Starting a business in Taiwan

1. Introduction

Employment relationships in Taiwan are highly regulated. The Labour Standards Act (“LSA”), promulgated on July 30, 1984 and fully applicable to most employment relationships since January 1, 1999 (subject to limited exemptions for certain professionals, such as medical practitioners), was most recently amended in July 2024.

Employment terms agreed between an employer and an employee must not be less favourable than the minimum standards prescribed under applicable labour laws. Any non-compliant terms will be null and replaced by the relevant statutory provisions prescribed under the LSA. Where employment terms are not specified in an employment contact or the employer’s work rules/policies, the statutory minimum standards will still apply.

Lee and Li’s Labour Practice Group has extensive experience in assisting employers with compliance under Taiwanese labour laws and advising on employment arrangements aligned with business needs. Please contact us should you require further assistance.

2. Labour and Employment Law Requirements

a) Employer Policy Requirements

To ensure compliance with applicable laws, employers operating in Taiwan are legally obligated to establish and implement certain employment policies once they reach specified workforce thresholds.

• Work Rules

Employers with 30 or more employees must establish work rules and submit them to the competent labour authority for approval.

• Measures for the Prevention of Sexual Harassment, Complaint Procedures, and Disciplinary Actions

Employers with 30 or more employees must implement measures for the prevention of sexual harassment, including complaint procedures and disciplinary mechanisms.

• Regulations for Workplace Bullying Prevention, Complaints, and Disciplinary Handling

Employers with 30 or more employees must implement measures for the prevention of workplace bullying, including complaint and investigation procedures and disciplinary mechanisms.

• Occupational Safety and Health Management Plan

Employers with 30 or more employees must establish and report an occupational safety and health management plan to the competent labour authority.

 

b) Employee Training Requirements

Employers are obligated to conduct certain statutory training programmes, including:

• Anti-sexual harassment workplace training
• Anti-bullying in the workplace training

Those trainings must be provided to both employers and employee. In practice, training is typically conducted semi-annually and lasts approximately 30 minutes to one hour.

• General safety and hygiene education and training session

Employers must provide a minimum of three hours of safety and hygiene education and training sessions for new employees (including dispatched workers) and incumbents who change their job duties.

• Other necessary on-the-job training based on the nature of the job and the results of the relevant risk assessment

Additional training may be required depending on the nature of the work and the results of risk assessments.

 

c) Employment Agreements

Employment contracts may be entered into either in writing or orally. However, a written contract is required for work permit purposes.

It should be noted that:

• Only contracts for temporary work (completed within six months), short-term work (within six months), seasonal work (within nine months), or specified work (subject to the local labour authority’s approval if exceeding one year) of a non-continuous nature may be treated as fixed-term contracts.
• Employees engaged in work of a continuous nature forming part of the employer’s regular business operations must be employed under non-fixed-term contracts. Any fixed-term contract for continuous work will be deemed a non-fixed-term contract by operation of law.
• While it is acceptable for both employer and employee to agree to a probationary period under LSA. However, the requirements for an employer to terminate an employee under the probation period is same as those as for regular employees (i.e., based on any one of the statutory causes of lay-off or dismissal or based on a mutual termination).

3. Corporate Law Requirements

a) Compliance for Incorporation

• Preparation for Incorporation

1. Reservation of Chinese corporate name and business scope for the wholly-owned Taiwan subsidiary (“NewCo”)
2. Locate the registered office of NewCo
3. Conduct a zoning compliance check to see if the location complies with zoning rules (if the NewCo is located in the Taipei City)
4. Open a preparatory office bank account of NewCo
5. Determine the paid-in capital of NewCo
6. Apply for Foreign Investment Approval (FIA)
7. Remit the capital to the preparatory office account of the NewCo based on the FIA approval
8. Apply for verifying the remittance of the initial capital into the NewCo

• Incorporation Registrations

1. Execute articles of incorporation, documents for election of director(s)/supervisor and other incorporation documents of the NewCo
2. Prepare the CPA audit report
3. Apply for incorporation registration of the NewCo
4. Apply for business registration of the NewCo
5. Apply for registering the NewCo as importer/exporter (as applicable)
6. Collection of the Certificate of purchase of government uniform invoices

 

b) Post Incorporation Registrations

1. Enrol employees in labour insurance
2. Enrol employees in national health insurance
3. Convert the preparatory office bank account of Newco into a formal bank account

4. Payroll and Benefits Providers

The amount of salary agreed to by both the employer and the employee should be no less than the basic wage announced by the Ministry of Labour (MOL), which is NT$29500 per month (NT$196 per hour) starting from January 1, 2026 (subject to adjustment from time to time). According to a directive issued by the Ministry of Labour, by the end of 2026, the goal is for employers to pay wages by the 5th or 7th day after the completion of each payment cycle, depending on the size of their workforce.

An employer should enrol all employees in the statutory social benefit scheme from the first day of their employment, including pension scheme, national health insurance, labour insurance and occupational accident insurance.

5. Conclusion

For foreign companies establishing operations in Taiwan, payroll management and employee benefits administration are often outsourced to specialised service providers, particularly where the local workforce is relatively small. In such cases, our affiliated CPA firm can provide comprehensive payroll and employment services designed to meet the specific operational needs of your business.

Lee and Li’s Labour Practice Group has extensive experience assisting foreign corporations in structuring their Taiwan market entry and employment arrangements. We would be pleased to support your company in navigating these matters and to provide the services necessary to facilitate a smooth and compliant commencement of operations in Taiwan.