Taiwan Country Facts
We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.
Global Expansion Made Easy for You
Expanding into Taiwan generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.
Types of Work Visas and Permits for Taiwan
Firstly, determine what is required to work in Taiwan.
- The Work Permit is the permission for the foreigner to work in the country and is attached to the employer who applies for it. It does not allow entry to the country. This is the first step.
- The Work (Resident) Visa is generally applied for after the work permit has been approved by a Taiwanese embassy or consulate overseas (missions abroad) or a Taipei Economic and Cultural Office (TECO) if there is no embassy. The employee can enter the country with this visa for employment. This single-entry visa is valid only for up to three months.
- The Alien Resident Certificate is a Residence Permit which allows holders to live in Taiwan long term. This is also the Re-entry Permit, so employees can exit and re-enter the country while working. This can be done at the National Immigration Agency within 14 days of arriving. A pilot scheme was introduced in July 2022, which enables highly skilled foreigners and families to apply online.
Work Permits
The work permit is not an entry visa, nor allows holders to live in the country. This permit only determines people’s eligibility to work in the country for a particular employer who applies for the permit. First, the employee must have a job offer and employment contract and must be eligible for one of the unrestricted fields allowing the employment of foreigners.
Employees:
Generally, they fall into two categories:
- Specialists/experts or technicians
- Managers or executives
The Taiwanese government announced that from August 2022, work permits were to be submitted through the Workforce Development Agency (WDA) portal, and qualifying employers created an online account for applications. This means streamlining the system shortens waiting time from 10-12 days to five to seven working days.
Note: School Teachers have to apply to the Ministry of Education.
Employers:
Eligible employers/companies who sponsor professional foreign personnel must qualify with one of the following:
- Established for up to one year with operating capital of TWD 5 million (EUR 151,811 – USD 164,869) or have import/export transactions of EUR 1 million.
- Established over one year, with the latest year showing TWD 10 million (EUR 303,620 – USD 329,738) revenue or an average of TWD 10 million over the previous three years.
- Established over one year with average import/export transactions €1 million or an average agent commission of at least US$400,000.
- A foreign branch office – most recent year with annual income TWD 10 million or average over three recent years of TWD 10 million or average import/export transactions of USD 1 million or average agents commission of EUR 405,000.
- Representative Office of foreign companies with a track record in Taiwan, which has approval from competent government departments.
- Research and Development Centres with business headquarters. It should have already applied to start its business with approval from central government departments.
- An employer/company with particular circumstances or who has made an extraordinary contribution to the economy that government authorities have acknowledged and approved.
Note: The government wants to give equal opportunities to foreign workers and so doesn’t publish official quotas. However, they also want to protect the rights of the local workforce, so relevant authorities monitor specific industries about the number of permits issued. Relevant authorities assess the employment market and which industries contribute to the economy and the country’s development.
Note: Under certain circumstances, the employer can ask the employee to apply for the permit, which they can do through the Workforce Development Agency (WDA), which is part of the Ministry of Labour, provided the employer can provide the employee with all the relevant documentation including a signed copy of the employment contract.
Overview of Taxes in Taiwan
Individual Income Tax (IIT): A tax allowance of TWD 124,000 (EUR 3,765 – USD 4,088) applies to individual taxpayers with five bands from 5% to 40%. A tax allowance of TWD 248,000 (EUR 7,527 – USD 8,177) applies to spouses filing joint returns.
Income Basic Tax (IBT): Foreign-sourced income is included if the individual is a tax resident and/or the foreign-sourced income exceeds TWD one million (EUR 30,352 – USD 32,973), and basic income exceeds TWD 6.7 million (EUR 203,356 – USD 220,922). Liability can be offset against foreign taxes paid on the foreign-sourced income. Under the Income Tax Act, Taiwan imposes IBT of 20% on tax residents, including foreigners residing in Taiwan for 183 days or more in a tax year.
