Analyzing Taiwan's Draft Law on Foreign Talent

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Why you need to know

The draft act on hiring foreign talent passed last week does more to make life easier for foreign workers and their families already in Taiwan than it does to entice fresh white-collar recruits to the beautiful island.

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The passage of draft legislation aimed at improving the recruitment of foreign talent through review by a joint legislative committee last week is an overdue and important milestone for Taiwan’s foreign community.

The consensus is that the “Draft Act for the Recruitment and Employment of Foreign Professional Talent” should pass relatively unscathed through the implementation phase — set for later this year and the early part of 2018. 

The act is the culmination of sustained advocacy work by a select group of individuals and their organizations, spearheaded by Forward Taiwan, for which the country’s foreign workers, present and future, should be truly thankful.

“This draft act is very important and addresses many longstanding issues,” says Forward Taiwan founder Ping Chu. “But it is not a detailed execution plan yet. We don’t know how they will set up the implementation phase.”

The legislation has its genesis in the administration of former Taiwan president Ma Ying-jeou, which aimed to address concerns over a declining birthrate and brain drain by easing avenues for foreign talent to enter Taiwan, particularly given input from nascent initiatives to foster a start-up ecosystem that regulations were too strict.

“The original proposals would have made it easier to hire and issue work permits for foreign professionals, lowering some requirements for getting a work permit,” says Michael Fahey, a legal consultant at the Taipei office of Winkler Partners. “The minimum wage of NT$48,000 (US$1,587) per month salary would have been changed to a more flexible points system, but those proposals encountered vocal opposition from self-appointed representatives of the labor movement and also received a strong reaction online.”

The opposition centered on fears that companies could use the rules to bring in low-paid foreign workers, denying opportunities for young Taiwanese. The tail-end of this backlash, led by DPP legislator Lin Shu-fen (林淑芬) during the recent legislative review, is in part responsible for the removal of Article 20 in the draft act, which would have allowed recent foreign university graduates to be given a two-year internship visa. Foreign students currently enrolled at universities remain free to visit Taiwan on internships, and about 700 take up this opportunity each year.

This is a missed opportunity that most concede is a necessary concession for the act to get through the legislative tug of war intact. It is telling that the vast majority of the increase in foreign professionals joining the workforce in recent years can be accounted for by foreign graduates of Taiwanese universities, who since 2014 have been available for hire on salaries lower than the NT$48,000 per month minimum. It is at this end of the spectrum, rather than among high-earning top talent in engineering and technology, that Taiwan can expect to have most success in boosting its foreign white-collar quotient. The one olive branch that remains in this regard is a provision to grant job-seeking visas for six months, giving foreigners intending to seek employment an official capacity to do so that replaces the previous route of landing in Taiwan for the purposes of tourism. An option to extend this visa for a further six months was eliminated in committee.

Yet in the face of the above-mentioned opposition, the incoming administration of president Tsai Ing-wen decided not to lower minimum standards for work permits and focus on taking care of a host of other issues faced by foreign professionals, primarily relating to health insurance, pensions, children and families. “They decided to draft one law that takes care of as many of those issues as they could — that’s the origin of this draft bill,” Fahey says.

In this respect the draft act has the potential to be a resounding success. Some of the key measures, outlined in the table below, can only be viewed in a positive light. The removal of a stipulation that Alien Permanent Resident Card (APRC) holders must remain in Taiwan for at least 183 days or risk losing their status leaves the door open for people to maintain a longterm relationship with Taiwan while pursuing interests elsewhere for up to five years.

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Credit: The News Lens, Focus Taiwan, NDC, Winkler Partners.

The draft allows spouses and children of foreign professionals to obtain health insurance immediately instead of having to wait for six months — especially important for parents in light of huge medical bills amassed by some unfortunate parents when there have been problems with newborn children, according to Fahey.

Tobie Openshaw, who has lived in Taiwan for more than two decades, and his son William are potential beneficiaries of a change allowing adult children of foreign professionals to apply directly to the Ministry of Labor for a work permit without first securing a job.

