Taiwan’s big ambitions

Taiwan takes bold steps to become an Asian asset management centre

Taiwan is the latest jurisdiction after Japan vying to become a leading Asian asset management centre. Policymakers are seeking to leverage robust economic fundamentals, burgeoning wealth and technology prowess to carve out a unique role for Taiwan in the competitive asset management landscape.

Assets under management on the island have grown more than 50% since 2020, reaching NT$33.88 trillion (US$1.1 trillion) in March this year, driven largely by retail mutual funds, discretionary accounts, and life insurance investments. Notably, exchange-traded funds have shown strong momentum.

A year ago, the Financial Supervisory Commission (FSC) launched the initiative to position Taiwan as an Asian asset management centre, aiming to nearly double assets to NT$60 trillion by 2030, supported by a comprehensive package of regulatory reforms and incentives designed to foster growth and innovation.

The key factor underpinning the goal is a strong wealth base anchored by substantial household savings, alongside a robust industrial economy led by the semiconductor sector, which accounts for nearly 70% of global chip production.

Yen-Liang Chen, vice chairperson of the FSC, told Asia Asset Management in an interview in February that the government’s move is not a zero-sum game between Asian hubs. “We’re not talking about competing with the status of financial hubs like Hong Kong and Singapore. Taiwan has its own competitive edge with strong local industrial and economic fundamentals,” he said.

According to Chen, Taiwan’s economic strength generates reliable liquidity and creates investment products tied to its thriving technology-driven landscape. In addition, the rising wealth of its growing affluent class spurs demand for sophisticated asset management services.

Harnessing wealth

FSC data shows that households have about NT$20 trillion in financial assets. Most of that money is parked abroad in overseas bonds, foreign equities or other international investment instruments.

The goal to become an asset management centre focuses on promoting the domestic financial industry and encouraging the Taiwanese to invest in locally managed products. The FSC has committed to relaxing more than 30 operational constraints by the end of this year, facilitating easier market entry and broadening the range of approved investment products and services.

One of the central planks of the goal is the launch of the Taiwan Individual Savings Accounts (TISA). Modelled after Japan’s successful Nippon Individual Savings Accounts, the scheme offers tax benefits and discounted fees to motivate individuals to shift their savings into investment products.

With a population of around 24 million, Taiwan has total estimated household savings of about NT$103 trillion, including the NT$20 trillion in financial assets. Much of the savings is held in low-yield bank deposits.

The government is also easing entry barriers for private banking licences to encourage more lenders to offer wealth management services and attract local high-net worth individuals to invest domestically rather than abroad.

The flagship project in the goal to become an asset management centre is the Kaohsiung financial hub model. This is an offshore trial zone that integrates physical and virtual clusters, combining domestic institutions, offshore units, private banks, and family offices into a cohesive financial ecosystem designed to attract capital through regulatory flexibility and local government incentives.

If successful, Kaohsiung could serve as a blueprint for similar specialised financial zones in other Taiwanese cities, creating a network that bolsters the island's overall asset management infrastructure and capabilities.

Cross-listing ETFs

Taiwan’s government has collaborated with asset managers to approve new products, including actively managed ETFs and multi-asset ETFs, broadening investor choice and enhancing market sophistication.

Last December, Taiwan reached an agreement with Japan to allow ETFs from both jurisdictions to cross-list on each other's exchanges, with the first listing anticipated before the end of this year. Japan and Taiwan are the largest and third-largest ETF markets in Asia, with assets of $558 billion and $197 billion, respectively. The collaboration is expected to deepen investor choice and attractiveness of both markets.

The move to position Taiwan as an asset management centre has shown momentum. The NT$33.88 trillion managed on the island as of March 2025 represents an increase of almost $2.3 trillion in six months, and is nearing the government’s 2026 target of NT$34 trillion one year ahead of schedule.

The Taiwan Depository & Clearing Corporation had established 400,000 TISA accounts for eligible citizens as of June, with asset managers offering preferential fees. The government will continue to explore further tax incentives and other methods to boost participation in the scheme.

The Kaohsiung hub is also gaining traction, with 23 international and local banks, insurance firms, securities investment trust firms and securities investment consulting firms having already established operations in the city. The FSC estimates that 96 financial institutions will eventually operate in the trial zone.

Technology boost

These developments are underpinned by Taiwan’s strategic embrace of technology. Its semiconductor and artificial intelligence industries provide a solid foundation for integrating financial technology initiatives into asset management.

Giant Taiwanese chipmakers like TSMC and UMC are collaborating with local fintech startups and asset managers to develop specialised AI chips and hardware accelerators for data analytics, portfolio optimisation and risk management.

Asset managers such as Fubon Asset Management and Cathay Securities Investment Trust have developed proprietary AI-driven stock selection models that analyse alternative data sources, including satellite imagery, social media and supply chain information, to identify emerging trends and generate alpha.

Meanwhile, blockchain startups like FundChain are leveraging distributed ledger technology to deliver real-time transparency, streamline compliance and improve fund operations efficiency, helping local asset managers to reduce operational risks and provide investors with greater visibility of their holdings.

Talent development is another key focus, with government initiatives aimed to nurture professionals skilled in cutting-edge technologies and global investment practices. As global investors increasingly prioritise sustainable and socially responsible investments, Taiwan is also integrating environmental, social, and governance principles into its asset management agenda.

Geographical issues

Taiwan’s ambitions are not without challenges. As a latecomer, it must navigate stiff competition from Hong Kong, Singapore and Japan, which have long-standing international reputations and more developed capital markets.

Hong Kong boasts a substantial asset management base with more than $4 trillion of assets. With Hong Kong’s integration with China and focus on initial public offerings and virtual assets, Taiwan may be able to develop niche markets, particularly in the semiconductors and biotechnology sectors, by leveraging its technology sector and reform initiatives.

Singapore, with an efficient government and business-friendly environment, remains a formidable competitor. But Taiwan's huge household savings, cost-competitive skilled talent pool and regulatory reforms targeting wealth management services could present alternative options for investors.

Japan, which has successfully directed household savings into investments through reforms, shares Taiwan’s approach of expanding product offerings and liberalising market access. However, Taiwan’s dynamic local ecosystem and supportive policies may provide an added advantage in nurturing a vibrant asset management industry.

The elephant in the room for Taiwan’s ambitions is the island’s geopolitical tensions with China. Any escalation of cross-strait conflicts could severely dampen investor confidence and disrupt financial markets, potentially undermining Taiwan’s progress.

The Taiwanese government is proactively addressing the geopolitical vulnerabilities by diversifying economic partnerships, promoting the “Taiwan+1” and “China+1” regional supply chain strategies, and establishing special financial zones with operational flexibility to absorb potential shocks. These measures are a pragmatic approach to the challenges, but it’s uncertain whether they will reassure wary foreign investors.

Continued innovation, strategic risk management and global outreach will be essential as Taiwan charts a path to become a prominent asset management centre in Asia.

*This article was published in Asia Asset Management’s September 2025 magazine titled “Big ambitions”.

** On September 1, Taiwan launched the Asian Asset Management Centre Promotion Office and a dedicated website for promoting the island as a regional hub for global asset managers.