General Corporate Matters, Procedures, and Disclosures

Mergers and acquisitions (“M&A”) in Taiwan are primarily governed by the Business Mergers and Acquisitions Act (the “M&A Act”) unless a highly regulated business sector, such as the financial industry or telecommunications, is involved (see Highly Regulated Business Sector below). In regard to matters not specifically provided for under the M&A Act:

• The Company Act governs general corporate matters and supplements the items that are not otherwise provided for under the M&A Act;
• The Securities and Exchange Act and the regulations promulgated thereunder govern the M&A procedures if the target company or acquirer is a public company, i.e., a company that attains public company status with the Financial Supervisory Commission (“FSC”)—which includes a foreign issuer. The following is a list of the key regulations promulgated under the Securities and Exchange Act that are applicable to M&A activities in Taiwan involving a public company:
  • Regulations Governing the Establishment and Related Matters of Special Committees of Public Companies for Merger/Consolidation and Acquisition;
  • Regulations Governing the Acquisition and Disposal of Assets by Public Companies;
  • Regulations Governing Public Tender Offers for Securities of Public Companies;
  • Regulations Governing the Declaration of Acquisition of Shares in Accordance with Article 43-1, Paragraph 1 of the Securities and Exchange Act;
  • Operating Rules of the Taiwan Stock Exchange Corporation (“TWSE”);
  • Operating Rules of the Taipei Exchange (“TPEx”);
  • TWSE Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities; and
  • TPEx Procedures for Verification and Disclosure of Material Information of Companies with TPEx-Listed Securities.

Highly Regulated Business Sector

If the target company is in a highly regulated business sector, the laws governing that industry will be relevant.

For example, the Telecommunications Act, the Telecommunications Management Act, and the regulations promulgated thereunder by the National Communications Commission for telecom companies would govern the M&A involving telecom companies. If the M&A involves a financial institution chartered by the FSC, the Financial Institutions Merger Act, the Financial Holding Company Act, and the Regulations Governing the Investing Activities of a Financial Holding Company would prevail over the M&A Act.

Antitrust

The Fair Trade Act (the “FTA”) was promulgated in 1991 to promote free and fair competition. Antitrust concern may arise if there is a “combination” due to the M&A transaction. A “combination” under the FTA refers to any of the following circumstances where an enterprise:

• Merges with another enterprise;
• Holds or acquires at least one-third of the voting shares or total capital contributions in another enterprise;
• Acquires or leases all or a major part of the business or property of another enterprise;
• Regularly operates business together with another enterprise or operates business on behalf of another enterprise; or
• Directly or indirectly controls the business operations or the appointment and dismissal of personnel of another enterprise.

A report of combination is required to be made with the Fair Trade Commission (the “FTC”) if:

• As a result of the combination, an enterprise will have one-third of the market share;
• One of the enterprises in the combination has one-fourth of the market share; or
• Sales for the preceding fiscal year of one of the enterprises in the combination exceeds the threshold amount publicly announced by the FTC on January 28, 2026, as follows:
  • the total global sales of all enterprises involved in the combination exceed NT$50 billion in the previous fiscal year, and at least two enterprises had domestic sales of more than NT$3billion in the previous fiscal year;
  • the enterprise involved in the combination is a nonfinancial institution whose domestic sales in the previous fiscal year were more than NT$20 billion, and the enterprise to be merged with it had domestic sales in the previous fiscal year of more than NT$3 billion; or
  • the enterprise participating in the combination is a financial institution whose domestic sales in the previous fiscal year were more than NT$40 billion, and the enterprise to be merged with it had domestic sales in the previous fiscal year of more than NT$3 billion.

The parties in a combination must not proceed with combination during the 30-business-day period commencing from the filing date, which may be extended up to 60 business days if the FTC deems it necessary. The FTC may not reject a combination if the overall economic benefits of it outweigh the disadvantages resulting from the restraint of competition.

Labor Protection

The M&A Act provides certain labor protection for the employees when facing an M&A transaction. In general, the surviving company in a merger or the acquiring company must notify the employees that it wishes to retain at least 30 days prior to the record date of the effective date of the M&A transaction. The retained employees shall respond within 10 days upon the receipt of such notice and would be deemed to accept the retention absent of a response. The seniority of the retained employees must be recognized by the surviving company or the acquiring company. The employment of those who rejected the retention offer may be terminated with prior notice (or payment in lieu of such notice) and by paying severance or pension.

