The Committee sincerely appreciates the government’s efforts in addressing the recommendations presented in the 2024 White Paper. The National Development Council (NDC) has arranged several meetings to discuss our suggestions, contributing to some positive developments.

We particularly express our appreciation for the government’s attention to simplifying the review process for foreign investments. Relevant agencies have been convened to examine the regulatory framework and explore ways to streamline application documentation while actively seeking input from stakeholders. We are encouraged by the government’s continued efforts to promote Taiwan internationally and to welcome foreign investment across a diverse range of fund types.

In the spirit of our ongoing collaboration with the government, the Committee presents the following recommendations for 2025:

Suggestion 1: Enhance the regulatory and operational environment to support foreign direct investment, transactions, divestments, and mergers and acquisitions.

Foreign equity investments entering Taiwan for operational purposes are primarily governed by the Statute for Investment by Foreign Nationals and are subject to prior approval from the Department of Investment Review (DIR) under the Ministry of Economic Affairs. However, the Statute has remained unchanged since 1997 and no longer reflects modern foreign direct investment (FDI) practices.

The Committee is encouraged by the government’s consideration of potential amendments to the Statute and urges that previously submitted recommendations be incorporated, either through amendments or updated administrative regulations. Key suggestions include to:

• Lower the threshold for FDI and divestments approval and establish a flexible, investor-friendly registration and reporting system.
• Allow investments involving national security, regulated industries, or anti-money laundering concerns to be managed through separate special review mechanisms.
• Enable project-based approvals and allow designated entities, not limited to parent companies or headquarters, to act as applicants to improve responsiveness and timeliness.

Taiwan’s FDI framework should support the efficient divestment of foreign capital. We understand that the DIR is in the process of developing a pre-review mechanism for significant investment and divestment cases. This mechanism would allow foreign investors to engage in preliminary discussions with the authorities and adjust transaction structures in advance. The Committee looks forward to the timely implementation of this mechanism to improve transparency and predictability in the investment process.

For major investment and divestment applications, the DIR typically consults relevant agencies, including the Ministry of Labor, Fair Trade Commission, Central Bank, and regulators like the Financial Supervisory Commission (FSC), once application documents are deemed complete. However, this inter-agency consultation process lacks transparency, as applicants cannot directly engage with these agencies. While the DIR may request responses within a set timeframe, these deadlines are not binding, and delays in feedback often impede approval timelines.

The Committee recommends establishing a structured communication platform to facilitate engagement between foreign investors and relevant central and local authorities. The NDC could coordinate among the various agencies and local governments involved. Such a mechanism would help resolve regulatory and implementation issues, accelerate reviews, improve efficiency, and reduce uncertainty by providing coordinated support to foreign investors.

With respect to simplifying application procedures, the Committee notes that under the “Required Documents and Guidance Notes for Investment Application by Overseas Chinese and Foreign Nationals” (Guidance Notes), applicants must submit an original notarized, attested, or authenticated power of attorney (PoA). This must be certified by a “local” authority, such as a government agency, court, or notary public, in the foreign entity’s country of incorporation. If not, authentication by a Taiwan overseas mission is required, often resulting in delays.

Requiring notarization in the entity’s country of incorporation imposes undue burdens, particularly considering the rise of globalization and remote work. Cross-border M&A often moves on accelerated timelines, and such documentation delays can derail transactions or deter investors. The Committee recommends allowing notarization or attestation in the director’s or signatory’s current location, regardless of the entity’s place of incorporation. Doing so also encourages authorities to consider exempting PoA notarization, attestation, and authentication requirements altogether, in line with international trends toward streamlined administration.

Additionally, in cases where a cross-border merger or acquisition results in a new foreign investor acquiring equity in a Taiwanese company, the Guidance Notes require submission of the original investor’s shareholders meeting minutes approving the transaction. The DIR may further request legal opinions from local counsel and require that shareholders meeting minutes and merger agreements (or demerger plans) be notarized, attested, or authenticated.

