Can You Be Acquitted of Illegal Deposit-Taking Charges in Taiwan? Bank Act Articles 29 and 29-1 Explained

2026.10.07

1. What Happened in This Taiwan Illegal Deposit-Taking Case?

The defendant in this case was the representative of a consulting company. According to the case facts, beginning in 2020, the defendant was invited by a financial group to introduce participants to an investment program referred to as “Trust Plan II.”

The investment plan required a minimum investment of US$20,000. Returns were scheduled to be paid every six months, and the investment period ranged from two to ten years.

The plan offered fixed annual returns of 6% for a two-year term, 8% for a three-year term, and 9% for terms of five years or longer. The investment materials reportedly described underlying assets involving high-yield bonds, Hong Kong real-estate mortgages, stock-backed lending, and other investments.

1.1 The Overseas Investment Plan

During the second half of 2020, the defendant held several presentations at an office on Minsheng East Road in Taipei City. The defendant introduced the investment plan to attendees at these meetings. One complainant subsequently chose a three-year investment plan and invested US$30,000, transferring the funds to the relevant account on November 13, 2020.

At first glance, the combination of investment solicitation, a fixed return, and the transfer of investor funds may resemble the type of conduct frequently investigated as illegal fundraising in Taiwan.

➟However, criminal liability under the Bank Act does not arise merely because an investment product promises a return.The prosecution still bears the burden of proving the statutory requirements of the charged offense.

1.2 Why Prosecutors Filed Bank Act Charges

Prosecutors alleged that the defendant violated Articles 29 and 29-1 of Taiwan’s Bank Act by engaging in unauthorized deposit-taking activities. The prosecution also alleged violations of the Securities Investment Trust and Consulting Act relating to unauthorized activities involving offshore funds. These are legally distinct allegations.

Whether conduct constitutes illegal deposit-taking under the Bank Act must therefore be analyzed separately from whether the same conduct violates securities investment trust, consulting, offshore-fund, or other financial regulatory requirements.

➟The Bank Act issue became particularly important because the court concluded that the evidence did not establish the statutory elements necessary for the alleged illegal deposit-taking offense.

2. What Is Illegal Deposit-Taking Under Taiwan’s Bank Act?

Taiwan’s Bank Act generally prohibits persons or entities that are not banks from engaging in the business of accepting deposits.

Article 29 of the Bank Act provides the basic prohibition against unauthorized banking business. Article 29-1 addresses arrangements that may not formally be called “deposits” but are nevertheless treated as deposit-taking when certain conditions are satisfied. This prevents businesses from avoiding banking regulation simply by labeling an arrangement an “investment,” “membership,” “loan,” or another type of transaction.

2.1 Article 29: Unauthorized Banking Business

Under Article 29, unless otherwise provided by law, a non-bank may not engage in the business of accepting deposits, handling domestic or foreign remittances, or conducting other banking activities specified by law.

The policy behind this restriction is straightforward. Banks accept funds from the public and operate within a regulated system involving licensing, supervision, capital requirements, risk controls, and other safeguards. If an unregulated person could repeatedly raise funds from the public in substantially the same manner as a bank, both investors and the broader financial system could face significant risks.

⚠️This is why unauthorized deposit-taking may result in serious criminal liability under Article 125 of the Bank Act.

2.2 Article 29-1: When Fundraising Is Treated as Deposit-Taking

Article 29-1 is particularly important in illegal fundraising cases. The provision is designed to address situations where a person accepts money or raises funds from multiple or unspecified persons and agrees to pay principal or returns that are obviously disproportionate to the principal. When the statutory conditions are satisfied, the conduct may be treated as accepting deposits even if the parties describe the arrangement as an investment rather than a bank deposit.

Accordingly, courts do not decide these cases solely by examining the name of the product.They examine the economic substance and actual method of fundraising.

Questions may include:

how investors were recruited
how broadly the plan was promoted
whether recruitment was repeated and systematic
whether principal or returns were promised
the level of promised returns
the number and characteristics of investors
the scale and duration of the fundraising activity.

2.3 Article 125: Criminal Penalties for Unauthorized Deposit-Taking

Article 125 of the Bank Act provides criminal penalties for unauthorized banking activities prohibited under Article 29.

Because the potential criminal consequences are severe, courts must determine whether the prosecution has established each statutory element rather than treating every unsuccessful or high-return investment as unauthorized deposit-taking.

