On April 18, 2025, the Legislative Yuan passed the third reading of the amendments to certain provisions of the Industrial Innovation Statute (hereinafter, the “Statute”), which were subsequently promulgated by the President on May 7. The amendments mainly cover three key areas: inclusion of artificial intelligence and energy-saving/carbon-reduction technologies in investment tax credits, expansion of fundraising opportunities for startups, and prevention of critical technology outflow. The key points are summarized as follows:

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1. Article 10-1 of the Statute broadens the scope of eligible investment tax credits. In addition to retaining existing categories such as smart machinery, it now includes artificial intelligence and energy-saving and carbon-reduction technologies, encouraging enterprises to adopt digital technologies, enhance adaptability, and improve carbon-reduction efficiency. Meanwhile, the upper limit of the eligible investment tax credit has been raised from NT$1 billion to NT$2 billion. The revised provision shall apply from January 1, 2025, to December 31, 2029.

2. To attract more capital investment into startup ventures, Article 23-1 of the Statute lowers the minimum paid-in capital requirement for limited partnership venture capital enterprises from NT$300 million to NT$150 million. In addition, Article 23-2 extends the eligibility period for high-risk startups from 2 years to 5 years after establishment and reduces the minimum investment threshold from NT$1 million to NT$500,000.

3. To safeguard key technologies, Article 22 of the Statute provides that companies making foreign investments exceeding a specified threshold shall obtain prior approval from the competent authority. Furthermore, Article 67-3 provides that companies conducting such investments without approval shall be subject to a fine ranging from NT$50,000 to NT$1,000,000.

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The Ministry of Economic Affairs will work with the Ministry of Finance to complete the formulation of relevant sub-regulations within six months. These regulations will specify, among other matters, the scope of applicability for artificial intelligence and energy-saving/carbon-reduction projects, the rules governing investments in startup enterprises, and the scope of industries designated as national key development sectors.

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References

1. Laws and Regulations Database of the Republic of China (Taiwan): Addition and Amendment to the Industrial Innovation Statute https://law.moj.gov.tw/News/NewsDetail.aspx?msgid=191371

2. Ministry of Economic Affairs: The amendment to the Industrial Innovation Act passed its third reading, helping industries in introducing artificial intelligence, energy conservation and carbon reduction, and encouraging investment in startups  

https://www.moea.gov.tw/MNS/populace/news/News.aspx?kind=1&menu_id=40&news_id=119084

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