What you need to know
Taiwan's planned new legislation would make tax and other incentives available to international talent.
By Philip Liu
To remedy the serious brain drain in Taiwan and counter aggressive talent poaching by neighboring countries, the government has proposed legislation to help attract and retain foreign white-collar workers. The main provisions would relax current restrictions on the hiring of foreign professionals, improve their living conditions, and offer them tax and other incentives.
Now being reviewed by the Legislative Yuan, the bill – known as the Act for the Recruitment and Employment of Foreign Professional Talent – will make it much easier for foreign professionals to be employed in Taiwan or to serve here as interns. If the law is enacted as proposed, for example, foreign professional talent would be able to stay in Taiwan for up to one year for job-seeking, whereas currently they must already have a job to qualify for residence.
Foreign students attending the top 500 universities worldwide–or those who graduated from those universities within the past two years–would be able to come to Taiwan for internships in their professional fields for up to two years, in addition to a one-year stay for seeking internship opportunities. At present, internships are shorter term and available only to currently enrolled students.
The law would enable interested foreign professionals to apply to the National Immigration Agency of the Ministry of the Interior for a four-in-one “Golden Job Card” that serves the combined functions of work permit, residence visa, alien residence certificate (ARC), and re-entry permit. The card, modeled on Singapore’s Personalised Employment Pass (PEP), will be good for one to three years, with holders able to apply for renewal before the expiration date. Those who have held the card for five years will be eligible to apply for an alien permanent residence certificate (APRC).
For workers in certain specified fields – such as science and technology, economics, education, and culture – the card will be valid for five years rather than the usual three years. Foreigners with demonstrated talent in the arts may apply to work on a freelance basis without sponsorship by an employer.
Tax breaks are among the incentives to be offered to encourage overseas professional talent to work in Taiwan. Foreign white-collar workers, for instance, would enjoy a 50% tax cut for three years on the portion of their annual income exceeding NT$2 million and would also be exempted from the alternative minimum tax on their overseas income.
Further, foreign white-collar workers holding an APRC will be entitled to participate in the labor pension system, for which their employers will be required to make a monthly contribution. Upon retirement, foreign teachers at public schools will be entitled to choose between a lump sum payment and a monthly pension.
The bill also addresses problems related to the families of foreign white-collar workers – problems that in the past often discouraged many such workers from coming to Taiwan. For instance, in the case of foreign professionals in specified fields who hold permanent residence certificates, their spouses and offspring under the age of 21 will also be granted APRCs, along with national health insurance coverage. Their adult offspring with over 10 years of legal residence in Taiwan will be allowed to work here.
In addition, the parents of foreign white-collar workers will be permitted to visit Taiwan for stays of up to one year.
In line with the spirit of the bill, the Ministry of Labor has announced plan to revise regulations to permit the spouses and offspring of foreign white-collar workers to take part-time jobs, even with companies that do not meet the existing requirements of at least NT$5 million in paid-in capital and NT$10 million in annual revenue. Those standards remain valid in the case of full-time jobs, however.
The authorities hope that passage of the bill will help relieve the chronic shortage of technical manpower, which has dampened the investment willingness among many high-tech firms in recent years. According to government estimates, some 20,000 local technical workers go abroad each year in search of higher pay and better career opportunities.
The situation has been aggravated by the aggressive campaigns of neighboring countries in soliciting technical manpower in recent years. Singapore, South Korea, Hong Kong, and especially China have been offering handsome incentives to attract foreign technical workers to work in their countries.
Many Chinese enterprises have poached numerous Taiwanese technical workers with hefty salaries and attractive fringe benefits – sometimes seeking access to trade secrets in return. The situation is especially severe in such high-tech fields as IC design, IC manufacturing, machine tools, and key electronic components and parts.
In contrast to the aggressive talent-raiding campaigns of other countries in the region, Taiwan has long imposed multiple barriers to the entry of foreign white-collar workers. Foreign chambers of commerce and corporate executives, for instance, have often suggested that Taiwan institute an internship system for young people from abroad, enabling them to familiarize themselves with Taiwan’s working environment, society, and culture – and thereby enhancing their willingness to later work and reside in Taiwan. The practice has been adopted by many neighboring countries for years.
Advocates of liberalizing Taiwan’s approach to foreign white-collar workers point to the case of Ralph Jensen, a German software engineer in Kaohsiung, who has lived and worked in Taiwan for nearly two decades. In an op-ed column run in the Chinese-language United Daily News in November last year, Jensen complained that his two sons, both born in Taiwan, can only obtain JFRV (joining family residence visa) status, instead of a permanent residence certificate, and as such are not eligible for employment.
According to Global Talent 2021, a paper published by Oxford Economics, Taiwan’s talent deficit in 2021 is expected to be the largest among the nations studied. The number of approved foreign professionals has remained virtually unchanged over the past years, reaching 31,971 as of the end of May 2017, compared with 30,185 at the end of 2015. Of the former figure, the largest category consisted of professional or technical workers at 18,032, followed by cram-school language teachers (4,866), managerial staff at foreign-invested companies (2,532), and school teachers (2,972).
The bill on foreign white-collar workers, however, has sparked concern among some NGOs and lawmakers over its possible impact on salary levels and job opportunities for local young people. A major area of concern is that foreign young people could take low-paid jobs in the name of internships, circumventing the regulation setting the minimum monthly pay for foreign white-collar workers at NT$47,971.
“What I oppose is the introduction of low-paid foreign white-collar workers, rather than foreign professionals,” remarked Democratic Progressive Party legislator Lin Shu-fen in a piece posted on her Facebook page recently. “Under the bill, enterprises will only have to pay subsidies to those foreign interns, who will not be covered by the Labor Standards Law. The practice may repeat the abuse of the existing local internship system. The impact on local new graduates will be inevitable.”
In order to allay the concern, Premier Lin Chuan pointed out at a Cabinet meeting on June 8 that applicants for internships will be required to present a detailed plan for approval by the regulatory body (for example, the Ministry of Economic Affairs for manufacturing companies and the Financial Supervisory Commission for banks) and that the internship must be related to their professional field. In addition, a quota will be set limiting the number of foreign interns each year. The Premier also instructed the government agencies in charge of labor affairs to closely monitor the internship program to prevent abuse of the system.
Lin said that for the sake of national competitiveness, Taiwan needs to follow the lead of many developed nations in adopting measures to attract young professional talent from around the world.