Newsletter
Key Amendments to Taiwan’s Telecommunications and Broadcasting Laws in 2026 and Their Practical Implications
In 2026, Taiwan enacted a series of significant amendments to its telecommunications and broadcasting laws. On 21 July, the Legislative Yuan passed amendments to the Telecommunications Management Act, easing the chairperson-nationality and foreign-shareholding restrictions applicable to low-earth-orbit (LEO) satellite operators. Separately, the “party-government-military clause” under the three broadcasting acts was relaxed through a series of third readings beginning in early 2026, replacing the more than two-decade-old absolute prohibition (“not a single share”) with a 1% cap on the government’s indirect shareholding. One set of amendments opens the market outward while the other eases restrictions internally; both will have far-reaching effects on market entry, fundraising and M&A planning for the businesses concerned. This article outlines the key points of the amendments and their practical implications.
I. Amendments to the Telecommunications Management Act: Easing Nationality and Foreign-Investment Limits for LEO Satellites
(1) Background and legislative purpose. Recent repeated damage to Taiwan’s submarine cables has highlighted the vulnerability of relying on a single communications infrastructure. To strengthen communications resilience and introduce backup capacity from LEO satellites such as SpaceX’s Starlink, the amendments relax the existing foreign-investment restrictions applicable to satellite communications operators.
(2) Key points. Under the current rules, an operator using telecom resources to establish a public telecommunications network must have a chairperson holding ROC nationality, and foreign direct shareholding may not exceed 49%, with direct and indirect shareholding combined not exceeding 60%. The amendments (Articles 36 and 95) provide that satellite communications network operators, such as LEO satellite operators, may — upon approval by the competent authority, the National Communications Commission (NCC) — be exempted from the foregoing chairperson-nationality and foreign-shareholding-ratio restrictions. In its review, the NCC must take into account factors including national security, network security, the allocation of telecommunications resources, overall planning, and industry and market development.
(3) National-security and cybersecurity safeguards. To balance openness with security, a supplementary resolution requires that, when granting approval, the NCC treat as mandatory conditions that the satellite ground receiving stations and the data be located within our territory, and that coordination on cybersecurity, data governance and communications interception, as well as disaster-prevention and relief mechanisms, be strengthened.
(4) Practical implications. The amendments will allow satellite communications operators with foreign shareholding exceeding 60% — or even chaired by a foreign national — to establish and provide services in Taiwan upon approval. It should be noted that the “localization” requirement means operators must still build ground receiving stations within Taiwan and store the relevant data domestically, and comply with communications-interception and cybersecurity rules; the actual construction costs and compliance burden must be factored in as well. For incumbent telecommunications operators, the introduction of LEO satellite backup may also drive cooperation or competition with international operators, warranting an early assessment of strategic positioning.
II. Amendments to the Cable Radio and Television Act: Relaxing the Party-Government-Military Clause to a 1% Cap on Government Indirect Shareholding
(1) Background. Since 2003, the “party-government-military clause” has prohibited the government, political parties and the foundations they endow from investing, directly or indirectly, in cable television system operators, adopting an absolute prohibition under which not a single share may be held. However, in the capital markets, government funds such as the National Development Fund and the Labor Pension Fund routinely purchase shares in listed companies; under the absolute prohibition, any company in which such government funds had invested was deemed to carry “party-government-military capital,” with the result that virtually all large publicly held enterprises were unable to invest in media. This restriction has long impeded cable operators’ fundraising, listing and M&A, and has on several occasions led the competent authority to reject M&A cases or forced operators to divest their holdings.
(2) Key points. The amendments change the original absolute prohibition into one permitting “purely financial indirect investment that does not amount to substantive control”: the government, the foundations it endows and their trustees may not, by indirect investment or by other means, achieve control over the personnel, finances or business of a system operator. Where any such entity individually holds indirectly more than 1% of the operator’s total issued shares, or where their indirect holdings in the aggregate exceed 1%, this is deemed to amount to control. In other words, save for the exceptions provided by law, indirect holdings within 1% — whether measured individually or in the aggregate — are, in principle, not deemed to constitute control on the basis of the shareholding ratio; however, achieving substantive control over a system operator by other means remains prohibited. Shares held by government funds or state-owned enterprises through their own investment, or through investment entrusted to securities investment trust enterprises, are not counted toward the foregoing 1% threshold.