Corporate Income Tax: Resident companies are taxed at 20% on worldwide income above TWD 120,000 (EUR 3,643 – USD 3,957). Non-resident companies are generally taxed on income sourced in Taiwan but are treated as resident companies if they have a permanent, fixed place of business.
Value-Added Tax (VAT): 5% VAT applies to the sales of general industries.
Gross Business Receipts Tax (GBRT): Rates of 1%, 2% or 5% apply to specified business categories.
Commodity Tax: This varies from 8% to 30% on categories specified by the Commodity Tax Act.
Other Taxes: These include Property Tax, Land Value Increment Tax, Real Property Transfer Tax, Deed Tax, Stamp Tax, Securities Transaction Tax and Luxury Tax.
Individual Tax Rules
- The tax year is generally from January 1 until December 31, although companies can apply to their local tax-collecting agency for a different fiscal year.
- Apart from individuals whose entire income is assessed through payroll, tax returns are on a self-assessment basis.
- Self-assessment is generally based on the first payment of 50% of the previous year’s return and paid by the ninth month of the current tax year, with the balance paid with the tax return at the end of the tax year.
- Joint returns are allowed for spouses.
- A tax allowance of TWD 124,000 (EUR 3,765 – USD 4,088) applies to individual taxpayers and TWD 248,000 (EUR 7,527 – USD 8,177) to spouses filing joint returns.
Taiwanese Individual Tax – Single Married
From | Not over | Percentage on excess
TWD 0 | TWD 560,000 (EUR 16,998 – USD 18,467) | 5%
TWD 560,001 | TWD 1,260,000 (EUR 38,245 – USD 41,551) | 12%
TWD 1,260,001 | TWD 2,520,000 (EUR 76,468 – USD 83,090) | 20%
TWD 2,520,001 | TWD 4,720,000 (EUR 143,227 – USD 155,630) | 30%
TWD 4,720,001 | – | 40%
Note: Individuals in Taiwan for less than 90 days and who are paid by foreign employers are not taxed. A withholding tax of 18% applies to salaries paid to non-residents by Taiwanese employers.
Social Insurance Taxes (National Insurance)
Employers and employees are liable for contributions from salary and payroll into various National Health Insurance (NHI) programs, based on monthly insured salary capped at multiple levels. Relevant funds are the Labour Insurance Program (LIP), the National Health Insurance Program (NHIP) and the Labour Pension Program (LPP).
Contributions from employers and employees vary according to employees’ salaries and are capped at various levels in a highly complex framework. From July 2022, the Ministry of Health and Welfare (MOHW) increased the number of income tiers from 47 to 51, in increments of TWD 7,500 (EUR 227.59 – USD 247.33) for each level.
In addition to contributions to the various funds, under the Second Generation National Health Insurance Program, the NHI levies an extra 2.11% on high annual bonuses and income from dividends, rentals and interest exceeding the individuals’ monthly base income four times.
Taiwan is a prime target for international expansion for overseas companies. Taiwan is the No.1 worldwide producer and supplier of semi-conductors, which has earned it a niche position in the global economy. This buoyant market is also a potential stepping stone to reach other Southeast Asian nations.
Opening a subsidiary can seem a ‘smart move’, and in Taiwan they usually take the form of a limited company operating under the Companies Act. However it is a risky business venture and can be costly both in time and money and comes without any guarantee of success.
Foreign companies undertaking the incorporation process themselves face coping with strict set-up procedures. Next come issues involving hiring employees, running payroll and complying with tax laws and employment legislation. It is a long list with demands that will get in the way as you try to focus on building your business in a new territory.
Or … you could take a faster route into the Taiwanese economy. Bradford Jacobs has the expertise to deal with these potential issues and delays. Our Professional Employer Organisation (PEO) specialists and Employer of Record (EOR) consultants will point you in the right direction – from recruiting the staff to managing every legal aspect of compliance. Instead of waiting weeks or months, you can be up-and-running in days … with your employees always under your operational control.
How to set up a Taiwan Subsidiary
As applies to a foreign parent company.
