leaflets distribution services.

However, the local economic authorities have discovered that Alibaba Singapore E-commerce Private Limited has not handed in supplementary registration as a Chinese mainland company. If the company does not hand in the required application within six months' time, it will be required to withdraw from Taiwan.

Alibaba defines itself as an international one, for the holding company is listed in the United States, and only 16.28 percent of the shares are held by Chinese mainland shareholders, with SoftBank and Yahoo still the major shareholders.

Therefore, Alibaba thinks the affiliate in Taiwan is not violating local laws considering the number of Chinese mainland shareholders and directors do not make up the majority.