Velocity Global’s Taiwan PEO (Professional Employer Organization) solution streamlines your overseas expansion into Taiwan so you can avoid the costly and lengthy process of entity establishment. By helping you compliantly hire, onboard, and pay your Taiwanese supported employees, International PEO offers the quickest and most cost-effective global expansion method.
Choosing Velocity Global as your Taiwan PEO provider means we become your Employer of Record. We handle every aspect of ensuring compliance overseas, from paying your team to handling their taxes, benefits, and risk mitigation. By taking care of all the small details required to legally operate overseas, we give you the ability to focus on the big picture of running your business.
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Taiwan Fast Facts
Currency: New Taiwan Dollar (NT)
Population: 8 million
Economy: $1.3 trillion
Top Sectors: Electronics, IT, agriculture, manufacturing
National Holidays: Taiwan observes the following national holidays and public sector holidays:
- New Year’s Day
- Lunar New Year’s Eve
- Spring Festival
- Peace Memorial Day
- Children’s Day
- Tomb Sweeping Day
- Dragon Boat Festival
- Mid-Autumn Festival
- National Day
Hiring Considerations in Taiwan
Benefits of hiring in Taiwan:
- Taiwan is the 11th most free economy in the world, according to the 2020 Index of Economic Freedom. The Taiwanese government recently simplified the foreign investment process, making it easier for international companies to set up and operate. The World Bank ranks Taiwan 15th in the world in terms of ease of doing business.
- Taiwan has seen steady GDP growth for the past five years, earning top marks for macroeconomic stability in the most recent WEF (World Economic Forum) Global Competitiveness Report. The WEF ranks Taiwan as the 12th most-competitive economy in the world.
- Known for its culture of innovation, Taiwan boasts a tech-savvy workforce. Global tech leaders like Microsoft, IBM, and Google rely heavily on Taiwanese workers, who make 90% of the world’s laptops and 70% of the world’s integrated circuits. Taiwan also ranks third globally in patent applications and fifth in research and development.
Challenges when expanding into Taiwan:
- Taiwan faces a shortage of skilled labor. The 2020 Manpower Global Talent Shortage Report ranks Taiwan as one of ten countries worldwide where more than 65% of companies report difficulty finding qualified workers.
- Taiwan’s official language is Mandarin, and all business documents are written in this language. Taiwan ranks 40th out of 80 non-English-speaking countries in English proficiency, leading to potential language barriers with employees and business partners.
- Taiwan’s tumultuous history and relationship with China creates complications for companies doing business in-country. In 2018, China pressured foreign companies to acknowledge Taiwan as part of China, threatening to revoke operating privileges for companies that did not comply.
Cultural nuances and must-knows for doing business:
- Nod your head or slightly bow when meeting business partners. Handshakes are also acceptable but are less common among women. Men should wait for a woman to extend her hand before shaking.
- Arrive at meetings on time, as Taiwanese business culture highly prioritizes punctuality. Understand that your partners may not strictly adhere to meeting agendas, though they are serious about respecting deadlines.
- Address colleagues by Mr., Mrs., or academic titles followed by surnames rather than by a first name. Greet the most senior member first. Be aware of official titles, which are very important in Taiwanese culture.
- Communicate with politeness and sensitivity. Taiwanese culture emphasizes manners and modesty over directness. Proceed with tact when broaching potentially controversial conversation topics.
- Dress formally for meetings. Men are expected to wear dark-colored suits, and it is acceptable for them to remove jackets during meetings. Women typically wear conservative business suits, dresses, or blouses.
- Create two-sided business cards with text in English on one side and Mandarin on the other. Expect to exchange business cards after a meeting’s initial introductions.
- Move patiently through business dealings. Taiwanese businesspeople value Guan-xi, or their social networks. Understand that it takes time to earn trust and develop personal relationships with your Taiwanese colleagues.
Employment Contracts in Taiwan
Minimum wages and salaries:
- As of January 1, 2021:
- Minimum hourly wage is NT $160.
- Minimum monthly wage is NT $24,000.
- Probationary periods are commonly practiced in Taiwan but are not mentioned in the country’s LSA (Labour Standards Act). Employers must adhere to general LSA standards regarding termination and severance during probationary periods.