A failed investment, contractual dispute, delayed repayment, or investment loss may create civil or other regulatory issues without necessarily establishing a Bank Act offense. The criminal inquiry remains focused on whether the defendant’s actual conduct satisfies the requirements established by the Bank Act.

3. What Does “Multiple or Unspecified Persons” Mean?

One of the central disputes in this case concerned the requirement involving the solicitation or receipt of funds from “multiple or unspecified persons.”

This phrase cannot be evaluated solely by counting investors. Taiwan court decisions have emphasized the overall character of the activity, including the number of participants, duration and amount of fundraising, characteristics of the investors, solicitation methods, and whether the activity resembles the operation of a deposit-taking business.

3.1 Number of Investors Is Not the Only Factor

There is no simple rule stating that a particular number of investors automatically establishes or excludes illegal deposit-taking.

Instead, courts examine whether the fundraising activity, viewed as a whole, has reached a scale and form that implicates the financial-order concerns protected by the Bank Act.

For example, a scheme involving public advertising, repeated seminars open to the general public, referral commissions, extensive recruitment networks, social-media promotion, or continuous solicitation of new participants may support an inference that funds were being raised from multiple or unspecified persons. By contrast, a transaction involving a limited and identifiable group of people connected through existing relationships may require a different analysis.

➟The key issue is the nature and scope of the fundraising activity, not merely the final headcount.

3.2 Public and Systematic Solicitation

Public accessibility and systematic recruitment can be important indicators. Examples may include extensive advertising through mass media or online platforms, open seminars that anyone can attend, recurring presentations designed to attract new investors, referral systems that reward participants for recruiting others, or other methods designed to continuously expand the investor pool.

Such arrangements can resemble public fundraising because the organizer is not merely dealing with a fixed group of known individuals.

Instead, the structure itself is designed to attract additional members of the public. That distinction is relevant to the Bank Act’s purpose of preventing unregulated entities from accumulating public funds in a manner resembling banking activity.

3.3 Private Investment Among a Limited Group

The analysis may be different where the investment opportunity is introduced only to a limited number of identifiable persons with pre-existing relationships.

Private borrowing or investment arrangements do not automatically become illegal deposit-taking simply because they include an agreement concerning principal and returns. If there is no continuing effort to expand the investor base to the public, no broad advertising, no open recruitment mechanism, and no systematic fundraising structure, the prosecution may face greater difficulty establishing that the activity falls within the type of public fundraising contemplated by Articles 29 and 29-1.

However, “friends and acquaintances” is not an automatic defense. A court must still examine the true scale, recruitment structure, number of participants, repetition, funding amounts, and other evidence.

4. Why Did the Court Find the Solicitation Element Unproven?

In this case, the court concluded that the evidence did not sufficiently establish the type of broad fundraising activity contemplated by the Bank Act. Several factual considerations were important.

4.1 Limited and Identifiable Participants

The participants attending the defendant’s presentations were relatively limited and identifiable.

Only one complainant had formally brought the accusation in the case. Although the complainant stated that approximately ten other victims might have existed, the court noted that the record did not contain sufficient evidence substantiating that assertion. Even assuming that approximately ten investors existed, the court was not persuaded, based on the circumstances presented, that the number and nature of the participants demonstrated fundraising from the broader public in the sense contemplated by Article 29-1.

This did not create a general rule that ten investors can never constitute “multiple persons.” Instead, the number was evaluated together with the manner of recruitment and the relationships among participants.

4.2 Small Private Seminars Rather Than Broad Public Advertising

The defendant reportedly conducted approximately three or four presentations in a small office on Minsheng East Road in Taipei. Each session involved roughly ten attendees, and many participants were acquaintances connected through insurance brokers.

The court distinguished these facts from a scheme involving broad public advertising or systematic, repetitive solicitation directed toward an open and continuously expanding group of investors. There was no sufficient showing, based on the evidence discussed by the court, of large-scale media promotion, unrestricted public seminars, or a recruitment network designed to continuously attract members of the general public.

➟The limited setting and recruitment structure therefore weighed against the prosecution’s characterization of the activity as unauthorized public deposit-taking.

4.3 Investor Information and Independent Investigation

The complainant’s conduct before investing also formed part of the court’s overall analysis.

According to the case facts, the complainant did not immediately invest solely because of the promised return. Instead, the complainant investigated the relevant company, asked questions, consulted others, and attempted to understand the investment and its risks. The court considered this in evaluating whether the circumstances resembled the type of indiscriminate high-return solicitation that may cause members of the public to commit funds without adequate information.

