Taiwan's wealth market is drawing significant attention amid the massive investment inflows into the exchange-traded-funds. In an interview with Asian Private Banker, Peggy Chiu and Michael Wong discuss the evolving landscape in Taiwan's wealth management industry and the key issues that are impacting wealth management service providers and high-net-worth individuals.
One of the main issues highlighted is tax. With Taiwan historically being excluded from the Common Reporting Standard network, this has posed a dilemma to financial institutions when it comes to money laundering issues. “They want to do business with Taiwanese clients, but they have to bear a higher risk as opposed to clients of other jurisdictions because some Taiwanese clients may not report their tax return properly," Peggy commented.
However, Taiwan is moving in a direction that requires more transparency. Starting in 2023, Taiwan has also implemented controlled foreign corporation (CFC) rules to prevent tax avoidance.
Michael noted that while more implementation details are needed, the rule has raised questions for banks and trust companies on how to deal with BVI companies set up by existing or new Taiwanese clients from a KYC and AML perspective. “We believe the risk is going to come to sharper focus as the money becomes larger the level of non-compliance becomes more serious", he added.
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One of the main issues highlighted is tax. With Taiwan historically being excluded from the Common Reporting Standard network, this has posed a dilemma to financial institutions when it comes to money laundering issues. “They want to do business with Taiwanese clients, but they have to bear a higher risk as opposed to clients of other jurisdictions because some Taiwanese clients may not report their tax return properly," Peggy commented.
However, Taiwan is moving in a direction that requires more transparency. Starting in 2023, Taiwan has also implemented controlled foreign corporation (CFC) rules to prevent tax avoidance.
Michael noted that while more implementation details are needed, the rule has raised questions for banks and trust companies on how to deal with BVI companies set up by existing or new Taiwanese clients from a KYC and AML perspective. “We believe the risk is going to come to sharper focus as the money becomes larger the level of non-compliance becomes more serious", he added.
Read full article (subscription access required).
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