As legal counsel experienced in assisting foreign investors with investments, acquisitions, and company formations in Taiwan, we have seen the government actively promote related policy initiatives such as the “Asia Asset Management Center”. These initiatives reflect a clear and positive policy direction. However, when foreign capital reaches the practical execution stage — particularly bank account opening and fund remittance — gaps remain between institutional design and front-line banking practice. These gaps affect the predictability of transaction timelines and the efficiency of foreign investment projects. They also deserve closer review by both the competent authorities and financial institutions.
The Practical Account-Opening Bottleneck
In many foreign investment structures, a foreign investor will establish or acquire a Taiwan company and appoint a foreign national residing outside Taiwan to serve as the company’s responsible person. In many cases, that individual does not yet hold an Alien Resident Certificate (“ARC”) issued by Taiwan. This often creates difficulty when the company needs to open a corporate bank account. As a practical matter, whether a bank account can be opened on schedule often serves as a precondition for the remittance of investment capital, the completion of capital verification by a certified public accountant, and the timely progression of company registration.
Regulatory Flexibility and Bank-Level Practice
Under prevailing market practices, even where a company has already obtained foreign investment approval from the Department of Investment Review under the Ministry of Economic Affairs (the “DIR”), most commercial banks still tend to require the company’s responsible person to present a valid ARC before accepting an account-opening application for a preparatory office or corporate account. Although the Financial Supervisory Commission (the “FSC”) has permitted the use of a foreign passport together with a Unified Certificate Number and other documentation as alternative forms of identification, adoption of this approach at the branch level remains limited in practice. Some banks, even where they formally accept the Unified Certificate Number, may still — through procedural design, supplementary document requests, or variations in internal control standards — significantly prolong the account-opening process, thereby undermining the convenience that the regulatory flexibility was originally intended to achieve.
Moreover, even where identity documentation requirements have been satisfied to the bank’s standards, the account-opening process must still clear anti-money laundering (“AML”) and know-your-customer (“KYC”) compliance reviews. In certain scenarios, banks may also conduct on-site inspections. For the transaction cadence typical of foreign investment cases, the absence of consistent and predictable review benchmarks often renders overall timeline management considerably more difficult.
Impact on Foreign Investment Transactions
The impact of the foregoing is particularly pronounced for multinational enterprises. The decision-making and management teams of such entities typically reside in international financial centers on a long-term basis and do not necessarily hold Taiwan ARCs. Once a company is unable to complete account opening on schedule due to the responsible person’s identity documentation or a bank’s internal control standards, the downstream consequences may include the inability to remit investment capital, delays in the CPA’s capital verification report, and ultimately the postponement of company registration and satisfaction of closing conditions. In the context of M&A transactions, uncertainty surrounding bank account opening further increases the risk and coordination costs associated with transaction completion timing, diminishing Taiwan’s competitiveness relative to the broader region in attracting international capital.
Beyond the ARC requirement, we also commonly observe certain commercial banks requiring, as a matter of internal risk management policy, that a foreign responsible person first open a personal account and maintain a track record of banking activity for a prescribed period (e.g., six to twelve months) before accepting a corporate account application. Such operational thresholds are largely extensions of individual banks’ internal control policies. Where they lack clear, verifiable, and risk-proportionate justification, they tend to create additional institutional friction costs in foreign investment cases.
From the perspective of multinational corporate governance practice, non-resident individuals designated to serve as directors or responsible persons of Taiwan subsidiaries typically do so on behalf of the corporate group in fulfillment of management and fiduciary duties — not primarily for the purpose of meeting local personal banking needs. Accordingly, requiring such individuals to “first establish a personal banking history over a specified period” as a prerequisite to opening a corporate account may not effectively reflect the enterprise’s substantive risk profile and may compel investors to adopt alternative arrangements that are less consistent with transactional efficiency.
Toward a Clearer, Risk-Based Framework
By contrast, banking practices in certain international financial centers (such as Singapore and Hong Kong) have more commonly adopted “digital-first” processes paired with risk-oriented assessments, focusing the review on the legitimacy of the corporate entity, its substantive operations, and the flow of funds — rather than over-relying on whether the applicant holds local residency documentation or possesses an existing personal banking history. Such approaches, while maintaining regulatory compliance, also serve to enhance account-opening efficiency and predictability, and are worthy of further reference by Taiwan at both the institutional and operational levels.
Drawing upon the foregoing practical observations, if the objective is to enhance the predictability of foreign investment cases and accelerate the infusion of compliant capital, we would encourage the competent authorities to issue more specific, operationally actionable, and binding guidance and FAQs for financial institutions regarding identity verification of non-resident responsible persons and the acceptance of corporate account-opening applications — including differentiated review items and timeline expectations for high-risk versus ordinary-risk cases. Through a standardized review logic, it would be possible to guide operational focus away from “formalistic checking of a single identity document” and toward “professional judgment regarding the substantive commercial legitimacy and risk profile of the enterprise.”
In our view, only when institutional design and front-line execution improve in tandem — replacing unnecessary formalistic thresholds with a consistent, transparent, and risk-proportionate review framework — can the uncertainty associated with foreign capital landing in Taiwan be meaningfully reduced, thereby substantively enhancing Taiwan’s attractiveness as a regional hub for capital and investment.
This article was written by Gregory Buxton and Megan Chiu.
If you would like to learn more about laws and regulations and other matters related to this article, please feel free to contact us at gbuxton@winklerpartners.com and mchiu@winklerpartners.com.