The Committee appreciates the government’s attention to the recommendations outlined in the 2025 Taiwan White Paper and its continued engagement on key policy issues. In particular, the committee appreciates the continuing discussion on two outstanding items: allowing foreign bank subsidiaries and branches in Taiwan to support their overseas group entities in providing cross-border financial services and expanding the application scope of the operating rules governing security measures for financial institutions using electronic signature mechanisms. While these issues remain unresolved, the Committee welcomes the continued dialogue and has reiterated these recommendations this year.

In addition to these two continuing priorities, this year’s White Paper highlights a new area for consideration. This is easing restrictions on the use of proceeds and issuance caps for New Taiwan dollar financial debentures issued by foreign bank branches in Taiwan.

Timely progress on these three issues would support further liberalization of Taiwan’s financial sector and enhance its attractiveness as a regional financial hub. Advancing these reforms would also encourage greater participation by foreign institutions and strengthen the competitiveness and long-term development of Taiwan’s financial industry.

Suggestion 1: Allow foreign banks to support Taiwanese multinational corporations in accessing cross-border financial services.

In the current global environment, Taiwanese multinational corporations (MNCs) must continuously adjust their international strategies in response to geopolitical and economic developments. Such adjustments include establishing overseas operations and financial networks to support cross-border payments, capital movements, and financing needs. Timely access to integrated financial services is therefore critical to maintaining their global competitiveness.

However, Taiwanese MNCs face practical challenges when entering new markets, including time zone differences, language barriers, and unfamiliarity with local regulatory and financial systems. In some jurisdictions, Taiwanese banks have limited or no presence, while in others their service offerings may not fully meet the operational needs of MNCs. As a result, many Taiwanese companies rely on international banks with global networks to support their overseas activities.

Foreign bank subsidiaries and branches in Taiwan play an important role in this process by serving as a point of contact for Taiwanese MNCs. Through coordination with their overseas affiliates, these institutions can facilitate access to cross-border financial services and support clients in establishing relationships with financial institutions in other jurisdictions and in providing ongoing assistance in client identification and verification, document handling, information handling and other non-transaction support functions. Such arrangements and assistance are consistent with common international banking practices, under which financial institutions assist clients in connecting with affiliated entities across markets.

Under the current regulatory framework, however, foreign bank subsidiaries and branches in Taiwan face restrictions in facilitating and assisting their overseas affiliates in certain client-related activities. Official letters issued in 2010 and 2014 limit the ability of these institutions to support client onboarding or account opening for overseas entities without prior regulatory approval. While we understand that these measures may be necessary to prevent unregulated solicitation of offshore deposits and capital outflows, in practice their application also constrains the ability of Taiwanese MNCs to efficiently establish and effectively utilize overseas financial arrangements necessary for their operations.

In many cases, the assistance provided by foreign banks in Taiwan is limited to administrative and client service functions performed at the request of the client, while the underlying financial services are conducted offshore by appropriately licensed entities. Such activities are distinct from deposit-taking or financial intermediation conducted in Taiwan and are comparable to the cooperation permitted between domestic banks and their overseas branches in support of customer due diligence and account management processes.

The committee looks forward to continuing to work with the authorities to achieve permission for foreign bank subsidiaries and branches in Taiwan to assist their overseas affiliates providing cross-border financial services to Taiwan MNC clients without prior approval while at the same time putting in place regulatory oversight and internal controls that address regulatory concerns regarding unregulated solicitation of capital outflows or other financial abuses. Such assistance may include client identification and verification, document handling, information collection, and other non-transactional support functions. Enabling these activities would facilitate the development of cross-border financial networks for Taiwanese enterprises while maintaining regulatory safeguards.

Suggestion 2: Ease restrictions on the use of proceeds and issuance caps for NTD financial debentures issued by foreign bank branches in Taiwan.

Since the promulgation of the “Regulations Governing the Issuance of New Taiwan Dollar Financial Bonds by Branches of Foreign Banks in Taiwan” in 2018, key restrictions on the use of proceeds and total issuance limits have remained unchanged. Under Article 4, proceeds are limited to financing for major infrastructure projects, offshore wind power, other green energy industries, or sustainable economic activities designated by the Financial Supervisory Commission. Article 7 further stipulates that total issuance by a foreign bank branch may not exceed eight times its net worth in Taiwan.

These restrictions limit the ability of foreign bank branches to support the broader financing needs of Taiwanese enterprises. In particular, the exclusion of general corporate lending, including working capital and trade finance, and other general corporate purposes loans, does not reflect the primary funding needs of local businesses. However, the Taiwan branches lack a stable source of medium/long-term New Taiwan dollar (NTD) funding, and therefore rely mainly on shortterm funds — such as term deposits and interbank borrowings — to finance medium/long term NTD loans. At the same time, financial debentures have become an important component of foreign bank branches’ capital strategies, providing stable medium- to long-term local currency funding to support lending activities and fulfill liquidity ratio imposed by the Central Bank and internal medium- and long-term liquidity guidelines.

To address these constraints, the Committee recommends the following:

2.1   Expand the permitted use of proceeds to include general corporate lending. Article 4 be amended to allow proceeds to be used for general corporate purposes, including working capital, trade finance, and capital expenditures. This would better align regulatory policy with the financing needs of Taiwanese enterprises; and

2.2   Increase flexibility in issuance limits for NTD financial debentures. Article 7 be amended to change the cap from a fixed cap of 8 times net worth to a range, such as “8-15 times,” and then allow the Financial Supervisory Commission to adjust limits within that range based on macroprudential conditions.

While maintaining appropriate prudential oversight, these amendments would enable foreign bank branches to more effectively support corporate financing needs, deepen the local NTD bond market, and align Taiwan’s regulatory framework with international practices.

Suggestion 3: Continue to relax restrictions on the use of electronic signatures in financial services.

Recent regulatory developments have resulted in a more complete legal framework for the use of electronic signatures in Taiwan. The Legislative Yuan passed amendments to the Electronic Signatures Act on April 30, 2024, which were promulgated on May 15, 2024, affirming the legal equivalence of electronic records and signatures. Previously, the Ministry of Digital Affairs in 2022 had assumed responsibility for implementation of digital signature regulations and has since issued interpretations to support financial digitalization. In addition, the Bankers Association of the Republic of China has introduced operating rules to support the use of electronic signatures in financial institutions.

However, inconsistencies remain between the operating rules and the Electronic Signature Act. While the Act affirms that electronic signatures should have the same legal effect as handwritten signatures when statutory requirements are met, the current operating rules limit the scope of permissible applications to specific transaction types defined under the guidelines for security measures of financial institutions for electronic banking services. As raised in our prior White Paper suggestions, these additional restrictions create uncertainty for banks and constrain the broader use of electronic signatures in practice.

Electronic signatures are widely used across industries, including by multinational corporations that rely on digital tools to execute financial and commercial transactions. Current requirements, such as obtaining written consent verified by company seals and defining the scope of application in advance reduce operational efficiency and limit the flexibility of digital processes.

Given that banks are already required to conduct risk assessments and establish internal control mechanisms when offering electronic signature services, the Committee continues to recommend that regulatory restrictions on permissible application scenarios be relaxed. Banks and customers should be allowed to mutually determine the appropriate scope of electronic signature use in their dealings subject to adequate risk management.

Relaxing these restrictions would reduce regulatory inconsistency, enhance operational flexibility, and support the continued development of Taiwan’s digital economy while maintaining appropriate safeguards.