The Labor Standards Act and Act for Worker Protection of Mass Redundancy supplements the provisions of the M&A Act regarding the treatment and protection of employees.

Foreign Investment Restrictions

If the acquirer is not a Taiwanese individual or enterprise, depending on the nationality or jurisdiction of incorporation of the acquirer, the transaction will generally be subject to requirements set forth in the Statute for Investment by Foreign Nationals, the Statute for Investment by Overseas Chinese, or the Statute for Investment by People in Mainland China and to review by the Taiwan’s Department of Investment Review (the “DIR”).

Benefiting from sustained demand for artificial intelligence (“AI”) technologies, Taiwan’s position as a leading manufacturing base for AI servers and advanced computing chips has been a significant driver of economic growth, supporting both export performance and increased capital investment. According to the World Economic Outlook published by the International Monetary Fund (“IMF”) in April 2026, the IMF projects Taiwan’s nominal gross domestic product (“GDP”) per capita in 2026 to be approximately US$42,000 and forecasts real GDP growth of around 5.2%. In addition, according to the Directorate General of Budget, Accounting and Statistics of Taiwan, Taiwan’s real GDP growth rate for the full year of 2025 was 8.68%, based on the preliminary estimate released in February 2026. Further, according to the 2026 Taiwan Economic Forecast released by Academia Sinica (the most prestigious academic institution in Taiwan), the annual growth rate for real private investment for 2025 was 10.56%, driven primarily by surging AI‑related demand and a significant increase in capital equipment imports—factors that may serve as leading indicators for M&A activities.

On top of that, supported by gains in technology stocks, Taiwan’s stock market has ranked sixth globally in terms of total market capitalization, with the aggregate market capitalization of listed companies reaching approximately US$4.47 trillion.

Taiwan’s industrial players have continued to pursue M&A opportunities both domestically and internationally, with the aim of achieving vertical and horizontal integration, as well as operational synergies. Taiwanese enterprises also actively use M&A to broaden their business and service offerings and expand into new geographic markets.

The energy and resources sector, healthcare sector (in particular, contract development and manufacturing organizations and biopharma), and high-tech sectors in the fields of AI and advanced digital technologies continue to attract significant cross-border M&A activities. Also, domestic M&A activity has been particularly active among financial institutions, driven by the consolidation of holding companies, as well as in consumer sectors, including retail and branded food and beverage businesses, which are also recent highlights of the market.

With respect to deal-making and deal structure, the heightened foreign exchange rate volatility has created headwinds for M&A activities by increasing uncertainty around valuation, funding costs, and investment returns. Based on the press release issued by the Central Bank of China (Taiwan) in November 2025, during the second quarter of 2025, the New Taiwan Dollar appreciated sharply from around NT$33 per U.S. dollar to below NT$28.82, representing an appreciation of nearly 13% within a short period. Such volatility can materially affect deal viability, particularly in cross‑border transactions if the acquisition consideration, financing arrangements, and post‑closing cash flows are denominated in different currencies. Accordingly, effective currency risk management to mitigate such exposure has become an increasingly important feature of transaction planning and execution.

In addition, heightened geopolitical tensions continue to be significant drivers affecting the broader business environment and, in turn, M&A activity. Ongoing conflicts, including the war in Ukraine, have reinforced concerns regarding crude oil supply and inflationary pressures; the 2026 Strait of Hormuz crisis and Red Sea conflict have increased shipping costs and caused supply chain disruptions; volatility in the United States tariff regimes has heightened uncertainty around cost structures and pricing assumptions; and U.S. export controls have accelerated structural adjustments in global supply chains, particularly in the technology and manufacturing sectors. Collectively, these factors may influence M&A decision‑making, especially in cross‑border transactions.

Lastly, AI is reshaping how M&A transactions are evaluated, negotiated, and executed. It can accelerate due diligence, expand the depth and scope of risk analysis, enhance valuation and scenario‑modeling capabilities that influence negotiation dynamics, and shorten overall deal timelines. Also, AI can support post‑merger integration by facilitating data integration and improving system compatibility.

