{"id":138738,"date":"2026-04-09T11:36:39","date_gmt":"2026-04-09T11:36:39","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=138738"},"modified":"2026-04-09T11:36:39","modified_gmt":"2026-04-09T11:36:39","slug":"taiwan-venture-capital","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/taiwan-venture-capital\/","title":{"rendered":"Taiwan: Venture Capital"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-138738","comparative_guide","type-comparative_guide","status-publish","hentry","guides-venture-capital","jurisdictions-taiwan"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Lee and Li, Attorneys-at-Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/12\/Firm-Logo-1.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Lee and Li, Attorneys-at-Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/12\/Firm-Logo-1.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Venture Capital laws and regulations applicable in Taiwan<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there specific legal requirements or preferences regarding the choice of entity and\/or equity structure for early-stage businesses that are seeking venture capital funding in the jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For start-ups seeking venture capital investment, the most common type of company in Taiwan is a private company limited by shares. Day\u2013to-day operations are managed by the board of directors, while major corporate actions require shareholder approval. A company limited by shares can issue preferred shares with specific preferential rights and privileges as allowed by law, which must be detailed in the articles of incorporation. These rights and privileges may include those typically acquired by venture capital investors when investing in early-stage start-ups, such as liquidation preferences, dividend rights, and the right to be elected as directors. While there are no standardized transaction documents announced by any local government agencies or relevant associations, Taiwan&#8217;s venture capital market is quite mature, with well-established investment documentation.<\/p>\n<p>Thus, early-stage start-ups in Taiwan that are looking for venture capital funding would typically be organized as companies limited by shares, as the corporate governance structure and investment documentation are familiar to both international and local venture capital investors. The analysis in this article assumes that the Taiwanese start-ups are companies limited by shares.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the principal legal documents for a venture capital equity investment in the jurisdiction and are any of them publicly filed or otherwise available to the public?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The principal legal documents for venture capital equity investment include the following:<\/p>\n<ul>\n<li>Term Sheet: It is common for venture capital and start-ups to first sign a term sheet to set out the key terms and conditions before negotiating the definitive agreements.<\/li>\n<li>Share Subscription Agreement: This agreement sets out the key commercial terms, including company valuation, share subscription price, company representations and warranties, closing conditions and mechanism and company disclosure schedules.<\/li>\n<li>Shareholders\u2019 Agreement: This agreement primarily governs the rights of venture capital and other shareholders, as well as the corporate governance and actions of the start-up. It includes provisions such as a voting agreement, matters reserved for the board and shareholders, restrictions on founders and key management, and rights of first refusal, co-sale\/tag-along, and drag-along.<\/li>\n<li>Amended Articles of Incorporation: The Articles of Incorporation of a Taiwan company, including start-ups, are usually quite standard because only matters permitted by law may be included. Thus, in practice, not all mechanisms agreed in the Shareholders&#8217; Agreement may be included in the Articles of Incorporation. The Articles of Incorporation must include the classes of shares, the voting rights of different classes of shares, and the rights and privileges of preferred shares (such as liquidation preference). For board and shareholder reserved matters and voting agreements, only those that are permitted by the Company Act can be included in the Articles of Incorporation.<\/li>\n<\/ul>\n<p>The amended Articles of Incorporation must be filed with the competent registry, and anyone may request a copy of the Articles of Incorporation of any company.\u00a0 Other than that, the transaction documents need not be publicly disclosed or filed with any government agency.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a venture capital industry body in the jurisdiction and, if so, does it provide template investment documents? If so, how common is it to deviate from such templates and does this evolve as companies move from seed to larger rounds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Taiwan Venture Capital Association, established and managed by mostly local venture capital firms, has not provided any template investment documents. \u00a0However, in practice, venture capital investors prefer investment documents in forms that are customary in the market, such the template investment agreements of the National Venture Capital Association.