- Decide on the type of entity, which is generally a limited company
- Submit a Foreign Investment Application (FIA) with the Investment Commission and await approval before starting incorporation process
- Register foreign company and any foreign members or shareholders with the Ministry of Economic Affairs (MOEA) and reserve unique company name
- Obtain the Unified Invoice Number from the MOEA, which generally doubles as the company ID
- Register with the National Tax Agency (NTA) of the Ministry of Finance, and the relevant National Taxation Bureau for the Northern, Central or Southern regions or the capital, Taipei
- Complete company registration Form A, in Chinese characters and provide Articles of Association and register of shareholders and members
- Register a physical office
- Minimum share capital may apply if company operates in certain sectors or if there are foreign employees
What are the Benefits of setting up a Subsidiary in Taiwan?
The subsidiary operates in Taiwan as an independent legal entity from the parent company, which is generally protected from responsibility for any debts or liabilities, including legal issues. Shareholders are liable only to the extent of their contribution to the subsidiary.
The subsidiary presents the parent company the opportunity to test the market by pursuing different business operations and entering into agreements with other Taiwan-registered companies. The subsidiary has greater credibility with clients and suppliers compared with branches.
But … setting up a subsidiary is still a long way from finding the most efficient and financially sensible way of setting up operations in Taiwan.
Bradford Jacobs will find the brightest talent for your company in Taiwan through our in-country Professional Employer Organisation (PEO) specialists. Employees can be working at their desk in days … not weeks or even longer. All concerns regarding employment laws and compliance will be removed by our Employer of Record (EOR) teams. We handle the hassle … while you have day-to-day operational control over your workforce.
Subsidiary Regulations in Taiwan
As applying to a private limited company set up by a foreign parent company, which must submit a Foreign Investment Application to the Investment Commission before starting the incorporation process.
Registration and Documentation:
- Register unique company name with the Ministry of Economic Affairs (MOEA) and the foreign members or shareholders
- Obtain the Unified Invoice Number from the MOEA, for business tax purposes and which doubles as the company ID
- Register a physical office
- Complete company registration Form A, in Chinese characters and provide Articles of Association and register of shareholders and members
Accounts and Taxation:
- Apply for business registration with the National Tax Administration
- Minimum capital requirement may apply in certain industrial sectors or in the case of employing foreigners
- Before incorporation, open a preparatory bank account to deposit working capital, replaced by a permanent business bank account after registration
- Register with the National Tax Agency (NTA) and the relevant National Taxation Bureau offices for the Northern, Central or Southern regions or the capital, Taipei
- The FIA company is taxed on its worldwide profits
- Annual returns must be filed with the revenue authorities
Management:
- At least one, but no more than three directors
- A minimum of one shareholder and no more than 50
- There are no requirements for shareholder or board of directors’ meetings, with all resolutions etc., approved in writing by members
International companies entering the Taiwan market will find a relatively small western Pacific island that nevertheless plays a significant role in the world economy, through being No. 1 for the production and supply of semi-conductors and integrated circuits.
They will also find Taiwan’s geographical location is regularly in the global spotlight. Barely 100 miles across the Taiwan Strait lies its massive neighbour, the People’s Republic of China (PRC). The PRC’s political aim is for unification with Taiwan … and yet, the economic relationship is strong. Mainland China is their main commercial partner and accounts for 25% of Taiwan’s trade.
Taiwan, officially known as the Republic of China (ROC), has a coastline of 973 miles (1,566km) and also holds the Penghu Islands to its west. Taiwan has maritime borders with the Philippines and Japan as well as the PRC.
Taiwan’s terrain generally slopes from the mountainous east to the plains of the western areas. The sub-tropical climate – apart from a tropical southern tip – creates long hot summers from April till October, with short mild winters, apart from snow on the mountains.
Taiwan’s population of around 24 million comprises mainly Taiwanese and Chinese ethnic groups, speaking various local dialects as well as Mandarin, with small numbers speaking Japanese. The government recognises 16 indigenous groups, each with their own distinct dialects.
