In brief: Authorities in Taiwan allege that the head of smartphone maker OnePlus illegally hired more than 70 software engineers in Taiwan through a Hong Kong shell company without obtaining proper approval from the Taiwanese government. Given the complex relationship between the territories, it remains unclear whether the CEO faces any real possibility of arrest.
According to CNA, two Taiwanese nationals were recently indicted for recruiting engineers on behalf of OnePlus, which is based in mainland China. Authorities charged Lau with violating the Cross-Strait Act, which regulates interactions between individuals and businesses in Taiwan and China.
The law was implemented in the early 90s to prevent the transfer of critical technology and expertise from Taiwan to China. China regards the self-governed island as a breakaway territory it has repeatedly pledged to reclaim, by military force if necessary. Taiwan considers its technology sector – including dominant semiconductor manufacturer TSMC – to be a vital national asset.
Lau, the former vice president of Chinese hardware company Oppo, founded OnePlus in 2013. The company has since become well regarded for producing Android smartphones that balance high performance with affordability. TechSpot has ranked its devices among the best smartphone value propositions for several years.
The indicted Taiwanese citizens, surnamed Lin and Cheng, allegedly helped Lau establish a OnePlus subsidiary in Hong Kong in 2014, from which he opened a Taiwanese branch the following year. According to the indictment, Lau instructed Lin to hire more than 70 engineers, likely to develop software for OnePlus's Android-based operating system.
Between 2015 and 2021, OnePlus Shenzhen transferred approximately $73 million to the Taiwan-based company through a separate Hong Kong firm, ostensibly for research, development, and the sale of research results. In 2019, OnePlus Hong Kong drew further scrutiny when it changed its name to Hong Kong Sonic Sky Consultancy, with the Taiwan office later identifying itself as a local branch. However, Cheng later admitted to authorities that the entity's sole purpose was to develop software for OnePlus.
Taiwanese prosecutors likely view the practice of hiring employees through Hong Kong subsidiaries with changing names as a violation of the Cross-Strait Act, as the legislation does not explicitly mention Hong Kong. A separate law governs relations between Taiwan, the former British colony, and Macau, which China administers under a special administrative status.
Because China does not extradite its citizens to Taiwan, Lau likely faces no immediate threat of arrest unless he enters Taiwan. However, the case's potential ramifications for OnePlus's global operations remain unclear. The company, like other prominent Chinese brands, has previously drawn scrutiny from US politicians over allegations that it sends personal data to China, though no conclusive evidence has emerged.