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any general merger control, anti-trust\/competition and\/or foreign direct investment regimes applicable to venture capital investments in the jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>An anti-trust notification to the Taiwan Fair Trade Commission may be triggered by a transaction whose structure constitutes a &#8220;combination&#8221; and whose participating parties satisfy either the turnover or market share thresholds under the Fair Trade Act. However, venture capital investments in start-ups rarely trigger an anti-trust notification, as such investments typically involve the acquisition of minority ownership.<\/p>\n<p>The acquisition of equity in Taiwanese start-ups by non-local venture capital is subject to foreign direct investment control. Non-local venture capital includes (i) foreign venture capital (i.e., venture capital other than the People&#8217;s Republic of China (PRC) venture capital) and (ii) PRC venture capital. These two types of venture capital are subject to different foreign direct investment regimes.<\/p>\n<p><strong>Foreign venture capital:<\/strong><\/p>\n<p>Foreign venture capital (i.e., venture capital other than PRC venture capital) is prohibited from acquiring the equity of a Taiwanese start-up engaged in the businesses listed on a negative list issued by the Department of Investment Review (&#8220;DIR&#8221;) of the Ministry of Economic Affairs. This acquisition is subject to additional restrictions, such as limitations on foreign shareholding, as set forth in the negative list. Additionally, foreign venture capital must obtain prior foreign investment approval from the DIR before acquiring the equity of a Taiwanese start-up.<\/p>\n<p><strong>PRC venture capital:<\/strong><\/p>\n<p>Under Taiwanese law, PRC venture capital (i) may only acquire the equity in Taiwanese start-ups engaged in businesses in which PRC investors are permitted to invest, as set forth on a positive list issued by the DIR, and (ii) must obtain prior foreign investment approval from the DIR before acquiring equity in Taiwanese start-ups engaged only in the businesses described in (i) above.<\/p>\n<p>Taiwanese law broadly defines &#8220;PRC investor.&#8221; PRC investors include entities established in a jurisdiction other than Taiwan or China that meet either the PRC shareholding test or control test. Companies that are at least 30% owned, directly or indirectly, by PRC citizens\/companies, or that are controlled, directly or indirectly, by PRC citizens\/companies, are considered \u201cPRC investors\u201d and are subject to PRC investment restrictions. Funding from PRC military or political sources is also prohibited. In practice, PRC investors&#8217; proposed investments in Taiwan face strict scrutiny.<\/p>\n<p>Due to Taiwan&#8217;s stringent foreign direct investment regulations, some foreign venture capital funds prefer that Taiwanese start-ups adopt the \u201coffshore holding structure\u201d where an offshore company (such as one in the Cayman Islands or British Virgin Islands) acts as the holding vehicle to hold 100% of the Taiwanese start-up&#8217;s equity. Under this structure, the acquisition of the shares in the offshore holding vehicle by a foreign venture capital fund (excluding PRC investors, as defined under Taiwanese law) does not require prior foreign investment approval from the DIR.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the process, and internal approvals needed, for a company issuing shares to investors in the jurisdiction and are there any related taxes or notary (or other fees) payable?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>(i) Issuance of a new class of shares, or (ii) issuance of new shares of any existing class of shares exceeding the authorized share capital stipulated in the Articles of Incorporation, requires board and shareholder approvals to amend the Articles of Incorporation. Issuance of new shares of any existing class of shares within the authorized share capital stipulated in the Articles of Incorporation only requires board approval.<\/p>\n<p>In general, existing shareholders and employees of Taiwanese start-ups are entitled to the following pre-emptive rights:<\/p>\n<ul>\n<li>Existing shareholders: pre-emptive rights in proportion to their respective shareholdings; and<\/li>\n<li>Employees: pre-emptive rights to 10% to 15% of the new shares to be issued.<\/li>\n<\/ul>\n<p>Taiwanese start-ups must notify and obtain waivers from existing shareholders and employees before issuing new shares to venture capital, except for certain exemptions. An issuing company&#8217;s issuance of new shares can be exempted from the abovementioned pre-emptive rights of existing shareholders and employees in the following cases:<\/p>\n<ul>\n<li>A company limited by shares in which foreign investors collectively hold 45% or more of the shares; or<\/li>\n<li>A closed-end company limited by shares.<\/li>\n<\/ul>\n<p>The issuance of new shares is not subject to any taxes or notary fees but is subject to the following fees:<\/p>\n<ul>\n<li>a government registration fee equal to 1\/4,000 of the increased paid-in capital of the issuing company; and<\/li>\n<li>if physical share certificates are required, a fee for share certificate authentication generally equal to 3\/10,000 of the par value of the shares (which may be subject to a cap depending on the policy of the authenticating bank) and a minimal fee for printing physical share certificates.