Acquisition of a publicly traded company will ordinarily be carried out by a public tender offer, merger, or stock swap. A combination of a public tender offer followed by mergers or stock swaps is often adopted when the privatization of a publicly traded company is an objective of the transaction. Notably, reflecting long‑standing market practice in Taiwan whereby acquisitions carried out by financial holding companies or banks are typically carried out in cash, the amendments implemented by the FSC in 2025 to the Regulations Governing the Investing Activities of a Financial Holding Company formally incorporated this approach into the applicable regulatory framework for such transactions.

There is no equivalent of the U.S. Securities and Exchange Commission’s Rule 10b-5 disclosure in Taiwan. If the target company is a private company, there is very little publicly available information besides the key company registration information available on the governmental website. Such information includes the name, the incorporation date, the last amendment date of the registration information, the list of directors and supervisors, the number of shares held by each shareholder that appointed the directors (as the case may be), and the registered office or factory, if any. Also, the articles of incorporation of Taiwanese companies can be obtained by anyone via an application to the competent authorities. There is no obligation by the target company to disclose diligence-related information. The scope of the disclosure will depend on the agreement between the parties.

If the target company is a public company, a range of publicly available information may be accessed, which includes the annual reports; semi-annual, quarterly, and monthly financial information (including sustainability-related financial information, where applicable); prospectuses; public disclosures relating to each capital increase and bond issuance; and other information that a public company is required to disclose under the relevant securities laws.

A public company has no obligation to disclose any additional information to a potential buyer or bidder in the context of its ongoing or contemplated M&A activity, yet it may be required to make mandatory disclosures to the market under applicable securities laws. All participants in M&A of a public company are required to keep in confidence the information received and undertake not to trade the securities of such public company, due to the application of insider trading rules. Information‑control measures such as clean team arrangements may be adopted so as to mitigate risks of improper selective disclosure of material nonpublic information and potential competition‑law concerns, including gun‑jumping.

If the target company is a private company, it is customary for an acquirer to conduct comprehensive due diligence covering all aspects of the target company’s operations. It is common to trace the last three to five years of documents. The extent of due diligence is often affected by time and costs, and a more cost-sensitive acquirer normally conducts focused due diligence and a red-flag analysis to identify major risks.

A public company tends to resist comprehensive due diligence, since Taiwan has strict securities regulations regulating public companies in Taiwan, and the acquirer would normally focus and rely primarily on the publicly available information of the target company. Any additional diligence, if permitted, is usually limited in scope and subject to strict information‑control measures.

For a private company, the decision-making bodies are the directors and, if the procedures require, the shareholders. For a public company, its audit committee (or a special M&A committee, if established) is involved in the transaction, which is tasked with reviewing the proposed transaction and making recommendations to the directors and the shareholders. The audit committee or special M&A committee is entitled to hire external counsel to help discharge its duties. While not vested with formal decision‑making authority, such committee’s recommendation may materially influence the decision‑making process in practice.

In general, shareholders’ approval is required to effect mergers, stock swaps, spin-offs, general assumption of liabilities, or sale of all or substantially all assets. The approval threshold is generally majority approval by the shares represented by the shareholders present at a shareholders’ meeting attended by the holders of two-thirds of the total issued shares. For a public company, if the shareholders’ meeting is attended by a majority of shareholders but less than two-thirds of the total voting shares, the approval can be obtained if the shareholders of two-thirds of the attending shares approve the transaction.

In addition, if the M&A will result in delisting of the public company, the approval threshold is the affirmative votes of two-thirds of the total issued and outstanding shares of the company.

The M&A Act also provides for a short-form merger where the board approval of the target company would suffice if merging into a company that holds at least 90% of its issued shares. The 2015 and 2022 amendments to the M&A Act introduced a variety of merger, acquisition, and spin-off scenarios where the buyer may only need to obtain board approval if the consideration it pays falls below a certain threshold.

