Taiwan Jurisdiction: A Capital Markets Overview

Taiwan Asset Management Regulatory Developments in 2026

Taiwan’s asset management market is at a pivotal stage of regulatory transformation. Over the past year, the competent authorities have used the Kaohsiung Asset Management Zone (or the “Kaohsiung Zone”) as a pilot platform to introduce liberalisation measures covering offshore funds, exchange-traded funds (ETFs), private equity, family offices, and virtual assets, while also considering codifying these measures through dedicated legislation. For market participants, the opportunity lies in greater flexibility in products and business models; the challenge is that many of the more significant liberalisation measures remain at the pilot or phased-implementation stage, and some will require legislative deliberation.

Kaohsiung Asset Management Zone: from pilot programme to broader implementation

The Kaohsiung Asset Management Zone serves as a regulatory testing platform for new asset management businesses. The Financial Supervisory Commission (FSC) is presently expanding the scope of the pilot programme to cover cross-border financial services, trust investments in virtual-asset ETFs, distribution of certain offshore funds, and the easing of limits on the number of investors in private funds. More mature family-office services and certain insurance products are expected to be rolled out beyond the Kaohsiung Zone. The authorities also plan to establish an Offshore Asset Management Unit (OAMU) framework linked with the existing Offshore Banking Unit (OBU), Offshore Securities Unit (OSU), and Offshore Insurance Unit (OIU) regimes.

ETF market: product innovation and cross-border co-operation enter the next stage

Taiwan’s ETF market has grown rapidly since active ETFs and passive multi-asset ETFs were permitted in 2025. In 2026, the regulatory focus has shifted towards product structures and investment restrictions, including relaxing the cap on investments by equity funds and active equity ETFs in the shares of a single company. The Taiwan Stock Exchange Corporation continues to assess new products such as active multi-asset ETFs, ETF of ETFs, target-maturity products, and covered-call products. On the cross-border front, feeder arrangements in terms of ETFs between Taiwan and Japan have been implemented, while regulatory alignment with major fund markets such as Ireland warrants attention. Expansion of product offerings is also expected to increase compliance costs.

Offshore funds: easing product access while encouraging substantive operations in Taiwan

In March 2026, the FSC introduced a new category of “multi-asset offshore funds”, permitting allocations across equities, bonds, fund beneficiary certificates, and REITs, while also adjusting restrictions relating to non-investment-grade and Rule 144A bonds. The authorities are also encouraging offshore institutions to establish regional centres in Taiwan. Qualified institutions may benefit from a 45 business-day report effective registration mechanism; where a regional centre performs core functions, and the cap on investment by Taiwan investors in an individual fund may even be raised to 90%, reflecting a policy direction of offering greater market-access flexibility in exchange for substantive operations in Taiwan. However, not all market participants have sufficient resources to satisfy the relevant conditions, and it remains uncertain whether the measures will attract broader participation.

Private equity funds: relaxation of investment limits for insurance companies

To support the “Trillion-Dollar Investment National Development Plan” and encourage insurance companies to invest in private equity funds focused on public infrastructure, the FSC has relaxed the investment cap applicable to insurance companies investing in domestic private equity funds that have obtained a qualification letter issued by the National Development Council. The investment limit has been increased from 20% to 25% of the investee’s total issued shares or paid-in capital, thereby creating greater capacity for insurance capital to participate in public infrastructure projects. Nevertheless, each investment remains subject to the requirements set out in the relevant qualification letter and the procedural requirements governing project-specific investments.

Asset management special legislation: from pilot measures to institutionalisation

The Executive Yuan and the FSC are developing a draft Financial Development and Asset Management Development Act (the “Asset Management Special Act”), focusing on market development, the asset management framework, international talent, tax incentives, and the establishment of designated zones. A core function of the special legislation is to create differentiated regulatory pathways – where existing law already provides statutory authorisation and only the applicable conditions need to be adjusted, changes may be implemented directly through administrative directives, as has been the approach with successive liberalisation measures in the Kaohsiung Zone. Where changes are constrained by the statutory hierarchy – for example, limits under the Securities Investment Trust and Consulting Act on the number of offerees for privately placed offshore funds, or tax incentives for offshore capital and talent under tax laws – special legislation at the statutory level, together with co-ordination among the relevant authorities, will be required. As this process involves review by the Legislative Yuan and inter-ministerial consensus, it is expected to take considerably longer.

Family offices: the next mile towards a formal regulatory framework

The formalisation of Taiwan’s family-office framework began at the end of 2023, when the FSC permitted securities investment consulting enterprises to provide “integrated family-office advisory services”. Beginning in 2024, banks in the Kaohsiung Zone were allowed to provide advisory services on family-office establishment, investment and financing, and succession trust planning; securities investment trust and consulting enterprises holding discretionary investment management licences were also permitted to pilot external asset management (EAM) services. The FSC has further stated that family-office services will be among the first businesses to expand beyond the Kaohsiung Zone for nationwide implementation. The current framework, however, remains limited to financial institutions, differing from the approaches in Hong Kong and Singapore, which license by activity and provide exemptions for single-family offices.

Virtual Asset Service Act: a prerequisite for business development in the era of dedicated legislation

The Virtual Asset Service Act was promulgated on 22 July 2026, with its effective date to be determined by the Executive Yuan. The Act establishes a regulatory framework for virtual asset service providers and rules governing stablecoin issuance, and expressly regulates fraudulent or deceptive conduct and price manipulation. An offshore service provider seeking to provide services in Taiwan must establish a branch and obtain FSC approval. Stablecoin issuance also requires FSC approval and fully backed reserve assets. Further details, including issuer qualifications and application procedures, remain subject to implementing regulations. For offshore market participants, the content of those regulations and the Act’s effective date will be key variables going forward.

Outlook: key considerations for market participants

Changes in Taiwan’s asset management sector over the coming year are expected to be rapid and significant, with two policy tracks advancing in parallel: “institutionalising emerging businesses and pilot-program outcomes” and “offering greater market-access flexibility in exchange for substantive operations in Taiwan”. The challenge for market participants will be how to apply for and launch new businesses while satisfying the full range of compliance requirements. A prudent response is to assess the functional allocation of Taiwan operations at an early stage, engage closely with the competent authorities and relevant external advisers from the outset of product and service planning, and remain abreast of regulatory and policy developments.