Starting your business in Taiwan
As a foreign company exploring the options for international expansion, there are strict guidelines you must follow strict when starting your business in Taiwan. The first decision will be deciding whether to open a legal entity in the country as a subsidiary of the parent company. This is a typical route for gaining a foothold in a new territory, but it is not straightforward in Taiwan, which imposes rigid incorporation and registration procedures.
More requirements come thick and fast. The ‘to do’ list includes opening a business bank account, deciding where in Taiwan to locate the business and where to find lines of support, such as distributors.
This is the point at which the wise move is to link with a Professional Employer Organisation (PEO) and Employer of Record (EOR) such as Bradford Jacobs. Recruitment, onboarding, payroll … and much more are all taken care of while you focus on building your business in a new territory.
Incorporation Procedures:
The usual choice for a foreign company establishing a legal entity in Taiwan is to open a limited company as a subsidiary, which will be regulated by the Companies Act. Limited companies are owned by their members/shareholders, whose level of ownership is stated in terms of their capital contribution to the company. Registration procedures, including those for foreign investing companies, are detailed and protracted. They include:
- A foreign company must file a Foreign Investment Application (FIA) with Taiwan’s Investment Commission and obtain approval before beginning incorporation
- The foreign parent company, or any foreign members, must be registered with the Ministry of Economic Affairs (MOEA)
- Reserve unique company name with the MOEA
- Obtain the Government Unified Invoice Number, generally used as business ID for a company, from the MOEA
- Register with the National Tax Agency (NTA) of the Ministry of Finance, and the relevant National Taxation Bureau for the Northern, Central or Southern regions or the capital, Taipei
- Complete specific company registration Form A for the limited company, to be completed in Chinese characters. The form includes: Company name and seal, legal representative, pre-check number, registration number, investment type, scheduled date of establishing company, registered address, registered capital, number of directors
- Provide register of shareholders/members
- Provide Articles of Association
There is generally no minimum share capital. A minimum may apply if the company operates in an industry whose authority requires one, or if they employ foreign nationals
Expanding your business into Taiwan
Taiwan, officially the Republic of China (ROC), holds key positions both economically and strategically. The western Pacific island nation has made its mark in the global economy as the largest producer and supplier of semi-conductors. Its location makes it a ‘stepping stone’ for further expansion into Southeast Asia and the Pacific Rim with the potential of reaching 600 million inhabitants.
Despite political tensions with the People’s Republic of China (PRC) 100 miles away across the Taiwan Strait, the two nations have strong economic bonds. The PRC is Taiwan’s largest trading partner, adding to the potential for international companies expanding their business into Taiwan. It is estimated that 80,000 Taiwanese companies operate on the Chinese mainland.
The opportunities are waiting … but it is vital that incoming companies have a clear focus on where they need to locate in Taiwan to maximise this potential.
Advantages and Challenges when entering the Taiwan Market
Some Advantages:
- Financially strong with one of the most diversified Foreign Direct Investment portfolios in Asia
- Government support for Research and Development projects and a generally pro-business outlook
- Foreign companies can depend on Taiwan’s stable democracy and fundamentally strong institutions
Some Challenges:
- Being prepared for Taiwan’s difficult relationship with the PRC impacting on economic activity
- Heavily dependent on global high demand for semi-conductors, integrated circuits, LCD screens, computers and office equipment
- Exports dependant
- Dealing with skills shortages in ICT, manufacturing and logistics
The Labor Standards Act (LSA) prescribes the terms and conditions of written employment contracts, which are usual but not mandatory for Taiwan citizens but compulsory for foreign workers. The LSA does not recognize oral contracts. Any terms of employment such as benefits and entitlements not covered by the LSA will come under the Taiwan Civil Code.
Basic information that must be detailed in the contract includes: full details of both parties; work location and type of employment; working hours and breaks; wages and payment schedule; disciplinary procedures; entitlements such as vacations. The LSA does not stipulate a particular language for contracts, but in the case of legal disputes notarized translations must be provided in Mandarin.