The M&A-related laws and regulations also govern the information and documents that must be included in the shareholder meeting notice. A 2022 amendment to the M&A Act further strengthened the requirements for disclosure of directors’ personal interests in a M&A transaction, and it requires that the shareholders’ meeting notice must disclose the interested director’s personal interest in the M&A transaction and set forth his or her decision of approval/dissent and the rationales thereof.

Under the Company Act, directors owe a duty of care as a “good administrator” to the company and shareholders. This is similar to fiduciary duties under common law. In addition, the M&A Act also imposes additional obligations of the directors in M&A transactions.

In the event of merger/consolidation and acquisition by a company, the board of directors shall, in the course of conducting the merger/consolidation or acquisition, fulfill its duty of care in the best interests of the company. Any director involved in decision-making for a merger/consolidation or acquisition shall be liable for any damages to the company as a result of breach of applicable laws, ordinances, articles of incorporation, or the resolution of the general meeting conducting the merger/consolidation and acquisition, unless a director is able to provide sufficient evidence to demonstrate his or her objection to the transaction.

In the merger/consolidation and acquisition by a company, a director who has a personal interest in the merger/consolidation and acquisition transaction shall disclose at the board meeting and the shareholders’ meeting the essential contents of such personal interest and the cause of his or her approval or dissent with respect to the resolution on the merger/consolidation or acquisition. Please note that under the M&A Act, the acquirer will not be required to abstain from voting on the shares of the target that it holds at the time of acquisition, and in the event that any director of the target is a representative of the acquirer, such director will also not be required to abstain from voting on the acquirer’s proposed M&A with the target, notwithstanding resolutions on such M&A transactions that present a personal interest.

In a tender offer, the directors and controlling shareholders of a target company are further obligated to disclose, as the case may be, the following information with respect to the two years prior to filing of the tender offer in the prospectus:

a. All of the agreement or covenant documents entered into with the tender offeror or any of its related parties in connection with such public tender offer, and

b. The date, number, and price in relation to any sale of shares of the target company involving the tender offeror or any of its related parties.

In the case of a public company, the members of the special committee or audit committee, as the case may be, are also required under the Regulations Governing the Establishment and Related Matters of Special Committees of Public Companies for Mergers/Consolidation and Acquisition to exercise the duty of care of a good administrator in performing their official duties faithfully.

Employees do not have a special approval or consultation right. However, for an M&A transaction under the M&A Act, the surviving company or acquiring company must notify the employees of the target who it wishes to retain and inform them of the relevant employment terms at least 30 days prior to the effective date of the transaction. The employees may decline to be retained and, instead, receive severance pay or a pension payment (if they qualify for retirement), as the case may be. If they accept the retention, then their past service tenure with the target must be recognized by the acquirer.

In addition, in the case of a merger, general assumption of liabilities, sale of all or substantially all assets, or a spin-off (or division), the M&A Act provides for the protection of the target company’s creditors. Upon obtaining the requisite corporate approval of such a transaction, the target company shall immediately notify or make a public notice to each creditor and specify a period of not less than 30 days to allow an objection to be filed by the creditors of the target company. A target company that has not given notice or made a public announcement, or that otherwise fails to satisfy a creditor who has raised an objection to the spin-off (or division) in a manner permitted under the law, shall not assert the transaction as a defense against such creditors. In a spin-off, the surviving or newly incorporated transferee company (that receives the assets from the spin-off), unless the liabilities existing before the spin-off could be severed, shall, within the scope of contributions made by the transferee company, be jointly and severally liable to discharge the liabilities incurred by the company that was spun off prior to the spin-off. However, the creditors’ right to claim for the performance of the joint and several liabilities shall be extinguished if such right is not exercised by the creditors within two years from the reference date of the spin-off.

For a public company, the M&A must first be reviewed by a special committee formed by the board or the audit committee before it is submitted to its board for approval.

Almost every M&A project in Taiwan has conditions to closing and it largely depends on the bargaining power of the parties. Customary conditions include required corporate approval, governmental approval (such as foreign investment clearance from the DIR or antitrust approval from the FTC, where relevant), no material adverse change, accuracy in representations and warranties, and satisfactory due diligence results. It is also common to add additional closing conditions for special circumstances, such as rectification of any deficiencies discovered during due diligence.

