90 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 43 | 2025 requires three key actions: streamlining the government’s confusing bureaucracy involved in boosting start-ups; strengthening domestic angel and VC networks to bridge the funding gap; and relaxing foreign investment caps and restrictions to build trust and relationships with foreign investors who have historically turned to more accommodating nations, such as Singapore and South Korea. Streamlining government organization With nine government departments overseeing various aspects of the start-up process, limited policy implementation and lack of cohesiveness introduce barriers for entrepreneurs, investors, and other stakeholders. However, Taiwan can make several targeted reforms in a concerted government effort to create a vibrant ecosystem. First, Taiwan can establish a centralized start-up and innovation authority to consolidate oversight and streamline processes. Rather than dismantling the existing framework that delegates responsibilities across numerous departments and ministries, this organization could serve under the NDC as the primary point of contact for start-ups, investors, and stakeholders. The implementation of a new authority could be seen as encroaching on jurisdictional boundaries; other departments may fear a loss of the influence or funding they receive from the existing decentralized system. Although valid concerns, positioning the entity within the NDC would allow it to leverage the NDC’s expertise in economic strategy and coordination without overextending the council’s existing commitments to ASVPD 3.0. NDC’s established relationships with these departments will facilitate planning and smooth implementation. Additionally, although the proposals mentioned above can mitigate several weaknesses in the existing framework, communication channels need improving. The existing Startup Portal Taiwan, operated by the Small and Medium Enterprise and Startup Administration (2025) under the Ministry of Economic Affairs, offers a useful model. The portal provides a cohesive single hub for visas, incorporation processes, funding opportunities, incubators and accelerators, and municipality programs, together with links for searching for funding and responses to common inquiries (https://startup.sme. gov.tw/home/). The proposed centralized authority would build on this foundation, expanding coordination across all nine different departments to provide comprehensive resources and contacts. A third initiative would be to introduce policy reviews and regular stakeholder consultations to improve policy effectiveness. To date, the dominant player in start-up capital matters has been the government through its control of private markets, organization of incubators and accelerator programs through state-run science parks, and restrictions on foreign ownership, all with minimal private sector input— hardly free-market approaches. Creating channels for investors and start-ups to participate in policy development, regulatory and procedural reforms would streamline approvals and boost capital flow. A dedicated advisory structure should include representatives from key government departments (listed in Table 1). Major banks’ representatives would create bridges to the available pool of capital. Likewise, science parks, incubators, accelerators, and start-ups should be represented. All parties have strong incentives to cooperate, given how funding gaps and bureaucratic inefficiencies have stifled the ecosystem. This diverse group would identify and eliminate regulatory redundancies, resolve conflicting policies across agencies, and ensure regular policy updates as the start-up landscape evolves. However, Taiwan has completely ignored the bureaucratic fragmentation thus far. Progress includes amending the Mergers and Acquisitions Act (2016), to provide greater flexibility and certainty for both the government and investors, and relaxing FSC restrictions on onshore PE funds (US–Taiwan Business Council, 2020). The recommendations build on existing efforts and provide a generalized framework to streamline government processes. Strengthening domestic angel investing The other major issue facing Taiwan is the funding gap for domestic start-ups, primarily in the Series A and Series B financing phases, a consequence of the tense geopolitical relationship with China and associated PE and VC investment fluctuations, as discussed previously. Taiwan must reduce its reliance on Chinese capital by developing both domestic and foreign alternatives. Domestic investors are the focus of this section, followed by discussion of international investors. Domestic angel investors bridge the crucial gap from incubators and accelerators to VC funding (Lange et al., 2024). Taiwan has an extremely strong incubator and accelerator infrastructure—including the Taipei Tech Innovation and Incubation Center; Startup Terrace; SparkLabs Taipei; 500 Global Accelerator Taiwan (Seridis, n.d.); and science parks in Hsinchu, Taichung, Tainan, and Kaohsiung (Ministry of Economic Affairs, n.d.). Even so, the total value and number of VC investments declined from 2020
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