Alibaba Group's e-commerce site, Taobao, is shutting its site in Taiwan after the government there ordered the firm to re-register as Chinese investment or leave the island.
Taobao Taiwan – which is run by British-registered firm Claddagh Venture Investment – said it will shut the e-commerce site due to what it sees as multiple uncertainties in the market.
The company said it will close its Taiwan operations by the end of 2020, adding that it will help merchants deliver existing orders to buyers.
The company said in a statement that it had to make the "painful decision" to stop running on December 31, but didn't elaborate further.
Taiwan's Investment Commission in August fined Claddagh NT$410,000 for violating local law governing Chinese investments and gave it six months to "rectify" the situation or withdraw its investment.
The commission started the probe after a former lawmaker claimed the firm was illegally operating on the island as it shared the same platform with Alibaba-owned Taobao.
Under Taiwan's regulations, a company is considered a Chinese investment if a Chinese entity owns more than 30 percent of its shares or has "effective control" over its operations.
The commission ruled that Claddagh is in effect controlled by Alibaba, even though it holds less than 30 percent of its shares. (Additional reporting by AFP)