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How prevalent is participation from investors that are not venture capital funds, including angel investors, family offices, high net worth individuals, and corporate venture capital?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Investments in start-ups from investors other than venture capital are common. Angel investors, often friends, family, or industry professionals, typically fund series seed round financing of start-ups.<\/p>\n<p>In May 2018, the National Development Fund (NDF) initiated the Business Angel Investment Program, through which the NDF invests in start-ups at various stages alongside other private investors, thereby providing start-ups with access to private investors&#8217; resources. The program&#8217;s original term ended on December 31, 2025, with an investment budget of TWD 5 billion. In late 2025, the NDF extended the program\u2019s term to December 31, 2030 and increased its budget by an additional TWD 5 billion, bringing the total funding to TWD 10 billion.<\/p>\n<p>While the global advisory industry for high-net-worth individuals and family offices is booming, it is less prevalent in Taiwan. As a result, investments in start-ups by family offices remain uncommon. To address the growing need for asset management, the Financial Supervisory Commission (FSC) has launched various initiatives since late 2024. These initiatives aim to make Taiwan a leading Asian asset management hub within six years. They include regulatory reforms and incentives for establishing family offices, as well as related financial and consulting services. Notably, the FSC has promulgated the &#8220;Operational Guidelines for Financial Institutions Applying to Pilot Businesses in the Local Asset Management Zone&#8221; for a Kaohsiung pilot program (&#8220;Kaohsiung Asset Management Zone&#8221;). This program outlines bank and client qualifications and the financial advisory services permitted for the pilot, with the ultimate goal of accelerating Taiwan&#8217;s transformation into a regional asset management hub. The Kaohsiung Asset Management Zone launched on July 1, 2025, with a one-year trial period ending June 30, 2026. As of March 17, 2026, 21 banks have been approved to conduct business trials (mainly credit services, family offices services, and cross-border financial services) in the Kaohsiung Asset Management Zone.<\/p>\n<p>Corporate venture capital investments are also becoming more prevalent, particularly in start-ups that may create synergies with the businesses of the corporate venture capital group companies.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the typical investment period for a venture capital fund in the jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no standard investment period. The typical investment period for a venture capital fund is generally three to seven years, which varies based on global and local macroeconomics and the investment phase in each start-up.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key investment terms which a venture investor looks for in the jurisdiction including representations and warranties, class of share, board representation (and observers), voting and other control rights, redemption rights, anti-dilution protection and information rights?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Venture capital investments would usually seek to hold preferred shares in start-ups with preferential rights and privileges that are distinct from ordinary shares.<\/p>\n<p>The major preferential rights and privileges of the preferred shares and the key investment terms include the following:<\/p>\n<ul>\n<li>Information and inspection rights.<\/li>\n<li>Board seat or board observer seat.<\/li>\n<li>Board reserved matters &#8211; the implementation of which requires the approval of a certain number of directors.<\/li>\n<li>Preferred shareholders\u2019 reserved matters &#8211; the implementation of which requires the approval of a certain percentage of the preferred shareholders.<\/li>\n<li>Pre-emptive right &#8211; which entitles the holders of preferred shares to participate in the company\u2019s new rounds of equity offerings on a pro rata basis.<\/li>\n<li>Anti-dilution right &#8211; which allows the conversion price\/rate for the conversion of preferred shares to ordinary shares be adjusted upon an event that would dilute the shareholding\/value of the preferred shares, such as the issuance of new shares at an issue price lower than the original issue price of the preferred shares.<\/li>\n<li>Restrictions on the transfer of ordinary shares by founders or key management team members.<\/li>\n<li>Right of first refusal &#8211; giving holders of preferred shares the right to purchase, on a pro rata basis, shares offered for sale by other shareholders.<\/li>\n<li>Right of co-sale\/tag-along &#8211; which allows holders of preferred shares to sell their preferred shares together with shares offered for sale by other shareholders, usually the founders\/key management.<\/li>\n<li>Liquidation preference &#8211; which allows holders of preferred shares to be paid before common shareholders upon the liquidation of the issuing company or the occurrence of a deemed liquidation event.