The contract must equal or improve entitlements, benefits and safeguards as stipulated by the LSA, even if the contract does not specifically refer to them.
The LSA describes the main contract types as non-fixed term and fixed-term contracts.
Non-Fixed Term Employment Contracts: The usual type of contract for continuous work, with a start date but no end date, typically ending with the employee’s resignation or retirement. Unless the contract is ended for the employee’s gross misconduct or misrepresentation, termination requires advance notice and severance payments.
Fixed Term Employment Contracts: Temporary, seasonal, short-term work, or employment for a specific project, can be covered by a fixed term agreement. A short-term contract cannot exceed six months, seasonal contracts nine months or contracts for specific projects 12 months. Under Article 18 of the LSA the employee cannot claim additional wages for the early termination of a fixed-term contract. Under Article 9 of the Act, a fixed term agreement becomes non-fixed term if the employer allows the employee to continue working beyond the original end date.
Probation Periods: The LSA has no mandatory requirements or guidelines for trial periods, which therefore require prior notice and severance when terminated.
Collective Bargaining Agreements (CBAs): These are governed by the Collective Agreement Act, which regulates bargaining procedures under the authority of the Ministry of Labor. CBAs generally cover such as wages, working hours, entitlements and benefits, retirement, redundancies, occupational hazards compensation, working conditions. Any terms in a CBA must at least equal, or improve, benefits and entitlements where employers and employees are subject to the CBA. Any inferior terms in the working conditions will be replaced by those of the applicable CBA.
Overview of Employee Benefits in Taiwan
The LSA and supplementary legislation apply minimum standards to local and foreign workers in the following categories:
National Minimum Wage: The Ministry of Labour increased the monthly minimum wage to TWD 26,400/month (EUR 800 – USD 870) from January 1 2023.
Working Hours and Breaks: Employees are restricted to eight hours of work per day, excluding overtime, and total working hours cannot exceed 12, including overtime. There is a 30-minute break after working for four hours, although this can be varied if there is a rotation between employees or the work is urgent.
Rest Days: There must be two rest days every seven, one of which is mandatory and the other is flexible or can be worked and paid as overtime.
Overtime: Although overtime cannot generally exceed 46 hours per month, amendments to the LSA allow employers to calculate overtime across a three-month period, where extra hours cannot exceed 54 in one month or 138 over the three months. Employer and employee can agree to set the three months, but the employer must have permission from the relevant labour union or Labour Management Conference. Where companies employ more than 30 in whatever location the business operates, they must inform the local labour authority. Overtime on regular work days is compensated at 1.3 times the standard hourly rate for the first two hours and 1.67 times the norm for the next two hours. Employees working on their flexible rest days receive 1.34 times the typical pay for the first two hours, 1.67 times for up to eight hours, and 2.67 times for between eight and 12 hours.
Discrimination: Employees’ protection against discrimination and harassment in the workplace is detailed in the Employment Services Act, which covers grounds such as ethnicity or place of birth, social or marital status, language, religious or political beliefs, disability or union membership. Additionally, the Act for Gender Equality in Employment bans discrimination based on gender regarding recruiting, salary, training or benefits.
Health and Safety: Employers must comply with the Occupational Health and Safety Act regarding equipment installation to safeguard employees and ensure that any dangerous equipment is regularly checked. Companies employing more than 300 staff, or more than 100 engaged in hazardous work, must provide medical personnel on-site.
Social Insurance: The Social Security Administration (SSA) governs the social insurance system in Taiwan through the Labour Insurance Program (LIP), the National Health Insurance Program (NHIP) and the Labour Pension Program (LPP). The LIP covers workers aged between 15 and 65 in businesses employing more than five people. The pension program covers Taiwanese citizens not covered by any other public pension schemes.
Paid Vacations: Employees’ entitlement depends on the length of service: three days between six months and one year’s service; seven days between one and two years; 10 days between two and three years; 14 days between three and five years; 15 days between five and ten years’ service; one extra day for each year over ten years to a maximum of 30 days.
