Asia’s private equity outlook | INDIA｜JAPAN｜TAIWAN｜Law.asia

Experts examine regulatory developments positioning the region’s private equity markets for sustained capital inflows

Opportune time, opportune growth: Private equity in India

For years, India has been spoken of as a market on the brink of extraordinary private equity growth. That promise has now matured into reality. Global investors today view India as a core geography, not a peripheral bet. Policy clarity, market depth, and the willingness of Indian promoters to institutionalise have come together to create an environment that feels active, resilient, and increasingly sophisticated.

Cyril Shroff
Managing Partner
Cyril Amarchand Mangaldas
Mumbai
Tel: +91 22 2496 4455
Email: cyril.shroff@cyrilshroff.com

The face of corporate India has also changed in fundamental ways. What was once dominated by family-owned businesses and multinationals is now defined by private equity as a driving force.

Several factors are driving this shift: India’s infrastructure requirements, a vast consumer base, the expansion of financial services, and succession challenges that are prompting business families to consider exits or to cede operational control.

This is, however, only the starting point. Prime Minister Narendra Modi’s Viksit Bharat vision – a developed India by 2047, with a potential USD30 trillion economy – will demand unprecedented capital deployment.

PE is uniquely placed to play a catalytic role in that journey. It is not only about capital; it is about governance, operational depth, and strategic discipline. As India moves to deliver on this ambition, the scale of opportunity for PE investment is likely to be transformational.

2025 so far

Despite global uncertainties linked to the US elections and tariff actions, India’s PE market entered 2025 on solid ground. There is still significant dry powder, and the first two quarters have seen healthy activity across primary investments, secondaries and exits. Technology, consumer, financial services and healthcare continue to dominate sector allocations, underscoring where investors see long-term value.

New control lever

One clear sign of confidence among PE investors is the rise of platform transactions and control deals. For a long time, India was primarily a minority-investment market. That has shifted decisively. Control and co-control transactions are now centre stage, aided by investor comfort with regulations, a maturing legal framework and promoters who are increasingly willing to institutionalise their businesses.

Sponsors are seeking control positions to build scalable platforms, professionalise companies and execute bolt-on acquisitions. This approach aligns ownership with operational strategy. The growing viability of public market exits has added further momentum. For many global investors, an India allocation is no longer optional; it has become essential.

Regulatory framework

Aditi Manchanda
Partner
Cyril Amarchand Mangaldas
Mumbai
Tel: +91 22 2496 4455
Email: aditi.manchanda@cyrilshroff.com

Regulatory changes have played a crucial enabling role. In the past decade, most foreign investment in sectors has shifted to the automatic route, permitting either 100% foreign investment or automatic approval up to liberalised caps. Most sectors in India now permit 100% foreign direct investment under the automatic route, with only specific sectors requiring government approval for receiving foreign money.

Sensitive areas have also opened up: defence allows up to 74% automatically; space is between 49% and 100%, depending on the sub-sector; and telecom is fully liberalised. Insurance moved from 49% to 74% in 2021, and the government has proposed allowing 100% under specified conditions. This steady liberalisation has given foreign investors predictability and improved confidence in the Indian regulatory environment.

In addition to sectoral openings encouraging foreign investment, many recent targeted reforms will play a key role in how deals are structured and executed by both foreign and domestic investors.

1. 1. Leveraged buyouts. In October 2025, the Reserve Bank of India (RBI) proposed introducing a framework more particularly in the listed space to allow Indian banks to fund acquisitions by domestic corporates. This is a meaningful development and if executed well, it could unlock structures that have historically powered buyout markets elsewhere.
   2. ODI and share swaps. Recent amendments to overseas direct investment (ODI) regulations under the Foreign Exchange Management Act now permit share swaps between residents and non-residents. This gives sponsors more flexibility in structuring inbound and outbound transactions and in reorganising platforms efficiently.
   3. Fast-track mergers. Recent changes to the Companies Act will expand the fast-track route to unlisted companies, holding-subsidiary mergers, and inter-subsidiary combinations. In practice, this simplifies integrations and restructurings – tools that are central to PE investment strategies.
   4. GST 2.0. Reforms announced in September 2025 streamlined tax slabs and reduced rates on more than 375 items. These changes are expected to lift EBITDA (earnings before interest, taxes, depreciation and amortisation) margins by 200 to 300 basis points in several sectors, making Indian businesses more attractive on both operational and valuation grounds.

