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:
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- Independent funds such as Taiwania Capital, MagiCap Venture Capital, Phi Capital and KHL Capital, formed by influential industry figures with strong fundraising networks;
- 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;
- Securities-affiliated funds such as Fubon and Taishin, offering vertically integrated financial services;
- Investment trust-based funds such as Cathay and Fuh-Hwa; and
- 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:
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- Investor commitments representing at least 20% of the fund’s total committed capital;
- A management team with relevant fund management experience;
- A fundraising plan aligned with “significant strategic industries”;
- A robust investment process supported by an internal review mechanism; and
- 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:
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- Hold a sovereign credit rating of at least A+ or its equivalent from foreign credit rating agencies; and
- 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
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Taipei, Taiwan
Tel: +886 2 2702 0208
Email: james.hsiao@dentons.com.tw
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