Beyond Hong Kong and Singapore: Taiwan seeks a financial model built on industrial strength

Nearly a year after formally launching its Asian Asset Management Center initiative, Taiwan is working to differentiate itself from Hong Kong and Singapore by leveraging the island’s deep industrial base, semiconductor prowess, and AI-driven real economy to attract global capital.

A different formula for financial ambition

For decades, Asia's dominant financial hubs have been defined by tax efficiency, offshore wealth management, and global capital mobility. Taiwan, however, is attempting to chart a markedly different course.

Speaking at an event at the Kaohsiung Marriott Hotel on May 17, Financial Supervisory Commission (FSC) Chairman Peng Jin-lung (彭金隆) argued that Taiwan’s aspiration to become an Asian asset management center should not be measured against Hong Kong or Singapore.

“Many people question whether Taiwan becoming an Asian asset management center is even possible,” Peng said, noting that critics frequently point to Taiwan’s comparatively less attractive tax environment. “But Taiwan can develop its own characteristics — characteristics distinct from Hong Kong and Singapore.”

That distinction, he said, lies in Taiwan’s “real economy and industry,” particularly in semiconductors and artificial intelligence (AI), sectors now drawing intense international investor interest.

“Taiwan’s development focus is not policy attractiveness alone, such as tax advantages,” Peng said. “It is about having genuinely competitive and profitable industries. If there are real opportunities to make money, investors will overcome difficulties and come.”

Early results after nearly one year

Taiwan officially launched its Asian Asset Management Center initiative in July 2025, granting 38 new services in the dedicated zone in Kaohsiung as part of a broader effort to transform the island into a regional hub for wealth management, private banking, and cross-border investment services.

Although the initiative — described as the largest pilot program in the history of Taiwan's financial supervision — remains in its early stages, authorities have begun citing early metrics as evidence of momentum.

According to the FSC, 57 financial institutions have joined Kaohsiung's dedicated asset management zone within less than a year of operation.

As of the end of March this year, the banking sector's credit financing business, including Lombard lending and premium financing, recorded 2,314 disbursements with an outstanding loan balance of NT$41.7 billion (approximately US$1.32 billion.)

Peng drew a comparison between Taiwan in 1995 and Taiwan today, arguing that the island’s transformation over the past three decades demonstrates why it should no longer underestimate its own financial potential. Taiwan’s benchmark stock index has risen 8.11-fold to 41,934 points, while total market capitalization expanded 26.81 times to NT$136.77 trillion.

TSMC, widely regarded as the crown jewel of Taiwan’s economy, has seen its market value surge nearly fiftyfold, Peng said. The overall scale of Taiwan’s financial-market assets has increased 8.21 times, per capita GDP has tripled to US$39,492, and total assets under management (AUM) have climbed to NT$17.24 trillion.

To illustrate his point, Peng invoked the parable of a young elephant tied by chains from birth. After repeated failed attempts to break free, the elephant eventually stops trying — even once it had grown strong enough to do so.

Taiwan, Peng argued, risks falling into a similar psychological trap. The island has already accumulated far greater economic strength than many people realize, and should not allow outdated assumptions or past limitations to constrain its ambitions.

Peng also pointed to rapid growth in high-net-worth financial activity, noting that multiple domestic banks have established or expanded specialized wealth-management operations targeting affluent clients, while international financial institutions have expressed growing interest in Taiwan’s capital markets and industrial ecosystem.

UBS Taiwan Location Head Henry Su (蘇韋毓), speaking at the same event, said demand for private banking in Taiwan is gowing. He said the island has long had a large number of high-net-worth individuals, and that number is expected to grow.

Su added that in building their wealth, many Taiwanese had not fully grasped the importance of wealth management. Perhaps due to long-term geopolitical factors, many kept assets overseas, held in stable and conservative arrangements. Now, Su stated, Taiwanese are increasingly embracing broader wealth planning and family succession strategies.

According to the FSC, the Asian Asset Management Center initiative is designed not merely to attract offshore funds but to retain Taiwanese wealth that has historically flowed abroad. The commission has also rolled out regulatory adjustments intended to liberalize product offerings, encourage financial innovation, and increase flexibility for private banking operations.

Semiconductors as a financial magnet despite challenges

What differentiates Taiwan from competing financial centers, Peng argued, is the intimate relationship between capital markets and the island’s globally strategic industrial base.

Rather than positioning Taiwan primarily as a low-tax jurisdiction, Peng said that the FSC intends to capitalize on this industrial gravity. Foreign investors, he noted, are increasingly interested not only in Taiwanese equities but in broader exposure to the ecosystem surrounding AI servers, advanced packaging, electronics manufacturing, and semiconductor materials.

In this sense, Taiwan hopes to evolve into a financial platform anchored by tangible industrial competitiveness rather than purely financial engineering.

Peng acknowledged that Taiwan faces challenges in its bid to establish itself as a regional asset-management hub. Tax conditions remain less competitive than those of international rivals, affecting Taiwan’s ability to attract both international capital and financial talent.

Language barriers and a relatively limited international business environment also pose obstacles, particularly in expanding cross-border operations and recruiting globally experienced professionals. Beyond that, Taiwan must contend with foreign-exchange regulations and geopolitical risk.

Yet Peng argued that the island holds advantages few regional competitors can easily replicate. Taiwan’s strengths in semiconductors, ICT, and biotechnology have created a powerful industrial foundation, while substantial private wealth and high savings rate are fueling growing demand for diversified asset allocation and wealth-management services.

He added that Taiwan’s financial professionals have strong technical expertise, while investment momentum among the public has accelerated markedly in recent years alongside rising financial literacy and participation. Coupled with the continued expansion of Asia’s broader asset-management market, Peng said these trends collectively provide Taiwan with a compelling foundation upon which to build its long-term ambitions.

Peng compared this dynamic to capital flowing into difficult but lucrative industries elsewhere in the world. “The global diamond industry also faces complicated mining, technical, and regulatory barriers,” he said. “But when opportunities exist, capital still enters.”

A long-term vision beyond finance

For Peng, the Asian Asset Management Center initiative carries significance beyond economics.

Taiwan’s long-term ambition, he said, is to elevate the reputation of its financial industry to a status comparable to its semiconductor sector. He said that Taiwan is not trying to compete with Singapore, but to offer a complementary presence that opens further investment opportunities.

The FSC chairman said he hopes ordinary Taiwanese citizens may one day take pride in the island’s financial industry much as they do today in TSMC and the chip ecosystem. He pointed to Singapore as an example where even people outside finance often view the nation’s financial sector as a source of collective prestige.

Peng acknowledged that Hong Kong and Singapore took decades to become what they are today, and said he understands that replicating such a reputation and ecosystem takes time. 

Taiwan, Peng said, now hopes to cultivate a similar sense of identity and pride — but through a distinctly Taiwanese formula rooted not merely in capital flows, but in the enduring strength of its real economy.