TAIWAN Trends and Developments Contributed by: Weita Liao, Denise Jen, Arthur Chang and Peter Chen, LCS & Partners
of US products between 2026 and 2030. In exchange, the US government capped reciprocal tariffs on Tai - wanese goods at 15% and provided specific exemp - tions for critical high-tech components. However, the legal landscape remains complex, as the US Supreme Court ruled in February 2026 that the use of the Inter - national Emergency Economic Powers Act (IEEPA) for such tariffs was unconstitutional. Development of the Regulatory Landscape for M&A Regulations on foreign investors Recent development For decades, the general regulatory framework of foreign investment in Taiwan has not changed much. Foreign investors are required to obtain foreign invest - ment approval from the Department of Investment Review prior to investing in or acquiring a Taiwanese company. Foreign investment is welcomed in Taiwan, except in a limited number of industries where it is restricted or prohibited for national security reasons, such as military industries, telecommunications, media and certain transportation sectors. In the past, formal communication with the Depart - ment of Investment Review or other regulatory author - ities regarding foreign investment reviews could only commence after investors officially submitted their applications. For investment cases involving complex regulatory issues, it was often challenging to obtain clear responses before the formal submission, cre - ating uncertainty for foreign investors when planning investments or negotiating M&A terms with counter - parties. To address this issue, starting 23 December 2024, the Department of Investment Review intro - duced the “Pre-Review Trial Mechanism for Foreign Investment Applications”. This initiative aims to accel - erate the review process and foster a more convenient investment environment. Under the new mechanism, cross-border M&A applications, foreign investments exceeding TWD100 million, and applications requiring clarification on procedures or regulatory requirements may apply for pre-review and consultation with the Pre-Review Office of the Department of Investment Review before formal submission. The office will assist by discussing and conducting preliminary reviews of the investment plans with applicants and, if necessary, arranging inter-ministerial discussions. Pre-review
opinions will be provided to help clarify key issues and streamline the overall investment process. Anticipated material changes in the near future Although the general regulatory framework of for - eign investment in Taiwan has not changed much in the past decades, an amendment to the “Statute for Investment by Foreign Nationals” is currently being proposed by the Executive Yuan and being reviewed by Taiwan’s Congress. The proposed amendment will dramatically change the regulatory landscape of for - eign investment in Taiwan. One of the biggest changes is that, in the future, a pre-approval of foreign invest - ment will only be required in certain cases. That is, most foreign investments below a certain threshold will not require any prior approval from the Depart - ment of Investment Review, replaced by an after-the- fact report to the Department of Investment Review, which is contrary to the current regulations requiring every foreign investment case to obtain prior approval. However, the amendment is still under review by Con- gress, and the prospects of legislation are difficult to predict. Regulations on PRC investors Recent development Taiwan generally offers an open and welcoming envi - ronment for foreign investors but investors from the PRC face a different set of regulations. Although some economic and cultural interactions and relationships have been established between Taiwan and the PRC in the last few decades, the confrontation between the governments of Taiwan and the PRC has reached a new record high in the past few years due to the international situation. Due in large part to these ten - sions, and for a variety of strategic reasons, Taiwan has imposed strict restrictions on PRC investors. Generally, PRC investors are required to apply for approval before engaging in investment activities in Taiwan. PRC investors are only allowed to invest in a Taiwanese company if the investment is consist - ent with the restrictions and limitations on Taiwan’s “white list” for investment from the PRC. In addition, the Department of Investment Review may put restric - tions on PRC investors who have a military back - ground, hold political positions or are part of the Chi - nese Communist Party. The Department of Investment
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