Taiwan Weighs Allowing U.S. Dollar Dividends as Central Bank Sees Currency Benefit

Taiwan-listed companies have traditionally paid dividends mainly in New Taiwan dollars, but foreign investors often need to convert and remit the funds overseas, causing currency-market volatility. The Financial Supervisory Commission is considering allowing listed companies to pay dividends directly in U.S. dollars, primarily targeting foreign-investor favorites such as TSMC that are export-oriented and hold ample dollar reserves. The change would be significant for Taiwan's capital markets, simplifying cumbersome currency conversions for overseas investors and reducing sharp fluctuations in the New Taiwan dollar during peak dividend season.

Central Bank Governor Yang Chin-long recently backed the proposal, saying it would help stabilize fluctuations in the New Taiwan dollar. The FSC is accelerating work on supporting measures, while major index heavyweights including TSMC have also expressed support. The new system could formally take effect as early as 2027. If implemented, the policy would eliminate frequent foreign-exchange transactions by overseas investors and is expected to ease the depreciation pressure caused by concentrated capital outflows during the third-quarter dividend season each year.