An Employer of Record (EOR) is the legal employer for workers. It handles HR responsibilities like payroll, taxes, and compliance while the company directs the employees’ day-to-day tasks. This setup allows businesses to hire globally without establishing a local entity.
Hiring workers from Taiwan offers benefits due to the country’s highly skilled workforce and strong technology sector. Taiwan is known for its talent in electronics, semiconductor manufacturing, and information technology industries. As one of the “Four Asian Tigers,” Taiwan boasts a highly developed economy and a culture of innovation.
Employment in Taiwan has been steady, but the country faces a shortage of skilled labor in certain sectors. According to recent data, Taiwan’s labor market is competitive, and companies often struggle to find qualified workers. The 2020 Manpower Global Talent Shortage Report ranks Taiwan as one of ten countries worldwide. More than 65% of companies report difficulty finding skilled workers, presenting opportunities for businesses looking to tap into this market.
To use an EOR in Taiwan, there are 6 basic steps to ensure you are set up properly:
- Find talent to hire in Taiwan
- Compare using an EOR to setting up a legal entity in Taiwan
- Get the information needed from your talent
- Choose an EOR provider with expertise in Taiwan
- Communicate your hiring needs to the EOR
- Have the EOR set up the contracts and hiring procedure
An EOR manages payroll, taxes, and benefits administration, ensuring compliance with local laws and regulations, thus simplifying the employment process for companies.
Different labor laws in Taiwan, such as those governing work hours, termination processes, and mandatory benefits, must be considered when hiring remotely. The hiring process in Taiwan involves identifying talent, ensuring compliance with local employment laws, and executing contracts, typically facilitated by an EOR for companies without a local presence.
1. Find talent to hire in Taiwan
Businesses should leverage a combination of local and international platforms to find talent to hire in Taiwan. LinkedIn remains a crucial tool for talent acquisition, allowing companies to search for candidates actively seeking opportunities and to headhunt passive candidates.
Local job boards such as 104.com and 1111.com.tw are popular among Taiwanese job seekers and offer extensive listings across various industries. These platforms are particularly useful for finding candidates with specific skills and experience relevant to the Taiwanese market.
Industry-specific job boards and professional associations can be valuable resources for specialized roles. For example, the Taiwan Semiconductor Industry Association (TSIA) can be a good platform for finding talent in the semiconductor industry.
Recruitment agencies with expertise in the Taiwanese market, such as Adecco Taiwan and ManpowerGroup Taiwan, can provide tailored solutions for companies seeking to navigate the complexities of hiring in Taiwan, especially considering the country’s competitive labor market and skill shortages in certain sectors.
2. Compare using an EOR to setting up a legal entity in Taiwan
When working with employees in Taiwan, you need to consider working with an EOR to setting up your own legal entity. An Employer of Record offers a quicker, less complex route to hiring local staff, bypassing the need for a formal company presence. This approach suits companies looking to test the Taiwanese market or expand quickly without significant upfront investment.
An EOR manages all local employment laws, tax, and compliance issues, assuming responsibility for hired employees. This setup allows companies to start operations in weeks, compared to the months required to establish a legal entity.
On the other hand, setting up a legal entity in Taiwan offers greater control and the ability to customize business operations and policies. However, establishing a legal entity involves complex registration processes, significant upfront fees, and a deeper understanding of local laws and tax regulations.
Here’s a comparison of key factors:
| Factor | Employer of Record | Setting Up Legal Entity in Taiwan |
|---|---|---|
| Setup Time | 1-2 weeks | 2-3 months |
| Initial Cost | Low (typically only employee costs) | High (significant registration fees and capital requirements) |
| Ongoing Cost | Moderate (EOR fees + employee costs) | Variable (operational costs, compliance, etc.) |
| Complexity | Low (EOR handles most administrative tasks) | High (requires understanding of Taiwanese business laws) |
| Control over Operations | Limited (company directs daily work, EOR handles employment) | Full (complete control over all aspects of business) |
| Compliance Management | Handled by EOR (payroll, taxes, social security) | Company Responsibility (requires local expertise) |
| Scalability | Highly Flexible (easy to add or remove employees) | Less Flexible (changes may require legal procedures) |
| Local Expertise Required | Minimal (EOR provides guidance) | Extensive (need for local legal and tax advisors) |
| Suitable for | Market entry, testing Taiwanese market, short to medium-term projects | Long-term presence, full operations, strategic expansion |
| Risk | Lower (EOR assumes employer liabilities) | Higher (company bears all legal and financial risks) |
3. Get the information needed from your talent
To hire employees in Taiwan, you need some information about them. Typically, you’ll need the following essential personal information:
- Employee’s full name
- National identification number
- Address
- Date of birth
- Bank account details for salary payments
Additionally, you’ll need a comprehensive job description, including title, duties, and place of work. Employment contracts in Taiwan should detail the contract type, start date, salary, work hours, and other employment conditions.