William Openshaw, 25, is approaching the end of university and currently faces a legal limbo whereby he would be eligible for a one-year residency, but would not be able to work because he is required to have already acquired two years relevant work experience. “A beautiful catch 22,” as Openshaw describes it. The Taipei American School videographer is wary of a similar “gotcha clause” that would render William ineligible for the revised work permit rules — and with good reason. The draft regulation stipulates that only children who entered Taiwan under the age of 16 and have spent at least 270 days per year in the country since then would be eligible. An alternative proposal suggests the article should be revised to open eligibility to adult children who have accumulated 1,830 days over a 10-year period. One can only hope that good sense prevails and this revision is implemented. 

Elements of the act that are squarely aimed at attracting foreign talent will likely miss their mark. Tax breaks and “gold card” status — whereby foreign workers have their work permit, residence visa, residency permit and re-entry permit rolled into one— are currently only available for so-called high-level professionals working in industries deemed of paramount importance by the government.

“Taiwan is really fixated on getting people in tech, self-driving cars, STEM-type people,” Fahey says. “But those people look at salaries in Taiwan and just go ‘no way’”. It is indeed unlikely workers in these target fields, which while as yet undefined will likely map to the five-plus two pillar industries earmarked for acceleration under president Tsai’s government, can be convinced to forego higher wages available elsewhere. Forward Taiwan has consequently focused on convincing the government to open the door to artists and creatives. The draft law currently grants overseas artists the right to apply directly for a work permit without an employer, and it can be hoped this provision is retained (further information on the state of regulations governing artists can be found here).

“There are a steady stream of people who are interested in coming and who have different specialties: an established French director, a Dutch electronic music producer, a high-end manga publisher, are just a few examples,” Fahey says.

The draft act leaves the door ajar for these people, but for the time being it is Taiwan’s existing foreign professionals who must take up the slack in advertising the island’s advantages. “Those people can get better treatment through this new law and they will tell they friends and family and be our recruiting agents,” says Forward Taiwan’s Chu. “It is good for retaining talent and incentivizing them to stay in Taiwan — many foreigners leave because of archaic, stringent rules.”

Other changes indicate an acceptance by the government that foreigners intend and are able to make a lasting contribution to Taiwanese society. “Inclusion in the [new] labor pension scheme is symbolically important for APRC holders,” says Michael Garber, an American APRC holder who has lived in Taiwan for more than a decade. “It shows the government is starting to acknowledge that we have made Taiwan our homes.”

This last point is a particular bugbear of Elias Ek, founder of B2B telemarketing firm Enspyre and author of the book, “How to Start a Business in Taiwan.” Ek recounts a longstanding struggle to convince government officials that foreigners could make worthwhile contributions to Taiwanese society.

He points to underlying problems with the way foreigners are regarded, evidenced by the fact they are consistently legislated for on a separate track from locals. He picks out the different formats in ID card numbers as an example. “It had never occurred that somehow it would be a problem,” Ek says. “Consistently there are assumptions in society by Taiwanese people that foreigners are different and they don’t fit in.”

That intrinsic sense of otherness can only really be resolved once it is possible for foreigners to more easily obtain Taiwanese citizenship. This will likely prove the next battleground for Forward Taiwan and the foreign community interests that the group supports.

“What we are hearing from foreign community, in almost a deafening outcry, is that people really want dual citizenship without having to give up original citizenship,” Fahey says.

While it is possible for foreigners to become citizens of Taiwan, most must do so under an amendment to the Nationality Act that came into force in 2016, under which they are naturalized and then have one year to relinquish their existing citizenship.

There is also the question of how these new laws are to be interpreted on the ground. Ek recounts a story of a foreigner who had been approved for naturalization but had to go to several different offices before he could find one that would agree to process him. “He had to wait to find a sympathetic person who understood the law. It falls on the shoulders of officials to make it happen — I have wanted to apply myself but I am assuming I will be turned down.”

Correction: A previous version of this article incorrectly said KMT legislators Chen Yi-ming (陳宜民) Chiang Nai-shin (蔣乃辛) led opposition to the inclusion of Article 20 in the Draft Act. The opposition was in fact led by DPP legislator Lin Shu-fen (林淑芬).

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