"Efforts to internationalize the nation's capital markets are the best and the necessary way to develop Taiwan into a regional fundraising hub," said Kong Jaw-sheng to a forum on financial reform at the National Taiwan University in Taipei.

The planned offshore stock market will initially be open to foreign and domestic institutional investors, with stocks and bonds denominated in dollars.

Kong told the forum that the Commission is considering opening up the bond market to overseas investors in the run-up to launching the new exchange.

The plans for a new exchange are in response to the departure of a number of local manufacturers to mainland China, something that is increasingly accompanied by fund-raising in Hong Kong or other overseas markets.