These requirements are often time-consuming and conflict with the fast-paced nature of M&A transactions, particularly those involving inter-company restructuring. The Committee recommends eliminating these document requirements to streamline the application process and better align Taiwan’s regulatory framework with international deal timelines and best practices.

Similarly, cross-border M&A declarations impose specific conditions on investors, such as demonstrating active business operations, being publicly listed, or belonging to the same corporate group as the acquired domestic entity. These requirements, while intended to safeguard public interest, introduce constraints that are not explicitly required under the current Statute and may merit further review and, where appropriate, relaxation. A possible approach is to introduce a general provision granting the DIR discretionary authority to assess cases based on their individual circumstances.

Recommendations:

1. Amend the Statute and related regulations to streamline procedures for mergers, acquisitions, and foreign investment procedures.
2. Improve transparency and efficiency in the investment review process by establishing a structured communication mechanism among the DIR, relevant central and local authorities, and foreign investors.
3. Simplify application documentation requirements by relaxing or removing notarization, attestation, and authentication procedures, particularly for PoAs and offshore M&A transactions.

Suggestion 2: Allow the establishment of single-family offices without requiring an asset management license and establish a Taiwan family office task force.

The Committee appreciates the response from the FSC to its suggestions regarding the establishment of family offices. As of the end of 2024, securities investment consulting enterprises are permitted to provide integrated consulting services for family offices. The Committee also understands that additional enterprises may be allowed to offer such services in the future. However, the current legislative approach remains primarily focused on enabling existing financial institutions to provide family office-related services.

We recommend that the family office framework be developed from an industry-oriented perspective. Taiwan faces structural challenges such as an aging population, declining birth rates, and the need for corporate succession and transformation. These issues require strategic vision to establish a well-structured ecosystem that brings together professionals and service providers across legal, financial, tax, asset management, investment, healthcare, retirement, education, and inheritance planning. In addition, capital should be directed toward sectors aligned with government policy priorities, such as energy or ESG-related industries, rather than limiting family office services to consolidated offerings from existing financial institutions.

As proposed in the 2024 White Paper, we urge regulators to take reference from the regulatory approaches of foreign jurisdictions, particularly neighboring Asian countries, in the development of the family office framework.

In the case of single-family offices (SFOs), which manage wealth for one family, the Committee recommends an explicit exemption from the requirement to obtain a securities investment trust, securities investment consulting, or discretionary investment management license. For example, in Hong Kong, asset management services provided exclusively to wholly owned group companies are exempt from licensing under the Securities and Futures Ordinance. Similarly, Singapore exempts entities from asset management licensing when services are provided exclusively to affiliated entities. As a result, SFOs in these jurisdictions are not subject to specific licensing requirements.

The Committee further recommends allowing licensed enterprises, such as those holding an asset management license (by adopting the concept of Type 9 of the Hong Kong Securities and Futures Ordinance), to provide services to Multi-Family Offices (MFOs) without the restriction of being an existing financial institution, such as a securities investment trust or securities investment consulting enterprise.

We also look forward to collaborating with the government and relevant stakeholders to establish a Taiwan Family Office Task Force dedicated to developing Taiwan’s family office industry. This task force should focus on key issues, including:

• Examining regulatory requirements in major financial centers such as Hong Kong, Singapore, and Dubai.
• Talent development and skills training within the family office industry.
• Promoting Taiwan as an attractive jurisdiction for both domestic and international family offices to operate and invest.

Recommendations:

1. Adopt a high-level strategic vision to develop the family office industry as an integrated sector, forming a complete industry chain.
2. Explicitly exempt SFOs from the requirement to obtain the relevant license and introduce a specialized license for MFOs.
3. Establish the “Taiwan Family Office Task Force” to coordinate regulatory and industry perspectives in the development of Taiwan’s family office sector.