If Taiwan had more modern banking and financial systems, would it receive more foreign investment?

Most of these companies are there for tax reasons and cross border transactions. For tax heavens an established society like Taiwan compared to a city state is hard to make work. It would look more something like what Malaysia has setup with Labuan. A lot of the HKG business will simply go away as well with the tightened KYC requirements and new tax treaties making offshore run companies less desirable.

The business tied with cross border transactions will be harder to move. A lot of Chinese companies run their business with a Hong Kong off shore entity, ie you order parts from a Chinese company but pay money to Hong Kong. This business will not move to Taiwan due to security concerns and tensions between China and Taiwan

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I don’t really care about becoming HK. Foreign capital rushes into the stock market with no problem when the economy is good.

I just don want it to become an impediment to foreign direct investment, which has been copious in recent years too.

Nvidia will move its logistics center from HK to Taiwan.

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