Sick Leave and Benefit: The allowance is 30 days a year for non-hospitalized illness and 60 if the employer is in hospital. The benefit is 50% of the salary for 30 days. Where the employee is covered by insurance, the employer makes up the balance if there is a shortfall between insurance and 50% of the salary. Combined sick leave cannot exceed one year over two years.
Public Holidays: Between 10 and 15 public holidays vary between fixed dates and those set according to the lunar calendar.
- Founding Day of the Republic January 1
- Peace Memorial Day February 28
- Labour Day May 1
- National Day October 10
Holidays fixed by the lunar calendar include:
- Lunar New Year (3 days)
- Women and Children’s Day
- Tomb Sweeping Day
- Dragon Boat Festival
- Mid-Autumn Festival
- Lunar New Year’s Eve
Maternity / Paternity / Parental Leave and Benefit: Article 50 of the LSA allows for a total of eight weeks of leave taken before and after the birth. Employees with more than six months of service receive full pay as a benefit, and those employed for fewer than six months receive half pay. In the case of miscarriage after three months, the employee is permitted four weeks’ leave. The Ministry of Labour (MOL) increased certain allowances in January 2022. Male spouses are allowed seven days of paid paternity leave, and pregnant employees are allowed seven days of paid leave for pre-natal checks.
Pension System: Within the multi-layered and complex pension system, which is undergoing reform, there are three occupational schemes for employees in the private sector – Labour Insurance, Old Labour Pension Fund and New Labour Pension System. These cover around eight million employees. Under the New Labour Pension System, employers deposit at least 6% of the equivalent of their employees’ monthly wages into an individual labour pension account managed by the Bureau of Labour Insurance. As of October 2022, the retirement age is 63, but it will increase to 68 by 2028.
Private Health Insurance: Outside of the National Health Insurance (NHI) service, which is highly efficient, expatriates, in particular, opt for private clinics that avoid waiting times. Usually staffed by English speakers, the facilities are expensive, and health insurance is essential. Health insurance companies include BUPA, Allianz Worldwide, Blue Cross, ExpaCare, CIGNA and up to 20 others. All Taiwanese citizens and those living in Taiwan for more than six months must be enrolled in the mandatory National Health Insurance (NHI) program. Doctors and hospitals operate privately, and after treating patients, they claim payment from the National Health Insurance Administration.
13th Month Salary: Although not a legal requirement, these are commonly paid and often coincide with festivals such as the Chinese New Year, Mid-Autumn Festival and the Dragon Boat Festival.
International companies moving into a new territory and needing to recruit staff inevitably find the process wrapped in red tape and bureaucracy. This is definitely the case in Taiwan officially known as the Republic of China (ROC), where restrictions surround recruiting non-nationals rather than Taiwanese locals.
Finding the best talent in Taiwan to take your international expansion forward is only the first stage of a long and complicated process, especially if trying to recruit from the home country. Once recruited and onboarded, employers face strictly-applied employment legislation that enforces their obligations and the guaranteed rights and benefits of your new staff.
These demands add up to a considerable workload. However, there is a simple, speedy and cost-effective alternative to having your new staff up-and-running in a matter of days and without having to unravel any red tape.
At Bradford Jacobs we have the vital expertise to provide the smoothest route for your journey into the Taiwanese economy. Our Professional Employer Organisation (PEO) networks have global reach to find the right staff. Then, through our Employer of Record (EOR) platforms we will have your new employees at their desks and screens in the shortest time. This guide highlights everything you need to understand about recruitment and onboarding processes in Taiwan. You can trust Bradford Jacobs to put the brightest talent in place for your company.
Recruiting in Taiwan
Taiwan has low unemployment. Along with skills shortages in sectors such as Information and Communications Technology as well as manufacturing, these factors add up to a competitive recruitment market and put pressure on foreign companies on the lookout for new employees.
As a result, the search to find recruits with the right skills is fiercely competitive. Additionally, the terms of the Employment Services Act expect employers to positively discriminate in favour of local workers over foreigners. Talent is available, but recruiters must be inventive to find the right person for the role.
