Taiwan launches Asia Innovation Capital, anticipates next tech wave

Taiwan unveiled the Asia Innovation Capital initiative to modernize its markets and attract global high-growth firms.

At the Oct. 21 Asia Innovation Capital Launch in Taipei, Taiwan's Financial Supervisory Commission (FSC) leaders unveiled a reform plan to modernize Taiwan’s markets and attract innovative firms from across Asia and beyond.

FSC chair Peng Jin-lung (彭金隆) portrayed the initiative as pivotal to sustaining Taiwan's industrial evolution and fortifying the global stature of its capital markets.

The Asia Innovation Capital

The initiative, spearheaded by FSC in coordination with the Taiwan Stock Exchange (TWSE) and Taipei Exchange (TPEx), comprises 13 targeted measures across equity and bond markets, intended to fortify market depth, simplify regulatory hurdles, and bolster cross-border capital flows.

As stated by FSC official documents, there are three main adjustments in terms of the equity market. Firstly, the Taiwan Innovation Board (TIB) will see an upgraded listing and trading framework. Day trading will be permitted while rules are being recalibrated to enhance liquidity and scale.

Secondly, foreign listing rules are being relaxed, including lower requirements for Taiwanese directors and shorter underwriting sponsorship periods, to encourage more overseas companies to list in Taiwan.

Lastly, the reforms also increase flexibility for board transfers and loosen credit-trading standards for over-the-counter (OTC) equities to stimulate broader participation.

In the bond market, the reforms will allow foreign-currency bonds issued offshore to pursue dual listings in Taiwan, thereby expanding the scale and depth of the international bond market.

Eligibility criteria for foreign corporate issuers will also be broadened, with an aim to diversify fundraising channels in the bond market.

The National Development Council (NDC), the inter-ministerial policy-planning agency of Taiwan's executive, discussed FSC's Asia Innovation Capital on Oct. 30.

NDC Minister Yeh Chun-hsien (葉俊顯) remarked that beyond existing channels such as angel investors, venture capital, and the National Development Fund, the startup ecosystem will now gain additional momentum through this new platform. By bringing together forces like TWSE and TPEx, the initiative would forge a more comprehensive and cohesive support framework for emerging enterprises, he added.

Further elaborating on the importance of the event, Minister Yeh said the power of capital markets could be harnessed to boost advancement in artificial intelligence (AI), cybersecurity and communications, green energy and sustainability, biotechnology and smart healthcare, as well as national defense autonomy.

He noted that by channeling investment into these frontier sectors, the initiative seeks to foster collaboration across industrial value chains, accelerate corporate upgrading, and nurture clusters of technology innovators. As a result, Taiwan would have “nation-protecting mountains” instead of one “nation-protecting mountain,” referring to the semiconductor industry, he added.

The NDC pledged continued coordination to connect innovation policy with capital market evolution and asked FSC to actively promote the initiative in order to enhance Taiwan's global competitiveness and international visibility.


Rationale and vision

The initiative arrived amid intensifying competition among Asian financial centers, from Singapore and Hong Kong to Seoul, each vying to capture the fundraising pipeline for artificial intelligence, green technology, and digital transformation.

FSC Vice Chairperson Chuang Hsou-yuan (莊琇媛) said, at the Asia Innovation Capital Launching Ceremony, that the initiative embodies Taiwan's ambition to merge finance with innovation. She said that it is an increasingly challenging time, and that the initiative would benefit the innovations and transformations of startup companies, corporations considered hidden champions, as well as “silicon shield” companies in the semiconductor sector.

The “silicon shield” refers to the idea that Taiwan’s dominance in semiconductor production deters potential attacks due to its critical role in global supply chains.

Chuang quoted President Lai Ching-te's (賴清德) remarks on making Taiwan the Nasdaq of Asia. She then shared that Taiwanese pharmaceutical company Bora Pharmaceuticals had thanked Taiwanese financial institutions and the capital market for enabling it to thrive around the world.

FSC Director General of Banking Bureau Tong, Chen-Chang (童政彰) stated in October that Taiwan possesses distinct comparative advantages for becoming a regional financial hub: Having abundant funds, holding a solid ICT and industrial foundation, and hosting 1.67 million small and medium enterprises (SMEs).

Singaporean news outlet finews.asia stated that the overarching objective of FSC is to cultivate a vibrant and innovation-friendly market ecosystem, one that catalyzes industrial transformation and draws international capital eager to capture high-value opportunities within Asia's rapidly expanding AI economy.

TWSE also stated that the Asia Innovation Capital platform is poised to propel Taiwan toward its vision of an “Innovative Economy, Smart Nation”, per Economic Daily News. According to the same report,  TWSE stated further that the aim is to leverage Taiwan's abundant private capital and globally competitive industries to attract both domestic and international investment.

Beyond regulatory easing, TWSE and TPEx will join forces in pooling resources to assist enterprises in government-designated strategic sectors, such as semiconductors, AI, robotics, cloud services, smart transportation, smart healthcare, biotech, cybersecurity, next-generation communications, drones, green energy, and environmental protection, in pursuing public listings, per Taipei Times.