Does the Financial Supervisory Commission plan to distribute dividends in US dollars? Foreign investors holding companies such as TSMC emerge as the biggest winners

Taiwan is reportedly assessing whether to allow publicly listed companies to pay dividends directly in U.S. dollars, changing the current requirement that dividends must be paid in New Taiwan dollars. This move is expected not only to reduce foreign investors’ currency-exchange costs and attract more international capital to deploy in Taiwan stocks, but also to potentially ease short-term fluctuations in the New Taiwan dollar exchange rate that arise during each year’s dividend peak. However, the timeline for the policy to be formally implemented remains unclear, and it is expected to be difficult to make it in time for this year’s July dividend-payment peak.

(Foreign investors sold Taiwan stocks heavily in March; the central bank intervened to prevent the New Taiwan dollar from weakening; Taiwan’s foreign exchange reserves fell below $600 billion)

Foreign enterprises’ currency-exchange costs have become a pain point; industry proposals seek to push for reform

According to a report by Bloomberg, Taiwan’s Financial Supervisory Commission (FSC) is currently evaluating the specific operational details of “paying dividends directly in U.S. dollars,” but the implementation timeline is still not determined. Insiders revealed that the proposal was put forward by Taiwanese companies that hold large U.S. dollar positions and have a higher proportion of foreign ownership.

Under the current system, companies that earn U.S. dollar revenue must first convert the funds into New Taiwan dollars in order to pay dividends. After receiving the dividends, foreign shareholders must also immediately convert the funds back into U.S. dollars for overseas remittance, creating double currency-exchange frictions and increasing transaction costs. Industry players supporting the reform believe that if direct U.S.-dollar dividend payments are allowed, foreign exchange losses can be eliminated at the root.

Dividend-season exchange-rate volatility is expected to be eased; TSMC and other large foreign shareholders are set to benefit the most

In addition, every time the dividend season arrives, large-scale demand for exchanging New Taiwan dollars into other currencies is often released in a short period, causing abnormal exchange-rate fluctuations. This phenomenon is also common in Asian markets such as South Korea, where foreign ownership ratios are similarly relatively high. If the new system goes into effect, spreading out currency-exchange demand will help smooth out seasonal exchange-rate swings.

The total dividends announced for fiscal year 2025 by Taiwan listed companies are as high as about NT$2.2 trillion (, or about 700 billion U.S. dollars ), with TSMC (TSMC) being one of the largest contributors. According to Financial Supervisory Commission data, as of last year, foreign investors held a 45% share of Taiwan stocks, showing that the potential benefits from the new system are not to be underestimated.

Local investors may end up bearing the inconvenience of currency exchange; regulatory support still needs to be established

However, the new system could also give rise to many controversies. For example, if Taiwan’s local retail investors receive dividend payments in U.S. dollars, they would instead have to convert them into New Taiwan dollars themselves, adding extra steps and frictional costs compared with the current system.

At the same time, introducing a dual-currency dividend system with both New Taiwan dollars and U.S. dollars will bring new challenges to brokers, the operating systems of stock affairs agents, and regulatory compliance. Whether regulatory support measures can be put in place in time will be the key to whether the policy can be rolled out smoothly. The Financial Supervisory Commission currently refuses to respond to this.

The emergence of this policy discussion reflects Taiwan’s strategic thinking to actively reduce frictions for foreign investors entering and exiting during a period of U.S. dollar strength, and to enhance the international competitiveness of its capital market. Against the backdrop of Asian competitive markets such as South Korea and Japan successively pushing reforms to their capital markets, Taiwan’s move is viewed as an important step toward strengthening the appeal of Taiwan stocks to global institutional investors.

This article “Is the FSC Drafting ‘Dividends Paid in U.S. Dollars’? Companies with High Foreign Holdings Like TSMC Will Be the Biggest Beneficiaries” first appeared on Link News ABMedia.