While regulatory reform has brought increasing ease in regulation from respective regulators, regulators have been focusing more on enforcement, and companies continue to bear the onus of compliance. Regulatory bodies are becoming increasingly sophisticated and harmonised in tracking market activity.

In this context, director liability is a growing concern as directors receive notices. Safe harbour provisions for non-executive directors, as well as director and officer liability insurance, remain important safeguards for director liability protection.

Approvals and timelines

Saloni Shroff
Partner
Cyril Amarchand Mangaldas
Mumbai
Tel: +91 22 2496 4455
Email: saloni.shroff@cyrilshroff.com

Approvals continue to shape transaction timelines, although the landscape is evolving.

The Competition Commission of India (CCI) last year revised its notification thresholds, requiring filings for transactions exceeding INR20 billion (USD227.3 million), and where the target meets the substantial business operations test in India, in addition to the existing asset and turnover-based thresholds.

For matters that are grey areas and require clarity, pre-filing consultations with the CCI are being used more widely. CCI clearances for no-issues notifications are now completed within 30 to 45 days, giving dealmakers greater certainty.

RBI approvals for investments in NBFCs (non-banking financial companies) – change in control or in shareholding of 26% or more – have also become more structured. The applications are now made on a portal created by the RBI called Pravaah Portal.

While the RBI continues to seek detailed information, it has become far more engaged as the frequency of queries has increased. However, timelines have shortened in simpler cases, which is a noticeable shift from earlier years.

Press Note 3 approvals, required for investments from countries sharing a land border with India, initially created a lot of uncertainty. That regime has now stabilised. Several approvals have been granted, especially in the technology sector. The process has become more predictable, and further relaxations are expected soon.

IPO markets

India’s public markets have emerged as a reliable exit route. The Securities and Exchange Board of India (SEBI) has relaxed minimum holding periods for offer-for-sale components involving convertible instruments acquired through reverse flips, and amended promoter contribution rules to allow institutional shareholders to meet the 20% requirement.

In September 2025, the SEBI also proposed lowering the minimum public offer requirements for IPOs of more than INR500 billion, with extended timelines for achieving public shareholding. Collectively, these changes make IPOs faster and more flexible, sitting alongside secondary transactions and continuation fund strategies.

The road ahead

The most striking shift is in attitude. India is no longer seen as a frontier market. Global and domestic investors are now making long-term commitments across mid-market and control deals.

IPOs, secondaries and continuation funds are advancing in parallel, supported by a regulatory framework that, while still evolving, is far more stable and more predictable than it was a decade ago.

Private equity in India is now about maturity, not novelty. Sponsors are moving from observing growth to actively shaping it. The direction of travel is clear: private equity will not just finance India’s growth – it will help define it.

Cyril Amarchand Mangaldas
Peninsula Chambers, Peninsula Corporate Park,
GK Marg, Lower Parel,
Mumbai – 400 013, India.
Tel: +91 22 6660 4455
Email: cam.mumbai@cyrilshroff.com
www.cyrilshroff.com

Back to top

Laws and regulations on private equity funds in Japan

So & Sato Law Offices routinely provides legal advice on the formation of private equity funds and their subsequent investments.

Yuki Sato
Managing Partner
So & Sato Law Offices
Tokyo
Tel: +81 80 7581 0215; +813 6275 6080
Email: y.sato@innovationlaw.jp

The legal regulations surrounding PE funds in Japan can be challenging, and the firm hopes this brief outline will be helpful.

PE funds in Japan handling so-called small-cap and mid-cap deals are now gaining recognition and attention from overseas investors.

This is largely due to Japan’s geopolitical stability, the relatively stable multiples, and the perceived undervaluation of Japan’s domestic M&A deals, particularly targeting small and medium-sized enterprises, suggesting the potential success of such PE funds.

Furthermore, PE funds handling so-called mid-cap and large-cap stocks are strengthening their presence in tender offers and management buyout deals, anticipating changes to the Tokyo Stock Exchange’s listing standards scheduled for 2030.

This article focuses on PE funds with investors who are primarily Japanese institutional investors, with some participation from overseas institutional investors or family offices.

Legal structure

Investment funds can be classified based on their investment targets, legal structure, jurisdiction of establishment (governing law), categories of investors, and other factors.

PE funds are typically structured as closed-end, partnership-type funds. Under Japanese law, they are often organised as investment limited liability partnerships (toushi jigyo yugen sekinin kumiai) under the Law Concerning Investment Limited Liability Partnerships (LPS Act).

If a certain number of investors are based overseas, parallel funds are often established as limited partnerships in tax haven jurisdictions such as the Cayman Islands.

