TAIWAN Law and Practice Contributed by: Derrick Yang, Judy Lo and Yu-Ting Su, Lee and Li Attorneys-at-Law
Lee and Li Attorneys-at-Law 8F, No. 555, Sec. 4 Zhongxiao E. Rd. Taipei 11072 Taiwan, R.O.C.
Tel: +886-2-2763-8000 Fax: +886-2-2766-5566 Email: attorneys@leeandli.com Web: leeandli.com/EN
1. Trends 1.1 Regulatory and Enforcement Environment There have been no recent significant changes regard - ing Taiwan’s regulatory processes for merger control and FDI (including national security screenings), which generally remain consistent with prior practice. Due to the significant number of mergers and acquisitions involving financial institutions last year, the importance of obtaining sectoral regulatory approvals has greatly enhanced to ensure compliance with industry-specific rules and to maintain market stability. Most M&A-relat - ed litigation centres on disputes concerning defects in resolutions of shareholders’ or board of directors’ meetings, conflicts of interest involving directors, and the reasonableness of the transaction price. 1.2 Key Trends With a surge in M&A deals in financial industry, the Financial Supervisory Commission (FSC) has updated its regulations to tighten merger guidelines and safe - guard market stability. This revision, spurred by the contentious 2025 bid by two financial holding compa - nies for a single target, is seen as an effort to overhaul the long-standing rules to enhance transparency and market stability. In addition, in response to the growth of outbound investments from Taiwan, a 2025 amendment to the Industrial Innovation Act requires prior approval from the relevant authority for overseas acquisitions in spe - cific countries or regions that involve critical national industries or technologies, or that reach a certain threshold amount.
1.3 Key Industries The financial industry was most affected by sectoral regulatory approvals and the competent authority’s stance, driven by a surge in industry consolidation in 2025. The FSC introduced significant amendments to the Financial Holding Company Investment Man - agement Regulations in late 2025, providing clearer guidance for financial holding companies engaging in M&A activities. The key highlights of these regulatory updates include: • Financial holding companies must use cash for initial investments in public companies to minimise stock price volatility. • The initial investment must secure at least a 25% stake in the target company. • The acquirer must submit a reasonable and feasi - ble plan outlining the initial investment strategy. • A period for DLR adjustments has been introduced to better align with market practices. • Decisions by the board must be supported by opinions from the audit committee and independ - ent experts. • Details of tender offers must remain confidential until regulatory approval is obtained, in order to prevent market disruption. • An applicant whose investment application is rejected cannot apply to invest in the same target for one year.
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