Taiwan recruitment agencies should have the local knowledge to find the answers. But agencies are not the only option. Bradford Jacobs’ in-country recruitment specialists will source the staff and deal with all other issues through our PEO networks. The next step is to onboard the new staff and your new recruits – and you – can relax knowing that we have taken care of every aspect of employment and taxation law.
Employees’ pre-hire checks in Taiwan
In general, there are no specific rules prohibiting background checks. Under the Labour Standards Act references, educational qualifications can be checked, along with verifying the absence of a criminal record, but only with permission of the applicant. Employers must confirm applicants comply with work permit or immigration requirements.
Basic facts when recruiting in Taiwan
Employers must comply with basic requirements of the Labour Standards Act (LSA), which protect employees’ rights and imposes minimum standards on employees. The majority are compulsory and any employment agreements or contracts that undercut the minimums are invalid.
Incoming companies cannot risk attracting fines or other sanctions. Basic requirements of employment legislation include:
- At interview, the applicant must give permission for employers to make background checks on references, qualifications and criminal record
- Foreign employees must have written contracts, which are not mandatory for Taiwanese
- The LSA details that written contracts must contain full details of both parties; work location and type of employment; working hours and breaks; wages and payment schedule; disciplinary procedures; entitlements
- The LSA does not stipulate a language for contracts, but in the case of legal disputes notarized translations must be provided in Mandarin
- The contract must equal or improve entitlements, benefits and safeguards as stipulated by the LSA, even if the contract does not specifically refer to them.
- The LSA recognises non-fixed term contracts as the norm, with fixed-term contracts allowed in certain work situations
- There are no guidelines for probation periods under the LSA
Employers must comply with basic requirements of the Labour Standards Act as it applies minimum standards to the legal benefits and entitlements of their staff. These include such as minimum wages, working hours and breaks, rest days and overtime, discrimination, health and safety.
Hierarchy: Outside of multi-nationals, the vast majority of companies are Small and Medium Enterprises (SMEs), but their hierarchy still tends to be based on seniority and age, with these qualities recognized across the shop floor and offices as well as in the boardroom.
Introductions/Greetings: The host often makes introductions on behalf of their team, rather than individuals introducing themselves. Look directly at your counterpart, bow slightly; always wait for women to extend their hand first. Use formal titles, Mr. or Mrs. and where appropriate, such as Dr. or other titles.
Gift Giving: This is a common practice in business. Small thoughtful gifts, maybe displaying a company logo, or wine are acceptable. There are some taboos. Do not offer clocks as a present, as these suggest ‘counting down the time’ of your opposite number. Do not give white flowers as these are associated with death and funerals. Offer and receive gifts with both hands. When receiving a gift, do not unwrap in front of the giver.
Business Cards: Usually exchanged after initial introductions; offer using both hands with the face up, and receive their card with both hands. Take time to examine details on the other person’s card as a sign of respect and do not write on it in their presence.
Dress Code: This is important in making a good first impression. Smart and conservative suits are best for men; trouser suits for women, or loose skirts with a blouse are also acceptable.
Meetings: An agenda may be only the starting point for introducing other ideas and suggestions. Taiwanese prefer meetings to come to a satisfactory conclusion, so be prepared for them to overrun. Be well prepared with data, stats and charts as well as being thoroughly briefed on the business and structure of the other company.
Out of Hours: Lunches and dinners are an important part of the business process, but hierarchy also applies here with junior members of the party waiting for their elders to commence eating first.
Punctuality: It is essential to be on time as this shows respect for the relationship, but the starting time may have an allowance for small talk and discussing family.
Negotiations: As with other Asian nations, ‘face’ is an important element in relationships and negotiations. Demonstrate respect, allowing more senior persons in the hierarchy to speak first, avoid causing embarrassment or losing patience. Stay calm.
Language: With Mandarin being the official language, and English often not used outside of multi-nationals, it is safest to check whether an interpreter is required.
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