TAIWAN Law and Practice Contributed by: Lihuei Mao (Grace), Dennis Yu and Christina Chiang, Lee and Li, Attorneys-at-Law
1. Trends 1.1 VC Market
1.2 Key Trends The expectation is that in 2025, the venture capi - tal markets in Taiwan will still be strongly influ - enced by government-supported initiatives that promote start-up and innovation. Some of these initiatives include: • the continuing promotion of listing on the Taiwan Innovation Board (TIB) by the TWSE since July 2021, with a related relaxation of limitations/qualifications for doing so; • TWSE’s lifting of the restriction regarding qualified investors who meet certain criteria relating to trading experience and financial stability since 6 January 2025 allowing all investors to trade the stocks registered on the TIB; • the lifting of certain restrictions on Taiwanese insurance companies’ investment in private equity funds and venture capital funds; and • new investment opportunities related to the booming of artificial intelligence and semicon - ductors and the growing use of sustainable energy, both domestically and internationally. As VC investment in Taiwan continues to thrive in the midst of the global downturn, there is no significant change in deal term observed in Tai - wan, while venture capitalists do tend to invest a smaller amount per deal or make investments in start-ups in installments. 1.3 Key Industries With the relaxation by the National Development Council (NDC) of the restrictions on insurance companies’ investment in onshore private equity funds and venture capital funds, especially in the infrastructure sectors, it is anticipated that Taiwanese insurance companies will invest in industries designated by the Financial Supervi - sory Commission (FSC), as permitted industries to be invested in by onshore private equity funds
Despite the downturn that was expected for the end of 2022 and early 2023 and a subdued market for VC investments globally in 2024, according to a StartBlink 2024 Report, Taiwan’s start-up ecosystem thrived and experienced an increase in 2023 and 2024 and became the top 22nd start-up ecosystem in 2024, advancing two places from 24th in 2023. The growth can be credited to various factors, such as start-up friendly government programmes, the increased investment in start-ups by the National Develop - ment Fund (NDF), the continuing promotion of IPO platforms for start-ups by the Taiwan Stock Exchange (TWSE), active participation and fund - ing from corporate venture capital funds (CVCs) and the continued thriving of the AI and semicon - ductor industries. There was significant growth in the number of IPOs (67 companies) and the IPO proceeds (TWD57.6 billion (around USD192 million)) in 2024 as compared to 2023 (45 IPO companies with IPO proceeds of TWD37.9 bil - lion (around USD126 million). One of the most notable events was the listing of Diamond Biofund Inc. on the Main Board of the TWSE in 2023, which is the very first listing of a large-scale, sustainable, biotech venture capital fund specialising in biotechnology and medical investments, with focused areas in companies engaging in new drug research and develop - ment, high-end medical equipment, innovative medical service technology, medical channels, and agricultural biotechnology, etc. Diamond Biofund Inc. has incubated and invested in more than 20 entrepreneurs and companies domesti - cally, regionally and globally.
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