Legal regulations

Chiho Saito
Attorney at Law
So & Sato Law Offices Tokyo
Tel: +81 80 4920 2119; +813 6275 6080
Email: chiho.saito@innovationlaw.jp

Financial Instruments and Exchange Act (FIEA). Theoretically, a general partner (GP) of a PE fund is required to be registered as:

1. 1. A type II financial instruments business operator to conduct the private placements of partnership interests in Japan; and
   2. An investment manager to manage funds and other assets contributed by investor partners, primarily through investments in securities.

However, it may not be practical for many fund managers, including Emerging Managers Programmes (EMPs), to meet the registration requirements, such as hiring personnel (including a compliance officer) with the necessary knowledge and experience, and meeting capital requirements.

Therefore, most GPs rely on an exemption called the Specially Permitted Business for Qualified Institutional Investors, etc. (SPSQII). The SPSQII allows the GP to conduct the business described in the “subject activities” and “categories of permissible investors” sections below, with only a notification. Below is an overview of the SPSQII.

1. 1. Subject activities. Under the SPSQII exemption, the GPs may conduct the following activities:
      1. Private placement of fund interests to one or more qualified institutional investors (QIIs) and up to 49 investors meeting certain requirements (SPS investors).
      2. The management of funds or other assets contributed by the above-mentioned investors, primarily as investments in securities.
   2. Categories of permissible investors. The QII refers to natural and legal persons, such as registered securities companies, banks and insurance companies, or those who have a portfolio of securities worth at least JPY10 billion (USD65 million) and have filed a notification to be treated as a QII.
      1. SPS investors include listed companies, corporations with capital or net assets of JPY50 million or more, and foreign corporations.
      2. At least one qualified institutional investor is required when conducting the SPSQII.
   3. Notification. Before commencing an SPSQII, a notification must be filed with the relevant finance bureau in advance (specifically, before the investor first acquires the relevant fund interest).
      1. If any changes occur in the matters set out in the notification, the SPSQII notifier must provide notice of each change without delay (in practice, within one month).
   4. Regulation on its conduct. Please note that although the SPSQII operator is not a licensed or registered financial institution under the FIEA, it must comply with certain regulations, such as those concerning the handling of conflicts of interest and the provision of explanatory documents that comply with the FIEA.

Taiki Hashimoto
Attorney at Law
So & Sato Law Offices
Tokyo
Tel: +81 80 3528 6169; +813 6275 6080
Email: t.hashimoto@innovationlaw.jp

Act on Prevention of the Transfer of Criminal Proceeds. When the GPs of PE funds engage in the solicitation of their fund interests or management of the funds, they are required to conduct certain “know your customer” (KYC) processes and due diligence about their limited partners (LPs).

Each due diligence process includes verifying customer information, such as identity and purpose of the transaction, as well as beneficial ownership.

Limited Partnership Act for Investment (LPS Act). A limited partnership (LPS) under the Limited Partnership Act for Investment is commonly used for domestic partnership-type funds in Japan. The LPS is similar to limited partnerships in other jurisdictions.

However, the business activities in which the LPS may engage are limited to those specified in the LPS Act, including the acquisition and holding of shares and warrants issued by corporations, the acquisition and holding of certain securities such as corporate bonds, and investments in partnerships.

Furthermore, the acquisition and holding of shares, warrants, etc., issued by foreign corporations shall be limited to less than 50% of the total capital contribution of all partners.

Foreign Exchange and Foreign Trade Act (when foreign LPs participate). When overseas investors participate in a PE fund as limited partners, certain procedures may be required under the Foreign Exchange and Foreign Trade Act (FEFTA).

Under the FEFTA, PE funds that have foreign investors (non-residents or foreign corporations) as their LPs may be required to file:

1. 1. A pre-transactional notification and subsequent reporting; or at least
   2. A post-transactional notification.

PE funds in which 50% or more of the capital is held by foreign investors also fall under the category of “foreign investors”, and are subject to these reporting requirements.

Whether a pre-transactional notification (or a post-transactional notification) is required depends on the business conducted by the investee company when such PE funds make investments.

Following recent amendments to the FEFTA and its administrative rules concerning foreign direct investments, various types of business, such as software services, have been broadly designated. Thus, the process should be carefully monitored to ensure that the pre-transactional notification has been filed.

Antitrust Law. Finally, if a “roll-up strategy” (a strategy of consecutively acquiring and integrating competitors) is involved, it may be subject to merger review by the Japan Fair Trade Commission once it exceeds a certain market share threshold.

