* Chinese companies able to invest in Taiwan from May 1
* China's QDIIs can take an up to 10 pct stake in Taiwan cos
(Adds Taiwan comments from fifth paragraph)
BEIJING/TAIPEI, April 29 (Reuters) - China has established rules allowing its companies to invest in Taiwan from May 1, an important step towards allowing potentially vast financial flows across the Taiwan Strait.
The announcement by the Chinese commerce ministry, posted on its website late on Tuesday, following the signing of landmark agreements on Sunday that lay the groundwork for investment in financial services between the two former adversaries.
"According to the framework and related rules, we will push for Taiwan and China to promptly realise direct, two-way investment," the statement said.
"The Ministry of Commerce will actively encourage and support qualified mainland companies to go to Taiwan to investigate and understand the investment environment and seek business opportunities," it said.
Taiwan, whose trade ties with Beijing have warmed since last year under President Ma Ying-jeou's administration, said on Wednesday China's qualified domestic institutional investors (QDII) can only buy a stake of up to 10 percent of a local company.
"Chinese investors cannot be elected as a board member or a supervisor of the company they invest in," Taiwan's Financial Supervisory Commission said in a statement. "They cannot control or affect the company's management."
On Wednesday, China Mobile, the world's largest mobile carrier by users, said it planned to buy 12 percent of Taiwan's Far EasTone for $529 million, in one of the biggest investments by a Chinese firm in Taiwan as ties warm between the former rivals. (Reporting by Simon Rabinovitch in Beijing and Faith Hung in Taipei; Editing by Andrew Macdonald)