Investor sophistication or independent investigation does not itself determine whether a Bank Act offense exists. The statutory focus remains on the defendant’s conduct. Nevertheless, in this particular case, the complainant’s information-gathering and risk assessment were part of the factual circumstances the court considered when evaluating the overall nature of the investment solicitation.

5. What Does “Returns Obviously Disproportionate to the Principal” Mean?

Another central element was whether the promised return was “obviously disproportionate to the principal.” This requirement is sometimes misunderstood.

A return does not automatically become criminal merely because it exceeds the interest rate offered by a bank savings or time-deposit account. At the same time, a return is not automatically lawful merely because it falls below a civil-law interest ceiling. The determination requires a contextual comparison.

5.1 Promised Returns Must Be Evaluated in Context

When deciding whether promised bonuses, interest, dividends, or other returns are obviously disproportionate to the principal, courts may consider the economic and social conditions at the relevant time. The promised return may be compared with rates offered by legitimate financial institutions, bond markets, and other lawful financial products. Applicable civil-law limits on agreed interest may also be relevant as one reference point.

The purpose of the inquiry is to determine whether the promised return is so unusually attractive that it can induce members of the public to abandon regulated financial channels and pursue extraordinary returns, creating the risk of large-scale absorption of public funds.

⚠️Accordingly, no single percentage should automatically determine the outcome in every case.

5.2 Why the 6%–9% Returns Were Important in This Case

The investment plan at issue reportedly offered annual fixed returns of 6% for a two-year term, 8% for a three-year term, and 9% for terms of five years or longer. These rates were higher than ordinary New Taiwan dollar time-deposit rates offered by Taiwanese banks during the relevant period. That comparison supported scrutiny.

However, the court did not conclude that the difference alone was sufficient to establish that the returns were “obviously disproportionate” to the principal within the meaning of Article 29-1. The court considered the rates together with the investment structure, contemporary financial conditions, investor behavior, and other circumstances.

The complainant continued investigating and asking questions before investing, which also suggested that the offered rate had not simply eliminated the complainant’s awareness of investment risk.

5.3 Why the Former 20% Civil-Law Interest Ceiling Was Not the Only Test

The case also referred to the former version of Article 205 of Taiwan’s Civil Code, under which the maximum agreed annual interest rate had previously been 20% before the amended provision took effect on July 20, 2021.

The investment returns of 6% to 9% were substantially below that former ceiling. However, this comparison should not be misunderstood. The Civil Code interest ceiling is not a safe harbor under the Bank Act. A return below the civil-law ceiling does not automatically mean that Article 29-1 cannot apply.

Conversely, exceeding an ordinary bank deposit rate does not automatically establish illegal deposit-taking. The court’s task is to assess the overall circumstances and determine whether the promised return is obviously disproportionate to the principal in the statutory sense.

6. Why Did the Court Acquit the Defendant?

The acquittal resulted from the court’s assessment of the prosecution’s evidence against the statutory requirements.

The court did not announce a broad rule that investment seminars, fixed returns, or privately introduced investment opportunities can never violate the Bank Act. Instead, it concluded that the evidence in this particular case did not establish the charged offense to the degree required for a criminal conviction.

6.1 The Fundraising Structure Did Not Clearly Fit Article 29-1

The court questioned whether the defendant’s conduct constituted systematic and repetitive solicitation from multiple or unspecified persons.

The presentations were limited in number and size. Participants were largely connected through existing professional or personal relationships. The evidence did not establish a broad public advertising campaign or an open-ended mechanism for continuously expanding the investor pool.

➟Viewed together, these circumstances created doubt as to whether the defendant’s conduct constituted the type of public fund-raising activity addressed by Article 29-1.

6.2 The Promised Returns Did Not Clearly Satisfy the Statutory Threshold

The court also found room for doubt as to whether annual fixed returns of 6% to 9%, under the circumstances of this case, constituted returns obviously disproportionate to the principal.The rates were higher than ordinary bank time-deposit rates, but that fact was not treated as conclusive.

The court considered the overall investment structure, applicable financial conditions, relevant interest-rate comparisons, and the complainant’s conduct before investing.

➟As a result, the prosecution did not sufficiently establish this element to support a criminal conviction.

6.3 Criminal Liability Requires Proof Beyond a Reasonable Doubt

This is the broader criminal-procedure principle illustrated by the case.

