(Jan 29): Taiwan’s financial regulator is exploring tax incentives for family offices and expanding private banking services as part of its efforts to build up its wealth and asset management industry.
The Financial Supervisory Commission (FSC) on Thursday said it will look at potential tax incentives to enhance Taiwan’s competitiveness and meet with financial institutions to help banks establish institutional family office services. It’s also considering rolling out some of the most popular private banking operations piloted in the city Kaohsiung such as Lombard lending to other parts of the island.
“In developing family offices, we are mindful of regional competition and potential tax issues,” Tong Chen-chang, the FSC’s Banking Bureau head, said at a press conference in Taipei on Thursday. “We will explore possible tax incentives through workshops with the industry.”
Taiwanese regulators have pledged to strengthen the local finance sector on top of its dominance in advanced semiconductor production to build buffers amid rising geopolitical pressure from China. It faces stiff competition from Asian rivals such as Hong Kong and Singapore, both long-established wealth hubs.
“Whenever people talk about Taiwan, they often mention geopolitical risk,” said FSC chairman Peng Jin-Lung. “As our financial market becomes increasingly connected with the international community, our resilience will continue to grow.”
Since 2024, total assets under management in Taiwan’s financial industry have grown by NT$4.95 trillion, according to a statement released on Thursday.
See also: China tightens cross-border investment programme after demand surges
The FSC is also steering the island’s US$1 trillion life insurance sector through a critical period of change, as the industry adopts a new accounting framework this year that imposes stricter capital requirements but also eases hedging requirements.
The insurers have been battered by market headwinds in recent years, including by the Taiwan dollar’s sharp appreciation in 2025. The sector holds more than US$700 billion in foreign assets, raising the currency risk for companies as they pay out to policy holders mainly in Taiwan dollars.
Regulators recently overhauled accounting rules to ease the requirement to immediately reflect currency fluctuations on financial statements, reducing the need for insurers to spend billions on hedging costs. The approach provides insurers with much-needed relief, but has also sparked debate over the appropriateness of such a shift.
See also: Chinese regions cut GDP goals in sign nationwide target may drop
Regulators defended the changes and see little impact on Taiwan’s currency.
“Even the soundest policy will inevitably face questions and discussions, and scepticism tends to arise from a lack of information,” said Peng, “International observers might not easily access all the details on Taiwan, leading them to speculate or make inferences based on their expertise or standpoint.”
Local insurers have largely unwound their hedge positions in non-deliverable forwards and proxies, and will gradually cut the onshore hedges, said Wang Li-hui, head of the Insurance Bureau. The unwinding activity in the offshore markets will not affect Taiwan dollar’s spot rate, she said.
Uploaded by Felyx Teoh
