The Bank has introduced extensive reforms, beginning with a large-scale relaxation of its foreign exchange regulations in 1987.
Major reforms included:

Lifting Limits on Foreign Exchange Positions

In order to prevent authorized banks from excessive exposure to exchange rate risks, the Bank previously set ceilings for each
authorized bank's overbought and oversold positions in accordance with the volume of its foreign exchange transactions. From July 1, 1996 onwards, each authorized bank has been allowed to determine its own overbought and oversold positions subject to the approval of the Bank.

Developing Foreign Exchange Derivatives Markets

Since 1984, the Bank adopted a series of measures to significantly relax its controls over forward transactions and authorized banks were allowed to determine their own forward exchange rates. On December 16, 1996, the Bank completely opened up the forward market. In addition to forwards, currently, various types of foreign exchange related derivatives are available, including futures, swaps, and options etc.

Capital Flows Management

Since July 1987, the CBC has actively deregulated the foreign exchange controls on capital movements.  Currently, capital movements are completely liberalized.   

 1. Cash flows not involving the conversion of New Taiwan dollars are completely liberalized.  

 2. Cash flows involving the conversion of New Taiwan dollars:

      (1) Inward and outward remittances related to  foreign trades in goods are completely liberalized.

      (2) Inward and outward remittances related to services are completely liberalized.

      (3) Direct investments and portfolio investments approved by the competent authorities are  also completely liberalized.

      (4) Other regulations:

        A. Total annual remittance not exceeding USD 5 million by a natural person and total  annual remittance not exceeding USD 50 million by a juridical person may proceed directly through authorized banks.  Total remittance exceeding the said amounts requires CBC’s prior approval.

        B.  A single remittance not exceeding USD 100,000 by a non-resident may proceed directly through authorized banks.  Otherwise  CBC’s prior approval is required.

3. In short, there are effectively no foreign exchange restrictions in Taiwan now.

4. Foreign Portfolio Investments

     The managing system on QFII was abolished on October 2, 2003.  Foreign investors investing in domestic securities are classified into “Foreign Institutional Investors (FINI)” and “Foreign Individual Investors (FIDI)”.  There is no limit on the total investment amount of any FINI or FIDI.  Once registered with the Taiwan Stock Exchange Corporation, capital flows relating to foreign portfolio investment in Taiwan are completely liberalized.  A foreign investor in Taiwan’s equity market is free to choose any authorized foreign exchange bank to conduct foreign exchange transactions.