It’s important to note that while employment contracts are not mandatory in Taiwan, they are highly recommended and common practice. The contract should include details on remuneration, work hours, holiday entitlement, and notice period for termination.
4. Choose an EOR provider with expertise in Taiwan
When choosing an EOR provider to work with in Taiwan, selecting one with deep expertise in the Taiwanese market and a strong understanding of local labor laws is crucial to ensure compliance and smooth business operations.
Evaluate the provider’s experience managing employee onboarding, payroll, and legal compliance in Taiwan. Look for a provider with a proven track record of working successfully with companies similar to yours, and check their reputation through client case studies or reviews.
Assess the range of services offered to see if they align with your needs, such as visa and work permit support, employee benefits management, and payroll processing. It’s important to choose a provider that offers comprehensive employment services and is flexible enough to adapt to changes in Taiwanese labor laws.
Consider the provider’s technology and platforms, ensuring they offer secure, user-friendly systems with strong data protection measures. Evaluate their pricing models, look for transparency in fees, and assess the cost-effectiveness of your business.
What are the best EOR providers to use in Taiwan?
Here’s a table listing the top EOR providers for Taiwan and why each was selected:
| EOR Provider | Why It’s a Good Fit for Taiwan |
|---|---|
| Deel | Extensive experience in Asian markets, strong compliance support for Taiwanese labor laws, and expertise in managing tech industry hires |
| Remote | Strong presence in Taiwan, offers tailored solutions for different industries and provides robust compliance support for Taiwanese labor laws |
| Multiplier | Specializes in Asia-Pacific region, offers dedicated support for navigating Taiwan’s complex regulatory environment, and provides competitive pricing |
| Atlas | Strong presence in Taiwan, offers tailored solutions for different industries and provides robust compliance support for Taiwanese labor laws. |
| Oyster HR | User-friendly platform for managing employees in Taiwan, offers detailed guidance on Taiwanese employment regulations, and provides support for equity compensation |
These EOR providers all offer services tailored to the unique challenges of hiring in Taiwan, including compliance with local labor laws, management of social insurance contributions, and navigation of the complex Taiwanese business environment.
5. Communicate your hiring needs to the EOR
Communicating your hiring needs to the EOR to ensure the process aligns with your company goals and legal requirements is important. Provide a detailed job description, including the title, responsibilities, required qualifications, and skills.
Specify the job’s expected start date, location (including whether it’s remote or onsite), and any specific requirements related to Taiwanese labor laws. Outline the proposed salary, bonuses, commission structures, and other compensation benefits, keeping in mind Taiwan’s cultural norms and expectations.
Clarify the contract terms, including whether it’s a full-time or part-time position, and detail the working hours, including any flexibility or shift requirements. Discuss your company culture, growth plans, and how the position fits into future expansion in the Taiwanese market.
By accurately representing these aspects, the EOR can find the right talent and ensure legal and administrative compliance with Taiwanese labor laws.
6. Have the EOR set up the contracts and hiring procedure
Once you have chosen which provider to work with and communicated your hiring needs, the EOR will set up the contracts and hiring procedure, ensuring compliance with Taiwanese labor laws and employment practices.
The EOR drafts employment contracts that comply with Taiwanese labor laws, including specific terms regarding job details, working hours, and termination procedures. They’ll also manage the necessary documentation for tax, social security, and payroll setup, adhering to mandatory withholdings and reporting requirements.
The EOR assists in obtaining work visas and residence permits for expatriate employees, collects personal and bank account information for payroll, and outlines the onboarding procedures by Taiwanese employment laws. They’ll ensure your company complies with local regulations, adjusting contracts and practices as laws change.