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key features of the liability regime (e.g. monetary damages vs. compensatory capital increase) that apply to venture capital investments in the jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Venture capital investors are generally entitled to monetary damages for losses suffered as a result of breaches by the company, the founder and\/or other parties of the share subscription agreement (including breaches of representations and warranties) or the shareholder&#8217;s agreement. Injunctive remedies are usually also available to venture capital investors under the investment documents and the law.<\/p>\n<p>Although the issuance or transfer of additional compensatory shares to venture capital investors has been observed in the market, this practice is not common in venture capital investment documents in Taiwan.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How common are arrangement\/ monitoring fees for investors in the jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Given the early-stage nature and scale of start-up fundraising, arrangement\/monitoring fees are rarely seen in the market, and venture capital investment documents would typically require start-ups and even founders\/key management to represent and warrant that no broker fees of any kind will be paid by the start-ups.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are founders and senior management typically subject to restrictive covenants following ceasing to be an employee and\/or shareholder and, if so, what is their general scope and duration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Restrictive covenants on founders and senior management after they leave the company are quite common.\u00a0 Such restrictive covenants typically include non-compete, non-solicitation and non-disparagement provisions.<\/p>\n<p>Under Taiwan labor law, a post-employment non-compete clause for employees is valid and enforceable only if all of the following conditions are met:<\/p>\n<ul>\n<li>The company has legitimate business interests to protect;<\/li>\n<li>The employee has access to or the ability to use the employer\u2019s trade secrets;<\/li>\n<li>Restrictions on the period (not to exceed two years), area, scope of occupational activities and prospective employers must be reasonable and must be expressly stated in the employment agreement; and<\/li>\n<li>The employer will pay reasonable compensation to the employee if the employer requests the employee to adhere to the post-employment non-compete obligations, which must be expressly stated in the employment agreement. Reasonable compensation must be at least half of the employee&#8217;s average monthly salary for the six months before termination.<\/li>\n<\/ul>\n<p>Although the company\u2019s relationship with its founder or senior management is usually a &#8220;mandate relationship&#8221;, which differs from an employee&#8217;s relationship, courts tend to refer to the standards under the labor law when determining the validity and enforceability of post-termination non-compete clauses for founders or senior managers. Key conditions for enforceability include: (i) the post-termination non-compete period shall not exceed two years, and (ii) the agreement must explicitly indicate reasonable compensation if the company enforces the non-compete clause.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are employees typically incentivised in venture capital backed companies (e.g. share options or other equity-based incentives)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Start-ups often incentivise employees with an employee stock option scheme, either as statutory employee stock with transfer restrictions (under the Company Act) or as employee stock options:<\/p>\n<ul>\n<li>Employee stock options \u2013 stock options typically vest gradually over two to four years, or for founders and senior management, upon achieving performance milestones (e.g., revenue or fundraising targets). Upon vesting, employees can choose whether to exercise their options to subscribe for the shares in start-ups.<\/li>\n<li>Statutory employee stocks &#8211; statutory employee stocks (with transfer restrictions) may be issued to employees first while being subject to a transfer restriction of up to two years. Upon the expiration of the restrictive period and upon satisfying the applicable requirements, employees can freely transfer the shares; otherwise, the employee stocks issued will be cancelled.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most commonly used vesting\/good and bad leaver provisions that apply to founders\/ senior management in venture capital backed companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A vesting period ranging from two to four years with 15%-30% of the total options\/shares granted\/issued vesting in the employees each year is the most common structure.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What have been the main areas of negotiation between investors, founders, and the company in the investment documentation, over the last 24 months?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Taiwan start-ups thrived in 2024 and 2025; however, global macroeconomic uncertainty has affected valuations and investment milestones.\u00a0 Negotiations between investors and start-ups focuses on performance milestone for follow-on funding or stock option vesting. Investors also seek favorable liquidation preferences, pushing for 150% to 200% of their initial investment in the event of a start-up&#8217;s liquidation or the occurrence of deemed liquidation events, rather than 100%.