By Agence France-Presse
Celebrities began arriving for the ceremony, with Oscar-winning director Ang Lee among the celebrities to walk down the red carpet in Taipei's Sen Yat-sen Memorial Hall.
Chinese director Zhang's martial arts epic, inspired by traditional ink-brush painting, leads with 12 nominations including for the coveted best film, best director, best leading actor and actress awards.
Taiwanese comedy "Dear EX" about a widow fighting for her husband's inheritance against his gay lover, follows closely with eight nods in the best film and best acting categories, plus a best new director nod for Taiwanese duo Mag Hsu and Hsu Chih-yen.
Best director contenders are all from China. Zhang, Jiang Wen ("Hidden Man") and Lou Ye ("The Shadow Play") will face off against 29-year-old Bi Gan ("Long Day's Journey Into Night") and Tibetan Pema Tseden ("Jinpa").
Zhang has never won Golden Horse best director, while former actor Jiang, who starred in Zhang's classic "Red Sorghum", won the title with his directorial debut "In the Heat of the Sun" in 1996.
The best acting awards are also dominated by Chinese talent, with Taiwan's Roy Chiu and Hsieh Ying-xuan fighting for a home win for their respective roles as the gay lover and widowed mother in "Dear EX".
China's Deng Chao, who plays the double of an official trained to protect him in ancient China in "Shadow", is a frontrunner for best actor against compatriots Xu Zheng ("Dying to Survive"), Duan Yihong ("The Looming Storm") and Peng Yuchang ("An Elephant Sitting Still").
Deng's wife, Chinese television star Sun Li, who also plays his wife in "Shadow", is vying for best actress against Zhou Xun in Japanese director Shunji Iwai's romance "Last Letter" as well as Zhao Tao ("Ash is Purest White") and Zeng Meihuizi ("Three Husbands").
Three Chinese dramas -- "Long Day's Journey Into Night", "Dying to Survive" and "An Elephant Sitting Still" -- are also in the running for best film.
The best documentary category sees "Our Youth in Taiwan" about the island's 2014 Sunflower Movement pitted against "Umbrella Diaries: The First Umbrella" about Hong Kong's pro-democracy Umbrella Movement. Both mass protests were led by young activists and reflected increasing resistance to Beijing's influence.
Over 40 films out of a record 667 submitted were nominated for the 55th edition of the Golden Horse Film Awards, with the ceremony due to start at 7:00 pm (1100 GMT).