The letter of intent or memorandum of understanding (or other documents serving the same purpose) may incorporate a binding exclusivity or no-shop clause and a breakup or reverse breakup fee. Another possible deterrent is to build in a liquidated damages clause for breach of exclusivity. Under Taiwan laws, a liquidated damages obligation is enforceable, though a court has the discretion to reduce the amount after considering the degree of the breach and the financial conditions of the breaching party.

In addition to the breakup fee and liquidated damages for breaching exclusivity, reimbursement of legal fees and costs of due diligence are frequently included in the letter of intent or memorandum of understanding.

Cash remains the most common form of consideration in Taiwan for M&A transactions. In some cases, such as group restructuring, shares of the acquirer may be used. While there are restrictions on the use of shares, by way of legislative background, draft amendments have been proposed to introduce tax deferral incentives for share exchange transactions, with a view to encouraging industry consolidation through the establishment of industrial holding companies. Such draft amendments are currently pending legislative review and have not yet taken effect.

If the target company is a private company and the acquirer is a foreign entity, under the current regulations of the DIR (the agency in charge of reviews of foreign investment applications), the acquirer must either be an operating company or satisfy other qualifications set by the DIR. This makes companies in tax-haven countries, such as the Cayman Islands, generally unfit to act as the acquirer in a stock-for-stock acquisition or merger.

If the acquirer is a public company in Taiwan, use of its own shares as consideration will be subject to additional requirements, which include profitability or net equity value tests of the acquirer and the target company and the prior approvals of (a) the FSC, (b) the TWSE for TWSE-listed companies, and (c) the TPEx for TPEx-listed companies.

The Company Act requires that an acquirer must notify the target company within one month after it obtains one-third or more of the total voting shares or capital of the target company and again when it obtains one-half or more. The target company must then publicly disclose the identity of the acquirer and its shareholding within five days after receipt of such notice or face administrative fines.

If the target company is a public company, in addition to the above:

• Once the acquirer (together with any other persons acting in concert with the acquirer) obtains 5% of such company’s shares, according to the Regulations Governing the Declaration of Acquisition of Shares in Accordance with Article 43-1, Paragraph 1 of the Securities and Exchange Act effective in 2024, the transaction is required to be reported to the FSC (with a copy to the target company, TWSE, or TPEx, depending on the listed market of the target company) and be publicly disclosed; for a corporate acquirer, the identity of any shareholder holding 5% or more of its shares and any person controlling such shareholder shall be disclosed as well. Any subsequent increase or decrease of the shareholding totaling 1% or more of the total issued shares of the target company would need to be reported until the acquirer’s shareholding falls under 5% of the target company’s total issued shares. There are a few exceptions where a public disclosure is required regardless of the acquirer’s shareholding percentage in the target company: (a) in a tender offer of a public company’s shares, the offeror is required to publicly disclose its stake in the target company, regardless of whether such stake is 5% or more; or (b) if the acquirer becomes a director of the target company, the director is required to disclose its shareholding on a monthly basis; and
• If the acquirer (together with any persons acting in concert) obtains more than 5% of the issued shares of the target company in certain regulated industries, such as banking, it shall also report to the FSC. Further, prior regulatory approval is required where the relevant shareholding threshold exceeds 10%, 25%, or 50%. Failure to comply with the applicable reporting or approval requirements will result in the voting rights attached to the portion of shares in excess of such threshold being suspended, and the FSC may order the disposal of such excess shareholding.

For a private company, there is generally no public disclosure requirement at the stage of negotiation. In the case where the transaction involves a TWSE-listed or a TPEx-listed company, such a company is subject to the public disclosure requirements provided by the TWSE Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities and the TPEx Procedures for Verification and Disclosure of Material Information of Companies with TPEx-Listed Securities, respectively.

The general principle is that a public company must disclose on the designated website—the Market Observation Post System (“MOPS”), which is hosted by the TWSE (MOPS is Taiwan’s equivalent to the U.S. Securities and Exchange Commission’s EDGAR)—any matter that had a significant impact on shareholders’ rights or the price of the securities within two days following the date of occurrence (including the date of occurrence). The date of occurrence is further defined as “the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or another date on which the counterpart and monetary amount of the transaction can be confirmed, whichever date is the earliest,” provided that, for an investment for which approval of a competent authority is required, the earliest of the above date or the date of receipt of approval by the competent authority shall apply.