As for political parties, the foundations they endow and their trustees, both their direct and indirect investment remain prohibited, and they do not enjoy the foregoing 1% headroom. The government, the foundations it endows and their trustees likewise may not invest directly, nor serve as a promoter, director, supervisor or manager of a system operator; and where a state-owned enterprise serves in any of the foregoing positions, this too is deemed a case of the government achieving control over the system operator. Shares acquired in violation of these provisions carry no voting rights; and where the competent authority has ordered their disposal within a prescribed period and they are not disposed of by the deadline, they confer no shareholder rights.
It should be noted that this relaxation of the party-government-military clause was effected separately across the three broadcasting acts, rather than all at once: the Satellite Broadcasting and Television Act was the first to pass its third reading, in January 2026; the Cable Radio and Television Act on 28 July of the same year; and the Radio and Television Act (Articles 5-1 and 44-2) on 4 August. All three adopt the same relaxation model on the government side (political parties’ investment remaining prohibited), bringing the party-government-military rules across the three acts into alignment. However, although the relaxation of the party-government-military clause reflected a consensus among the major political parties following numerous unreasonable penalties in the past, in view of the current profound disagreements between the governing and opposition camps over certain other issues addressed in the same round of amendments, the executive branch has been unwilling to countersign the amended laws. As of the date of writing, the Executive Yuan has declined to countersign both the Satellite Broadcasting and Television Act and the Cable Radio and Television Act (citing, among other grounds, the need for consistency across the regulatory regime, the avoidance of potential constitutional concerns, and the principle of equality), while its position on the Radio and Television Act remains to be seen.
(3) Practical implications. If the countersignature issue can be resolved and the new laws are promulgated by the President, the amendments will enable cable operators to raise domestic and foreign capital and pursue strategic cooperation more smoothly, and will substantially reduce the risk of inadvertent violations arising from government funds’ “unintended shareholding.” M&A and consolidation cases previously stalled by the party-government-military clause (such as the integration of telecommunications operators with cable systems, or large enterprises taking stakes in media businesses) may find room for resolution, and operators’ future listing applications will also be facilitated. Nonetheless, the 1% cap, the bar on direct investment, and the prohibition on serving as a director or supervisor remain in place; in planning their shareholding structures and M&A architectures, operators should still carefully review the shareholding ratios and operating arrangements of government funds to avoid crossing the threshold and constituting “control.”
(4) Further observations — the binding constraint shifts from “party-government-military” to “market concentration.” The relaxation of the party-government-military clause removes only the obstacle of shareholding “lineage”; it does not automatically exempt operators from the “horizontal” limits under the Cable Radio and Television Act — namely, under Article 24, paragraph 1, that the combined number of subscribers of a system operator, together with its affiliated enterprises and the system operators it directly or indirectly controls, may not exceed one-third of the total number of subscribers nationwide. The separation of Taiwan Mobile and kbro caused in the past by the party-government-military clause has, following the relaxation, given rise to greater speculation about a possible combination of the two; however, because their post-combination market share would already approach one-third — and considering the impact that emerging streaming media has had on cable television systems in recent years — whether the horizontal cap under the Cable Radio and Television Act will become the next focus of legislative reform is worth watching.
III. Conclusion
The purpose of the two sets of amendments — opening the market outward to LEO satellites to strengthen national communications resilience, and easing the party-government-military clause internally to invigorate the capital dynamics of the broadcasting industry — reflects Taiwan’s legislative orientation of “balancing openness and national security” in the era of digital convergence. That said, the relaxation of the party-government-military clause has once again become entangled with other major issues in the broadcasting and media field; whether the new laws can ultimately be resolved and brought into force remains to be seen.