TAIWAN Trends and Developments Contributed by: Lihuei Mao (Grace), Dennis Yu and Christina Chiang, Lee and Li, Attorneys-at-Law
In 2025, it is expected that the venture capital markets in Taiwan will remain heavily driven by the momentum generated by the government’s initiatives to promote start-ups and innovation, as well as the new investment and business oppor - tunities motivated by the government’s policy to encourage and develop sustainable energy. The launch of the Taiwan Innovation Board (TIB) by the Taiwan Stock Exchange (TWSE) in July 2021 and the Continuing Reform in 2025 TWSE’s launch of TIB for clustering innovative listings is a major milestone that aims to cre - ate more fundraising opportunities for innova - tive businesses in the capital market. Under the rules of the TIB, start-ups in designated core and strategic industries or innovative industries can be exempted from certain mandatory listing prerequisites for the main board. During the first few years after the launch, stocks registered on the TIB can only by traded by qualified inves - tors who meet certain criteria relating to trading experience and financial stability, but the TWSE lifted such restriction regarding qualified inves - tors and allows all investors to trade stocks reg - istered on the TIB starting from 6 January 2025 in order to promote fund accessibility for com - panies registered on the TIB. The registration requirements of the TIB are more flexible than those of the main board and are more start-up-oriented, for example: • companies meeting all other requirements can apply for listing on the TIB two years after incorporation (as compared to the three-year requirement of the main board), which expe - dites the time for start-ups to gain funds from the capital market; and • considering innovative start-ups, especially in the energy and biotechnology sectors, take
longer to become profitable, a start-up may be eligible to apply for listing on the TIB while operating at a loss, as long as its valuation and working capital meet certain require - ments (as compared to the profit require - ments of the main board). Since the launch of the TIB until the end of 2024, 30 companies have applied to be registered on the TIB. Out of those, 20 have successfully been registered and publicly traded with a total annual turnover of TWD24.96 billion in 2024. The Emergence of Green Energy-Focused VCs Under the Global Surge of Renewable Energy The Taiwan government aims to retire all nuclear power plants by 2025 and has taken steps to support the development of renewable energy. Reports show that the average annual growth rate of renewable energy power generation from 2019 to 2023 reached 14%, which is higher than the global average. In 2024, renewable energy power accounted for 11.6% of the total power gener - ated in Taiwan, which reached a historical high. This increasing demand for renewable ener - gy has led to various business opportunities throughout the green energy supply chain. Many financial institutions have formed their own ven - ture capital funds that focus on green energy- related business, including start-ups. In 2023, Grinnodot, the parent company of Sun - nyfounder, a renewable energy-based electricity retailer, together with Cathay Securities, issued the first Security Token Offering (STO) in Tai - wan, Sunshine Green Benefit Debt STO. This was made possible due to the enactment of a special law on STO that enables Grinnodot and Sunnyfounder to reach a wider pool of potential qualified investors in the capital market. STO is a
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