Therefore, a public disclosure is required at any stage of the negotiation that meets the foregoing definition of the date of occurrence. In certain circumstances, a press conference might be required by the TWSE or the TPEx, respectively, which should be held by the management of the public company during the nontrading hours immediately following the adoption of the board meeting resolution approving the M&A transaction.

Additionally, in the event of an M&A transaction involving a foreign company, the public company shall promptly, completely, and accurately disclose on MOPS information related to the resolution for, process of, and method of the M&A activities.

There is no legal restriction as to the maximum time period for negotiation or due diligence. The length of negotiations and due diligence are determined by the parties, taking into account, among other things, the costs to be incurred, the business objectives, and the certainties of the deals.

Generally, there is no maximum period between deal announcement and its completion. There are, however, exceptions due to deal structure or specific industry.

For example, the Regulations Governing Public Tender Offers for Securities of Public Companies require that the initial tender offer period shall be at least 20 business days and no more than 50 business days. This initial period may be extended once for a period of up to 50 business days. These regulations do not stipulate how soon the consideration must be paid following the expiry of the tender offer period, but the FSC recommends the offeror to pay consideration within five to nine business days after the expiry of the tender offer period, depending on the form and source consideration.

A tender offer may only commence once it is announced, but these regulations do not stipulate how soon the tender offer must commence after the announcement. Therefore, technically speaking, there is no maximum period between deal announcement and its completion of a transaction conducted by way of a tender offer.

Also, the Regulations Governing the Investing Activities of a Financial Holding Company provide that if a financial holding company invests in a public company, the acquisition of such shares should be completed for cash consideration in a single transaction via tender offer within three months following the approval date; if the target is a nonpublic company, the investment should be completed within three months.

While there is no law setting the minimum price in an acquisition, it is typical to offer a price that is fair, often at a premium over-market price to garner shareholders’ support to complete the transaction. For a public company, the audit committee (or a special M&A committee, if established) shall retain an independent expert to render a fairness opinion to support the consideration, which shall be presented to the directors and shareholders. Also, as dissenting shareholders who have exercised their appraisal right may ask the court to decide the fair price, the acquirer should also consider whether the offer price could be upheld in court. If the court decides on a higher price, there will be extra costs to be paid to those dissenting shareholders, though it would not affect the validity of the transaction.

It is possible for target companies to provide assistance to the acquirer to purchase its own shares. In general, when the target companies consider whether to provide financial assistance and the forms of such assistance, the directors of the target company must exercise duty of care as a good administrator to the company and shareholders, and they must pay close attention to potential conflicts of interest. Also, for any assistance that involves lending of the target company’s funds, such assistance is subject to the lending restrictions applicable to all companies in Taiwan—Taiwan’s Company Law prohibits a company from lending funds to its shareholders or any others unless: (a) there are business transactions between the companies, or (b) there is a need for short-term financing between the companies, provided that the amount of such short-term financing does not exceed 40% of the lender’s net value.

In addition, for public companies, the restrictions under the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies would apply. For example, a public company or its subsidiaries cannot loan an amount exceeding 10% of the net value of the borrowing enterprise.

As a matter of practice, acquisitions of Taiwan companies are customarily governed by the laws of Taiwan. Parties often structure the acquisition with reference to the M&A Act, as it provides various tax benefits.

The M&A Act has been amended from time to time to keep pace with market practice. In particular, the 2022 amendment introduced tax deferral-related amortization measures for intangible assets acquired through M&A transactions, while more recent draft amendments seek to use tax deferral incentives to encourage the formation of industrial holding companies through M&A activities.

Under the M&A Act, M&A transactions are required to be documented by written agreements. Where a shareholders’ meeting is required, such contracts will be submitted for the shareholders’ approval, and the major contents of the relevant agreements shall be provided to shareholders as part of the meeting notice. If a shareholders’ meeting is not required, then the shareholders will be notified of the major contents of such contracts in accordance with applicable statutory requirements.