The Japanese private equity fund market is expected to remain robust. As a result, legal issues and risks are anticipated to become more complex and sophisticated.

So & Sato Law Offices
Marunouchi Office
937, 9th floor, New International Building,
3-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005
Tel: +813 6275 6080
Email: y.sato@innovationlaw.jp
www.innovationlaw.jp

Back to top

Evolution of private equity in Taiwan

Taiwan’s private equity market has evolved considerably in the past two decades. Prior to the 2008 global financial crisis, international PE funds were active market players in Taiwan, participating in deals across sectors such as banking and cable television – examples include the acquisition of Entie Commercial Bank, Cosmos Bank and Ta Chong Commercial Bank.

James Hsiao
Senior Partner
Dentons
Taipei
Tel: +886 2 2702 0208 ext. 206
Email: james.hsiao@dentons.com.tw

Following the financial crisis, however, most international PE funds scaled back their exposure in Asia, and Taiwan’s PE market entered a period of gradual recovery. Early post-crisis attempts by international PE funds – such as the proposed takeovers of semiconductor company ASE Group and electronics manufacturer Yageo Corporation – faced regulatory resistance, primarily due to concerns over privatisation and the potential loss of domestic control.

This conservative stance began to ease around 2018, when landmark transactions such as investment firm KKR’s acquisition of LCY Chemical and finance firm Morgan Stanley’s investment in Microlife Corp successfully obtained regulatory approvals. These approvals reflected a more pragmatic and open regulatory approach, enhancing Taiwan’s appeal as a destination for private equity investment.

Meanwhile, government initiatives and supportive policies have spurred the growth and diversification of domestic PE activities. A growing number of local private equity funds have been established, creating a more dynamic and mature investment ecosystem. Today, Taiwan’s PE landscape encompasses a wide range of fund types, including:

1. 1. Independent funds such as Taiwania Capital, MagiCap Venture Capital, Phi Capital and KHL Capital, formed by influential industry figures with strong fundraising networks;
   2. Industrial funds including ABICO Group and CDIB-Innolux Fund, which focus on supply-chain investments and often integrate with their group companies’ business and operations;
   3. Securities-affiliated funds such as Fubon and Taishin, offering vertically integrated financial services;
   4. Investment trust-based funds such as Cathay and Fuh-Hwa; and
   5. Financial holding company funds such as CDIB, leveraging institutional capital and group synergies.

Apart from the government’s support, the insurance sector – most notably life insurance companies – constitutes the principal channel of private capital, offering long-term investment resources that play a pivotal role in supporting Taiwan’s private equity market.

Legislative effort

Iting Huang
Associate
Dentons
Taipei
Tel: +886 2 2702 0208 ext. 209
Email: iting.huang@dentons.com.tw

In June 2021, the National Development Council (NDC) introduced the Guidelines for Private Equity Fund Participation in Industrial Development, aiming to facilitate private equity participation in Taiwan’s strategic sectors. The PE guidelines were designed to encourage professional fund management and expand access to institutional capital, including from the life insurance companies, by establishing qualification thresholds and defining strategic investment areas.

Under the PE guidelines, a qualified private equity fund must have a minimum committed capital of TWD1 billion (USD32.7 million) and be managed by at least three professionals with demonstrated expertise in investment management, target evaluation and post-investment oversight.

In addition to these baseline requirements, funds that meet specific criteria may apply to the NDC for a qualification letter, enabling access to institutional capital, including life insurance funds.

The qualifying standards include:

1. 1. Investor commitments representing at least 20% of the fund’s total committed capital;
   2. A management team with relevant fund management experience;
   3. A fundraising plan aligned with “significant strategic industries”;
   4. A robust investment process supported by an internal review mechanism; and
   5. A sound post-investment risk management framework.

The NDC defines “significant strategic industries” broadly to encompass digital services, information security, precision health, defence and strategic industries, green energy, biotechnology, intelligent machinery, recycling and circular economy, and modern agriculture.

It also includes forward looking infrastructure projects, private participation in public construction, industries requiring transformation or upgrading, and other sectors recognised by relevant authorities as aligned with national policy objectives.

The introduction of the PE guidelines marked the beginning of a more transparent and professional regulatory environment for private equity operations in Taiwan. Although not legally binding, the PE guidelines have become an important reference framework for Taiwan-registered private equity funds.

This framework was further reinforced in 2023 with the establishment of the Taiwan Private Equity Association (TPEA), comprising PE firms, securities firms, investment trusts and venture capital funds.