The seriousness of a financial loss or the fact that an investment ultimately failed does not reduce the prosecution’s burden of proof. A court cannot convict simply because an investment arrangement appears suspicious in hindsight. The prosecution must prove that the defendant’s actual conduct satisfies each element of the charged Bank Act offense beyond a reasonable doubt.

💡Where the evidence leaves reasonable doubt as to whether funds were raised from multiple or unspecified persons in the required manner, or whether the promised returns were obviously disproportionate to the principal, an acquittal may result.

7. What Does This Acquittal Mean for Taiwan Investment and Fundraising Cases?

This decision is important because it illustrates the boundaries of Bank Act criminal liability. The Bank Act protects Taiwan’s financial system and members of the public from unauthorized deposit-taking. But those policy objectives do not eliminate the need to prove the specific statutory elements in an individual criminal case.

7.1 Investment Loss Does Not Automatically Equal Illegal Deposit-Taking

An investment that loses money does not automatically become an illegal deposit-taking scheme. Likewise, a dispute over repayment does not by itself establish a Bank Act offense. Courts must distinguish among criminal illegal fundraising, other financial regulatory violations, fraud, ordinary investment risk, and civil contractual disputes.

The legal classification depends on how the funds were solicited, what representations were made, how returns were structured, whether principal repayment was promised, who was targeted, and what the defendant actually did.

7.2 Investor Sophistication Is Relevant but Not Decisive

This case also demonstrates that an investor’s conduct can form part of the factual context.

If an investor independently investigates a product, consults professionals, requests information, and evaluates risk, those facts may help a court understand how the solicitation actually operated. However, investor sophistication is not a blanket defense. A sophisticated investor can still be the victim of an unlawful fundraising scheme.

Similarly, the existence of inexperienced investors does not automatically establish every element of Article 29-1. The focus remains on the entire fundraising structure and the defendant’s conduct.

7.3 Each Defendant’s Actual Conduct Must Be Examined

Financial crime cases frequently involve multiple participants: company representatives, lecturers, introducers, sales personnel, referral agents, fund recipients, account holders, financial consultants, and organizers.

⚠️Those labels do not automatically establish equal criminal responsibility. A defense should determine what each person actually did.

Did the defendant design the investment plan?
Receive the funds?
Control the accounts?
Promise repayment?
Set the return?
Recruit investors?
Receive commissions?
Publish advertisements?
Organize seminars?
Know how the funds would be used?

➟These distinctions may significantly affect whether Bank Act liability can be established.

8. How Can a Taiwan Bank Act Lawyer Defend an Illegal Fundraising Case?

A Bank Act defense should begin with the actual fundraising structure rather than the label used in the indictment.

When prosecutors allege illegal deposit-taking, the defense may need to reconstruct the entire network of solicitation, money flows, contractual arrangements, promised returns, and communications with investors.

8.1 Reconstructing the Solicitation Network

One of the first questions is who was actually solicited.

Evidence may include seminar attendance lists, LINE conversations, emails, social-media posts, advertisements, referral records, commission structures, presentation materials, investor contracts, customer lists, and testimony concerning how each investor learned about the opportunity.

The defense should determine whether the investment was publicly available or limited to a defined group. It should also examine whether recruitment was isolated or continuous, whether investors were encouraged to recruit additional participants, and whether the defendant personally engaged in the alleged solicitation.

⚠️This evidence can be critical to the “multiple or unspecified persons” analysis.

8.2 Comparing Returns and Financial Market Conditions

Where prosecutors rely on Article 29-1, the promised return should also be analyzed carefully. A meaningful comparison may require reviewing interest rates and financial market conditions during the relevant period rather than using present-day rates.

The structure of the return also matters. The defense may need to distinguish guaranteed principal and interest from projected investment returns, conditional distributions, dividends, variable performance-based returns, or other forms of compensation. The terminology used in promotional materials is relevant, but courts may examine the substance of the arrangement rather than relying solely on labels.

8.3 Separating Bank Act Liability From Other Financial-Law Issues

A defendant may face more than one type of financial-law allegation arising from the same investment activity. For example, conduct may raise questions under the Bank Act, Securities Investment Trust and Consulting Act, Securities and Exchange Act, criminal fraud provisions, or other regulatory statutes. An acquittal under the Bank Act does not automatically resolve every other possible allegation. Each statute has its own elements.

