Tw fintech compliance

Taiwan Fintech Compliance

Framework

IRON LAW: In Fintech, Regulation Comes BEFORE Product

Unlike most tech products where you can launch and iterate, financial
services in Taiwan require LICENSING FIRST. Operating without the proper
license is a criminal offense (not just a fine). Determine your regulatory
category and licensing requirements BEFORE writing code.

FSC Regulatory Framework

金融監督管理委員會 (FSC) oversees all financial services in Taiwan:

Category	Governing Law	License Required	FSC Division
Electronic payment	電子支付機構管理條例	電子支付機構許可	Banking Bureau
Third-party payment	第三方支付服務業管理辦法	Registration (lighter)	Banking Bureau
P2P lending	金融科技發展與創新實驗條例 (sandbox) or crowd-funding rules	Case-by-case	Securities Bureau
Robo-advisory	證券投資信託及顧問法	Investment advisory license	Securities Bureau
Insurance tech	保險法	Insurance broker/agent license	Insurance Bureau
VASP (crypto)	虛擬資產服務提供者管理辦法 (2024)	VASP registration + AML compliance	Securities Bureau
Open banking	金融機構間資料共享指引	API partnership with banks	Banking Bureau

Electronic Payment vs Third-Party Payment

Feature	Electronic Payment (電子支付)	Third-Party Payment (第三方支付)
Stored value	Yes (e-wallet)	No (pass-through only)
P2P transfer	Yes	No
Capital requirement	NT$500M+	NT$5M
License	FSC approval (12-18 months)	Registration (1-3 months)
Examples	LINE Pay Money, JKoPay, icash Pay	綠界 ECPay, 藍新 NewebPay

VASP (Crypto) Regulations (2024+)

Requirement	Detail
Registration	Must register with FSC as VASP
AML/CFT	Full compliance with 洗錢防制法
KYC	Identity verification for all users
Custody	Customer asset segregation required
Marketing	Restrictions on advertising (no promises of returns)
Reporting	Suspicious transaction reports (STR) to 調查局

AML/KYC Requirements (All Financial Services)

KYC Level	When Required	Data Collected
Simplified	Low-risk, small transactions	Name, ID number, DOB
Standard	Account opening, most transactions	+ Address, occupation, source of funds
Enhanced	High-risk customers, PEPs, large transactions	+ Detailed source of wealth, ongoing monitoring

Ongoing obligations:

• Transaction monitoring (unusual patterns)
• Suspicious Transaction Reports (STR) to 法務部調查局
• Sanctions screening (OFAC, UN, EU lists)
• Record keeping: 5+ years after account closure

Regulatory Sandbox (金融科技創新實驗)

Aspect	Detail
Purpose	Test innovative financial services without full licensing
Duration	Up to 18 months (extendable to 36)
Application	Submit to FSC with: innovation description, consumer protection plan, risk assessment
Approval time	60 business days
Scope limitation	Must define user count, transaction limits, geographic scope
Exit plan	Path to full license or orderly shutdown

Open Banking (Three Phases)

Phase	Data Shared	Status
Phase 1	Product information (rates, fees)	Launched 2019
Phase 2	Customer information (with consent)	Launched 2021
Phase 3	Transaction initiation (payment, transfer)	In development

Output Format

# Fintech Compliance Assessment: {Product}

## Product Classification
- Service type: {payment / lending / advisory / crypto / insurance}
- Regulatory category: {electronic payment / third-party / VASP / etc.}
- License required: {specific license name}

## Licensing Pathway
| Step | Action | Timeline | Cost |
|------|--------|----------|------|
| 1 | {step} | {months} | NT${X} |

## AML/KYC Requirements
- KYC level: {simplified / standard / enhanced}
- Transaction monitoring: {required / not required}
- STR reporting: {required / not required}

## Key Risks
| Risk | Impact | Mitigation |
|------|--------|-----------|
| {regulatory risk} | H/M/L | {action} |

## Recommendation
- Proceed with licensing / Use sandbox / Restructure product to avoid licensing

Gotchas

• Third-party vs electronic payment: The distinction is stored value. If your app holds customer money (e-wallet), you need the much heavier electronic payment license (NT$500M capital). If you just process payments (pass money from buyer to seller), third-party registration is sufficient.
• Sandbox is not a shortcut: The sandbox exempts you from licensing temporarily, but you must still comply with AML, consumer protection, and data privacy. And you still need to get a full license to commercialize.
• VASP regulation is new and evolving: The 2024 VASP rules are Taiwan's first comprehensive crypto regulation. Expect amendments and additional guidance. Build compliance infrastructure that's adaptable.
• Foreign fintech entering Taiwan: Foreign companies must establish a Taiwan entity and obtain Taiwan-specific licenses. A license in another jurisdiction does not transfer.
• This is educational guidance, not legal/regulatory advice: Fintech regulation is complex and penalties for non-compliance include criminal charges. Engage a regulatory affairs lawyer specializing in Taiwan financial services.

References

• For FSC licensing application guides, see references/fsc-licensing.md
• For AML/KYC implementation checklist, see references/aml-kyc-checklist.md