- Taiwan employers commonly reward employees with bonus payments. Employers must outline the specific bonus structure in their work rules.
- Taiwan’s Company Act mandates that employers pay employees a fixed amount or ratio of profit annually. Companies must specify this amount or ratio in their articles of incorporation. Companies are allowed to deduct losses, taxes, stock dividends, and legal reserves from the amount of money they allocate to employee bonuses.
Termination and Severance Considerations:
- The LSA requires that employers provide employees with due notice before terminating employment. The notice periods are as follows:
|Notice Period||Employment Time|
|None||Less than three months|
|10 days||Between three months and one year|
|20 days||Between one and three years|
|30 days||More than three years|
Employers can avoid notice period requirements when an employee:
- Commits acts of violence against the employer, other employees, or the employer’s family
- Falsifies information that led to his or her hiring
- Breaches his or her employment contract
- Intentionally damages or abuse employer property
- Disclose the employer’s confidential information
- Take excessive and unjustified time off work (either three consecutive unexcused days or six unexcused days per month)
- Commit illegal acts which result in imprisonment
Employers are required to pay employees severance. Employees are entitled to one month of severance pay for each year they have continuously worked for an employer. An employer must provide severance pay proportionate to the months worked for employees who have worked for less than one year.
Paid Time Off & Benefits
- Female employees who have completed more than six months of service are guaranteed eight weeks of maternity leave.
- Female employees with less than six months of service are guaranteed eight weeks of maternity leave at half their regular salary.
- The Act for Gender Equality in Employment provides pregnant employees with increased rights at work. Pregnant employees can request to be reassigned to lighter work. For breastfeeding employees with children under two years of age, employers must grant an extra 60-minute break per day, along with an additional 30-minute break if overtime work exceeds one hour.
- Employees with a spouse in labor are entitled to five days of paid paternity leave.
- Employees who adopt children are entitled to unpaid leave until the child is three years of age.
- To earn the aforementioned parental leave benefits, employees must have completed six months of work under their current employer.
- Vacation time off in Taiwan is calculated based on how long an employee has worked for an employer. Vacation entitlements are as follows:
|Vacation Time||Employment Time|
|Three Days||Between six months and one year|
|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 10 years|
|30 days||Employees who have worked for more than 10 years earn an additional day for each year of service, maxing out at 30 days.|
- Non-hospitalized employees are entitled to 30 days of sick leave per year.
- Hospitalized employees are entitled to one year of sick leave within a two-year period.
- Employees can take additional unpaid sick leave (up to one year).
- Employers must compensate employees with half-pay for sick leave up to 30 days per year.
- If an employee takes sick leave for an injury suffered on the job, the employer is responsible for the employee’s full salary.
Average workweek hours:
- Employees in Taiwan must not work more than eight hours per day and 40 hours per week, excluding overtime.
- Including overtime, an employee may not work more than 12 hours per day.
- Employees must not work more than 54 hours of overtime in one month or 138 hours of overtime in three months.
- Employees working up to two overtime hours on a given day are entitled to 1.34 times their regular hourly wage.
- Employees working between two and four overtime hours on a given day are entitled to 1.67 times their regular hourly wage.
- Employees are entitled to at least two days off every seven working days. An employee may work on one of these days off but is entitled to extra overtime pay at the following rates:
- 34 times the regular wage for the first two hours worked
- 67 times the regular wage for between two and eight hours worked
- 67 times the regular hourly wage for between eight and twelve hours worked
Choose Velocity Global
Expanding into Taiwan presents enormous opportunity for your business to hire new talent, tap into new revenue streams, and grow your global brand. Establishing and maintaining a legal presence in Taiwan requires an in-depth understanding of the country’s payroll, tax, benefit, and employee management regulations. Velocity Global is here to help.
As your legal Employer of Record, we take care of every small detail required for compliance in Taiwan. Our Taiwan PEO solution enables you to set up quickly, legally, and cost-effectively. International PEO is up to 60% less expensive and 90% faster than entity establishment, leaving you more time and resources to focus on key business initiatives. No matter your specific goals, the size of your business, or where you are in your global expansion process, we have the knowledge and experience to assist you every step of the way.
Reach out to Velocity Global today to learn how we can help streamline your expansion into Taiwan.
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