Accordingly, a financial crime defense should identify exactly what conduct supports each charge and challenge the evidence offense by offense.

9. Frequently Asked Questions About Illegal Deposit-Taking in Taiwan

Q1: Can a defendant charged with illegal deposit-taking under Taiwan’s Bank Act be acquitted?

Yes. A Bank Act charge does not guarantee conviction. Prosecutors must prove the statutory elements beyond a reasonable doubt. If the evidence does not establish the required fundraising structure, solicitation from multiple or unspecified persons, disproportionate returns, or other necessary elements, an acquittal may be possible depending on the case.

Q2: Does promising a fixed investment return automatically violate the Bank Act?

No. A fixed return is relevant but does not automatically establish illegal deposit-taking. Courts must examine the complete structure of the arrangement and determine whether the requirements of Articles 29 and 29-1 are satisfied.

Q3: How many investors are required to constitute “multiple persons”?

There is no universal numerical threshold that automatically determines every case. Courts may examine the number and characteristics of investors, fundraising period, amounts collected, solicitation methods, repetition, public accessibility, and whether the activity resembles the operation of a deposit-taking business.

Q4: Is a private investment among friends automatically exempt from the Bank Act?

No. Existing personal or professional relationships may be relevant, but they are not an automatic exemption. Courts still examine the true scope of recruitment, number of participants, solicitation methods, investment structure, promised returns, and other evidence.

Q5: Is an annual return of 6%, 8%, or 9% automatically legal?

No. There is no rule that these percentages are automatically lawful. Whether a return is “obviously disproportionate to the principal” must be evaluated according to the circumstances of the case, including contemporary financial conditions and relevant market comparisons.

Q6: If the promised return is below the Civil Code interest ceiling, does that mean there is no Bank Act violation?

No. The civil-law interest ceiling may be one reference point, but it is not a Bank Act safe harbor. Bank Act liability requires an independent analysis under the statutory requirements of Articles 29 and 29-1.

Q7: Does an investment loss mean the promoter committed illegal fundraising?

Not necessarily. Investment loss alone does not establish illegal deposit-taking. Depending on the facts, a failed investment may involve ordinary investment risk, civil liability, fraud, regulatory violations, or Bank Act issues. The evidence must be analyzed separately for each potential offense.

Q8: Does investor sophistication prevent a Bank Act conviction?

No. Investor experience, independent investigation, and risk awareness may be relevant factual considerations, but they do not independently determine whether a Bank Act offense occurred.

Q9: What evidence is important when defending an illegal fundraising case?

Important evidence may include investment contracts, promotional materials, seminar records, attendance lists, LINE messages, emails, social-media advertisements, referral and commission records, bank transfers, account records, investor communications, return calculations, and evidence showing the defendant’s actual role in the fundraising structure.

Q10: What should I do if I am summoned for questioning in a Taiwan Bank Act case?

Preserve all investment contracts, messages, advertisements, payment records, seminar materials, investor lists, commission records, and financial documents. Do not delete, alter, recreate, or backdate evidence. Before detailed questioning, consider obtaining legal advice so that the alleged fundraising structure, your actual role, and the elements of each potential offense can be reviewed.

10. Conclusion: Bank Act Charges Can Be Contested When the Statutory Elements Are Not Proven

This New Taipei District Court acquittal illustrates an important principle in Taiwan financial crime cases: an investment arrangement should not be classified as illegal deposit-taking merely because it involves investor funds and promised returns.

Articles 29 and 29-1 of Taiwan’s Bank Act have specific requirements. Courts may examine whether the defendant raised funds from multiple or unspecified persons, whether the solicitation was systematic and business-like, whether the investor pool was publicly accessible or continuously expanding, and whether the promised returns were obviously disproportionate to the principal.

In this case, the relatively limited and identifiable group of participants, the nature of the seminars, the absence of sufficiently proven broad public solicitation, the complainant’s own investigation before investing, and the level of the promised returns contributed to reasonable doubt concerning the Bank Act allegations.

But the decision should not be read as establishing simple numerical safe harbors. Every case requires an examination of the complete fundraising structure.

🧑🏻‍⚖️Chien Sheng International Law Firm provides criminal defense assistance in Bank Act, financial crime, fraud, money laundering, and other white-collar criminal cases. When facing an illegal fundraising investigation, early preservation of investment documents, communications, money-flow records, and solicitation evidence can be critical to evaluating whether the prosecution can prove each element of the alleged offense.

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