In the case of a tender offer, as the offer is made to all shareholders of the target company, the acquirer needs to prepare a tender offer report and a tender offer prospectus. All attachments to these documents, such as a legal opinion and a fairness opinion, are public-facing documents.

Subject to any governmental approvals required for the consummation of the transactions, such as foreign investment approval if the acquirer is foreign and merger control approval if the acquisition raises antitrust concerns, transfer of a share requires an entry on the shareholder register. If the transferred shares are represented by certificates, then endorsement and delivery by the transferor, as well as entry into the shareholder roster maintained by the target company, are necessary to effect a transfer. For shares represented by share certificates, capital gain taxes (securities transaction income tax) are currently suspended, but there is still a securities transaction tax of 0.3% on the consideration.

In Taiwan, hostile acquisition is not a common feature but happens occasionally. This is mainly because the government considers minority shareholder protection as a priority, and the target company therefore can leverage the objections from the minority shareholders as a way of defense, causing uncertainties regarding the deal.

In regard to M&As involving financial holding companies particularly, the regulatory approach has evolved over time. The FSC amended the Regulations Governing the Investing Activities of a Financial Holding Company in 2018 to facilitate consolidations between financial holding companies by not requiring the consent of the target company’s board in favor of the M&A if the acquirer meets the conditions of capital adequacy, good management capability, global expansion capability, and good corporate social responsibility. In November 2022, Fubon Financial Holding Co., Ltd. completed its merger with Jih Sun Financial Holding Co., Ltd. This deal was initially a hostile acquisition and the first M&A between two financial holding companies in Taiwan.

In this context, amendments finalized in 2025 to the said regulations further refined the legal framework by increasing the substantive and procedural requirements imposed on acquirers, including requirements relating to cash consideration, enhanced internal governance review, independent expert opinions, and supervisory scrutiny. While the FSC’s public statements clarify that the regulatory framework does not distinguish acquisitions by reference to notions of “hostility,” the amendments reflect a regulatory focus on financial stability and orderly market operations, together with clearer expectations regarding the allocation of integration‑related responsibilities to the acquirer.

Directors who are also shareholders can enter into a shareholders’ agreement or a voting trust with other shareholders for any matters relating to M&As.

Also, the amendments to the Company Act in recent years have allowed Taiwanese private companies to issue preferred shares with multiple votes, veto rights, or different ratios for conversion to common shares (previously, each preferred share had to be convertible into one common share). However, these special features are only applicable to a private company. We have not seen “poison pill”-like protection for public companies.

From a director’s personal liability perspective:

• Taiwan’s M&As laws do not per se prohibit the target directors appointed by the acquirer to vote on the acquisition, without the need to abstain; and
• A public company is required to establish a special M&A committee to, or if there is an audit committee, such audit committee is required to, review and negotiate the plan of acquisition to ensure its fairness and reasonableness prior to the submission of such plan of acquisition to the board of directors for approval, which reduces the exposure of the directors to liabilities when they vote in line with the recommendation of the special committee.

A buyer is required to initiate a tender offer if it proposes to acquire, by itself or acting in concert with others, 20% or more of the issued shares of a public company within any 50-day period.

If an acquirer does not obtain full control of a target company, the minority shareholders continue to possess all shareholder rights prescribed by law, which include scenarios that give rise to appraisal rights under the M&A Act or the Company Act (for example, under the M&A Act, a shareholder is entitled to appraisal rights if a private company amends its articles of incorporation to impose share transfer restrictions, including providing a right of first refusal, drag-along right, or certain transfer restrictions), upon which they may exercise appraisal rights in scenarios and manners prescribed under the M&A Act to demand the target company repurchase its shares at a fair price, provided that the shareholder duly expresses dissent and votes against or abstains from voting at the shareholders’ meeting.

The M&A Act permits the use of cash as consideration in a merger or share swap. Such mechanisms could effectively cash out the minority stakes, while the minority shareholders may exercise appraisal rights in scenarios and manners prescribed under the M&A Act to demand the target company repurchase its shares at a fair price.

On the other hand, minority shareholders cannot require the acquisition of their shareholding other than in scenarios where they are entitled to appraisal rights under the law.