Key Takeaways
- • National Development Council head Yeh Jiunn-shyan told the Legislative Yuan on November 11 that the draft special law for a national sovereign wealth fund has entered article drafting, with a proposal possible by year-end at the earliest.
- • Initial capital is tentatively set at NT$30 billion (about $913.3 million), with investment focused on overseas sales channels, critical raw materials and key technologies.
- • Funding would come from Central Bank foreign exchange reserves on a paid-allocation basis, special government bonds from the Ministry of Finance, and bonds issued by the fund company, with insurers and the four major funds possibly participating.
- • The government aims to submit the bill to the Legislative Yuan in the first half of next year.
- • A Ministry of Audit review found 71 of 245 National Development Fund Angel Investment Program companies carrying unrealized losses above one-third of cost, totaling NT$930 million (about $28.3 million); the overall portfolio remains profitable at about NT$37 million (about $1.1 million).
Summary
Taiwan's National Development Council head Yeh Jiunn-shyan told the Legislative Yuan's Economics Committee on November 11 that the draft special law for a national sovereign wealth fund has reached the article-drafting stage and could be proposed by the end of the year at the earliest. Initial capital is tentatively set at NT$30 billion (approximately $913.3 million), subject to further refinement. The council will consult the Ministry of Finance, the Central Bank and the Financial Supervisory Commission, with the aim of submitting the bill in the first half of next year.
President Lai Ching-te announced the sovereign wealth fund in his May 20 anniversary speech last year, and the Executive Yuan assigned the National Development Council to lead initial planning. Lawmakers questioned whether progress was lagging more than a year and a half after the announcement. Yeh argued that Taiwan's institutional conditions differ from those of Singapore and South Korea, requiring a special law. He said the new fund will focus mainly on overseas strategic investment in sales channels, critical raw materials and key technologies, while the existing National Development Fund handles domestic investment.
Funding options under consideration include Central Bank foreign exchange reserves, special government bonds from the Ministry of Finance, and corporate bonds issued by the fund company, with channels planned for insurance capital and the four major funds. Yeh stressed that any allocation from reserves or the major funds would be on a paid basis, excluding government fiscal surpluses, consistent with Central Bank Governor Yang Chin-long's position. On governance, Yeh said Taiwan will draw on the Korea Investment Corporation's experience without necessarily copying its model. Lawmakers urged the fund to pursue "seeking quality, not speed" and asked the council to accelerate inter-ministerial coordination.
The session also addressed the National Development Fund's Angel Investment Program. According to a Ministry of Audit investigation cited by lawmakers, as of September the program had invested in 245 companies, 71 of which had unrealized losses exceeding one-third of cost, totaling NT$930 million (approximately $28.3 million). Among 17 companies invested in for under five years, 15 had cumulative losses above half of paid-in capital as of end-June, and three had negative shareholder equity with going-concern doubts raised by accountants. Lawmakers noted that angel investors and mentors had made only one visit to these 17 companies in total.
Yeh said early-stage losses are understandable and that the portfolio's overall profit of about NT$37 million (approximately $1.1 million) reflects the program's broader goal of nurturing startups. He acknowledged room for improvement, citing an A-to-D four-tier classification system based on listing status and investment gains, and cooperation with the Taipei Exchange on guidance. He promised a review report within one month. Analysts-level commentary in the source suggests the angel program controversy will not affect the sovereign fund's legislative timetable in the short term, though risk control and disclosure in startup investment are likely to remain under legislative scrutiny.
President Lai Ching-te announced the sovereign wealth fund in his May 20 anniversary speech last year, and the Executive Yuan assigned the National Development Council to lead initial planning. Lawmakers questioned whether progress was lagging more than a year and a half after the announcement. Yeh argued that Taiwan's institutional conditions differ from those of Singapore and South Korea, requiring a special law. He said the new fund will focus mainly on overseas strategic investment in sales channels, critical raw materials and key technologies, while the existing National Development Fund handles domestic investment.
Funding options under consideration include Central Bank foreign exchange reserves, special government bonds from the Ministry of Finance, and corporate bonds issued by the fund company, with channels planned for insurance capital and the four major funds. Yeh stressed that any allocation from reserves or the major funds would be on a paid basis, excluding government fiscal surpluses, consistent with Central Bank Governor Yang Chin-long's position. On governance, Yeh said Taiwan will draw on the Korea Investment Corporation's experience without necessarily copying its model. Lawmakers urged the fund to pursue "seeking quality, not speed" and asked the council to accelerate inter-ministerial coordination.
The session also addressed the National Development Fund's Angel Investment Program. According to a Ministry of Audit investigation cited by lawmakers, as of September the program had invested in 245 companies, 71 of which had unrealized losses exceeding one-third of cost, totaling NT$930 million (approximately $28.3 million). Among 17 companies invested in for under five years, 15 had cumulative losses above half of paid-in capital as of end-June, and three had negative shareholder equity with going-concern doubts raised by accountants. Lawmakers noted that angel investors and mentors had made only one visit to these 17 companies in total.
Yeh said early-stage losses are understandable and that the portfolio's overall profit of about NT$37 million (approximately $1.1 million) reflects the program's broader goal of nurturing startups. He acknowledged room for improvement, citing an A-to-D four-tier classification system based on listing status and investment gains, and cooperation with the Taipei Exchange on guidance. He promised a review report within one month. Analysts-level commentary in the source suggests the angel program controversy will not affect the sovereign fund's legislative timetable in the short term, though risk control and disclosure in startup investment are likely to remain under legislative scrutiny.
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