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How prevalent is the use of convertible debt (e.g. convertible loan notes) and advance subscription agreement\/ SAFEs in the jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Convertible debt\/notes are common in Taiwan because they offer venture capital investors more flexibility before making firm equity investments in start-ups. The terms and conditions and documentation of convertible debt\/notes are quite well established and much simpler than those of an equity investment.<\/p>\n<p>SAFEs have been well established in the venture capital investment market in some jurisdictions, and they are also widely known in Taiwan&#8217;s venture the capital market. SAFEs entail a commitment to acquire equity in the future at a discounted price or subject to a valuation cap, which is more uncertain than convertible debt\/notes. Convertible debt\/notes are repaid with interest upon the maturity date, unless they are converted. The enforceability of certain terms and conditions of SAFEs under Taiwan laws and regulations remains untested by Taiwan courts. Therefore, based on our observation, SAFEs are sometimes used but not widely used by venture capital investments in Taiwan start-ups.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the customary terms of convertible debt (e.g. convertible loan notes) and advance subscription agreement\/ SAFEs in the jurisdiction and are there standard from documents?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The customary terms of convertible debt\/notes include the following:<\/p>\n<ul>\n<li>Warrant\/conversion right that gives investors the right to participate in the start-up&#8217;s next round of qualified fundraising at a discounted price and\/or subject to a valuation cap.<\/li>\n<li>Maturity, which typically ranges from one to three years.<\/li>\n<li>Interest rate.<\/li>\n<li>Repayment terms at maturity if the investors elect not to convert the notes or the notes cannot be converted into equity in the start-ups.<\/li>\n<li>Customary representations and warranties and covenants of the start-ups.<\/li>\n<\/ul>\n<p>Given SAFEs are standardized and simple, negotiation would focus on the discounted price and\/or the valuation cap to allow investors to participate in the next round of fundraising of the start-ups.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How prevalent is the use of venture or growth debt as an alternative or supplement to equity fundraisings or other debt financing in the last 24 months?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Taiwanese start-ups are increasingly turning to banks for venture or growth debt. This type of financing helps start-ups meet their immediate funding needs after seed, series A, or series B rounds of financing. It also helps them avoid the complexities and equity dilution of further equity investment. Start-ups find debt financing to be more efficient because it reduces negotiation time, fundraising costs and paperwork.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the customary terms of venture or growth debt in the jurisdiction and are there standard form documents?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The customary terms of venture debt or growth debt are similar to those of convertible debt\/notes and include the following:<\/p>\n<ul>\n<li>A facility arrangement fee may be payable for venture debt offered by banks.<\/li>\n<li>Warrant\/conversion right giving lenders the right to participate in the next round of fundraising of the start-ups at a discounted price or subject to certain valuation cap.<\/li>\n<li>Maturity, typically one to three years.<\/li>\n<li>Interest rate.<\/li>\n<li>Repayment terms at maturity.<\/li>\n<li>Customary representations and warranties and covenants of the start-ups.<\/li>\n<li>Security is usually in the form of a lien on all of the material assets of the start-ups.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the current market trends for venture capital in the jurisdiction (including the exits of venture backed companies) and do you see this changing in the next year?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Venture capital investment in start-ups in Taiwan in 2026 will likely continue to be strongly influenced by global macroeconomics and the government\u2019s ongoing efforts promoting the investments in and the growth of start-ups. These efforts include regulatory reforms and new policies designed to boost innovation and reduce bureaucratic hurdles for start-ups.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are any developments anticipated in the next 12 months, including any proposed legislative reforms that are relevant for venture capital investor in the jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Apart from the FSC&#8217;s ongoing efforts to establish Taiwan as an Asian asset management hub and the extension of NDF&#8217;s Business Angel Investment Program, we are not aware of any significant legislative changes that would affect venture capital investors in Taiwan.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">3616<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/138738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=138738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}