The TPEA seeks to strengthen Taiwan’s private equity ecosystem and enhance industry cohesion. It has also published the Self-Regulatory Guidelines Competing for and Acquiring Insurance Funds to promote consistent standards and best practices among market participants.

Most recently, in March 2025, the Financial Supervisory Commission relaxed restrictions on insurance companies’ private equity investments. Insurance companies are now permitted to invest not only in projects linked to Taiwan’s core strategic industries but also in funds supporting public infrastructure, ESG initiatives and social welfare enterprises. This policy shift aims to mobilise large-scale institutional capital and further accelerate Taiwan’s economic modernisation.

International market dynamics

Since 2023, Taiwan’s private equity activity has slowed amid global finanicial uncertainty. In 2025, tariff-related risks and weaker cross-border sentiment further dampened deal flow. The slowdown mirrors a broader retreat of international PE investors from the Greater China region due to geopolitical tensions and global economic headwinds.

Despite these challenges, a new generation of PE professionals, many with global fund experience, has begun establishing independent funds. However, these emerging funds continue to face significant fundraising challenges, particularly from domestic institutional investors in Taiwan such as insurance companies, due to stringent regulatory requirements.

Under the Regulations Governing Foreign Investments by Insurance Companies, Taiwan’s insurance firms may only invest in privately offered funds managed by institutions that meet qualification criteria.

Eligible institutions must:

1. 1. hold a sovereign credit rating of at least A+ or its equivalent from foreign credit rating agencies; and
   2. be registered in competent authorities of countries that are signatories to the International Organisation of Securities Commissions’ multilateral memorandum of understanding.

Except under limited circumstances, these fund management institutions must also have a minimum of five years of experience in fund management, and maintain assets under management of not less than USD500 million or its equivalent.

While these requirements are intended to safeguard policyholder interests, they also limit the flow of domestic institutional capital into emerging PE funds.

Given that life insurance companies remain the principal source of private equity capital in Taiwan, the future success of these new managers in Taiwan’s private equity market will depend on how forthcoming regulatory developments balance investor protection with market innovation and growth.

Local market trends

In recent years, Taiwan’s domestic private equity landscape has undergone a strategic transformation towards diversification and policy-aligned investments. While traditional buyouts remain part of the landscape, local funds are increasingly channelling capital into sustainability-focused sectors such as renewable energy, green technology, automotive and electric vehicles, and infrastructure.

The growing focus on healthcare, biotechnology and AI-related infrastructure also reflects Taiwan’s strategic alignment with global technological advancement and ESG-driven investment trends.

Automotive and electric vehicles. Industry-focused partnerships have become an emerging feature of Taiwan’s PE market. A notable example is CDIB Capital’s collaboration with Innolux in 2021 to establish the CDIB-Innolux Fund. Building on its initial success, a second fund was launched in 2024, with a scale of TWD3.3 billion, targeting investment in automotive and display-related technologies.

Similarly, Phi Capital leveraged its expertise in Taiwan’s electronics sector to connect local industrial capabilities with the global automotive supply chain, co-investing with Universal Scientific Industrial in the acquisition of Hirschmann Car Communication in 2023.

However, by 2025, heightened tariff risks and Taiwan’s continued reliance on cross-border manufacturing networks have tempered investment in automotive-related assets, leading to more cautious investment sentiment within the sector.

Renewable energy and green transition. The energy transition has also emerged as a major theme shaping Taiwan’s private equity market. Supported by government initiatives promoting capital diversification and the global movement towards net-zero emissions, leading investment trusts have launched renewable and infrastructure funds focused on the clean energy value chain.

For instance, Cathay Securities Investment Trust and First Securities Investment Trust have each established funds targeting renewable energy and offshore wind infrastructure projects.

The outlook

Strategic partnerships between corporations and private equity funds – whether through vertical integration within supply chains, or cross-sector collaborations – are expected to play a pivotal role in accelerating Taiwan’s industrial consolidation and transformation. Such co-operation can enhance corporate competitiveness, strengthen market positioning, and facilitate the scaling of innovation across key industries.

Looking ahead, closer co-ordination among regulators, industry participants and professional associations will be essential to building a robust and transparent private equity ecosystem.

A balanced regulatory framework – one that preserves prudential safeguards while broadening capital access for emerging funds – will be critical to sustaining Taiwan’s long-term market growth and global competitiveness.

Dentons
3F, No. 77, Section 2, Dunhua South Road
Taipei, Taiwan
Tel: +886 2 2702 0208
Email: james.hsiao@dentons.com.tw
www.dentons.tw

Back to top