Additionally, the EOR administers benefits and handles formal onboarding, including the introduction to company systems and culture, ensuring a smooth start for your new Taiwanese-based employees.
What help does an EOR provide in Taiwan’s payroll, taxes, and benefits administration?
The EOR will support Taiwan’s payroll, taxes, and benefits administration, ensuring compliance with complex local laws. It calculates and processes employee salaries, withholds the correct tax amounts, and handles social security contributions.
For payroll, the EOR manages regular pay periods, typically monthly in Taiwan, and ensures compliance with the Labor Standards Act. They handle year-end reporting and maintain all payroll-related documentation per Taiwanese labor law.
In terms of taxes, the EOR manages personal income tax deductions, which in Taiwan are progressive and range from 5% to 40%. They also handle social insurance contributions, including labor insurance, national health insurance, and pension contributions.
For benefits, the EOR typically administers mandatory benefits such as paid annual leave, sick leave, and maternity leave. They may also manage other benefits such as the 13th-month bonus, common practice in Taiwan, and other customary benefits like festival bonuses.
What labor laws do you need to consider when hiring in Taiwan?
When hiring in Taiwan, a few key labor laws must be considered. Taiwan’s approach to labor laws generally protects employee rights, with significant emphasis on ensuring fair treatment of workers.
Employment contracts
While not mandatory, employment contracts in Taiwan are highly recommended and common practice. Key elements that should be included are:
- Job title and description
- Compensation details
- Working hours
- Leave entitlements
- The notice period for termination
It’s important to note that there are no specific regulations on probation periods in Taiwan, but they are commonly practiced.
Working hours and paid holidays
The standard work week in Taiwan is 40 hours, typically eight hours per day, five days a week. Taiwan observes several public holidays annually, which are paid days off for employees. Employees are also entitled to paid annual leave, which increases with years of service.
Taxes
Taiwan operates a progressive personal income tax system. Employers are responsible for withholding and remitting these taxes to the relevant tax authorities.
Severance pay
The Labor Standards Act regulates severance pay in Taiwan. Upon termination, employees who have worked for at least one year are entitled to severance pay calculated based on their years of service.
Labor Insurance and National Health Insurance
Employers in Taiwan must enroll their employees in Labor Insurance and National Health Insurance programs, contributing to these schemes on behalf of their employees.
Here’s a summary of these key labor laws:
| Labor Law | Key Points |
|---|---|
| Employment Contracts | Not mandatory but recommended, should include key employment terms |
| Working Hours | 40-hour standard work week, overtime regulations apply |
| Paid Holidays | Several public holidays observed, paid annual leave based on years of service |
| Taxes | Progressive personal income tax system |
| Severance Pay | Required for employees with at least one year of service |
| Social Insurance | Mandatory enrollment in Labor Insurance and National Health Insurance |
How does the hiring process work in Taiwan?
Employers typically follow a structured process when hiring staff in Taiwan while adhering to local labor laws and cultural norms. The process usually involves:
- Defining the job requirements and creating a job description
- Advertising the position through various channels, including local job boards and LinkedIn
- Reviewing applications and resumes
- Conducting initial screenings, often via phone or video calls
- Holding in-person or virtual interviews with shortlisted candidates
- Performing background checks and contacting references (with the candidate’s permission)
- Making a job offer to the selected candidate
- Negotiating terms and finalizing the employment agreement
- Completing required documentation, including enrolling the employee in social insurance programs
- Onboarding the new employee
Throughout this process, employers must ensure compliance with Taiwanese labor laws, including the Labor Standards Act. They must also be aware of cultural sensitivities and norms in Taiwan, such as the importance of formal titles and the emphasis on group harmony in the workplace.
Is Taiwan a relatively easy country to hire employees remotely through an EOR?
Yes, Taiwan is becoming an increasingly accessible country for hiring employees remotely through an Employer of Record (EOR). The country’s well-developed infrastructure, tech-savvy workforce, and business-friendly environment make it an attractive destination for remote hiring.
Here are five pros and three cons for hiring employees in Taiwan:
Pros
Cons
Despite these challenges, the benefits of accessing the Taiwanese talent market often outweigh the complexities, especially when working with an experienced EOR provider who can navigate the intricacies of Taiwanese employment laws and practices. The country’s focus on innovation and technology and its highly skilled workforce make it an attractive option for companies looking to build diverse, talented teams.
