Hiring in Taiwan: Four Ways to Build a Team

Your Four Options for Hiring in Taiwan

Taiwanese law requires that whoever employs a worker in Taiwan is a legal entity registered in Taiwan. That single rule drives every option below. You can become that entity by registering, you can borrow one by using an employer of record, or you can avoid the employment relationship entirely by contracting. The four routes are ordered by commitment, lowest first.

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The dividing line is headcount and horizon. Below roughly thirty employees, or under a two-year commitment, the two-to-four-month registration process and the USD 8,000 to 20,000 a year of ongoing compliance rarely pays back. Above it, an entity usually does, particularly for semiconductor and hardware operations, and the EOR becomes the more expensive option per head. If you want the detail on that route, see how an employer of record works in Taiwan.

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Can You Hire in Taiwan Without an Entity?

Yes. Hiring in Taiwan without setting up an entity is legal and common, and there are two ways to do it. The first is an employer of record, which employs the person on your behalf through its own licensed Taiwanese entity, runs payroll, and carries the statutory obligations. The second is an independent contractor arrangement, which avoids employment but only works where the relationship is genuinely one of contract for services. Neither requires you to register with the Ministry of Economic Affairs or enrol separately with the Bureau of Labor Insurance and the National Health Insurance Administration.

• Hire in Taiwan in days rather than the two to four months a company registration takes, with a compliant Chinese-language contract from day one.
• Foreign nationals can still be sponsored for a Work Permit and an Alien Resident Certificate, because the employer of record is a Taiwanese entity and can sponsor through the Workforce Development Agency and the National Immigration Agency.
• Labor Insurance, Labor Pension, National Health Insurance and monthly withholding tax are handled for you as part of Taiwan payroll.
• You avoid creating a permanent establishment in Taiwan for your foreign parent company, which is the tax exposure most companies miss.

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Contractor or Employee in Taiwan?

Employee misclassification in Taiwan is decided by the working relationship, not by what the contract says. Taiwanese authorities apply a control and integration test: do you direct how the work is performed, is the person integrated into your organisation, and do they depend economically on your business? A well-drafted services agreement carries very little weight against the facts of the day-to-day arrangement.

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Hiring Contractors in Taiwan Without Getting It Wrong

You can hire a contractor if the engagement is genuinely project-based. In that case,

• Write the scope around deliverables rather than hours
• Let the contractor decide method and schedule
• Avoid issuing company equipment or an internal email address
• Do not renew the contractor agreement indefinitely

The moment the arrangement starts to look like a full-time role, convert it immediately. Reclassification is retrospective, so the exposure grows with every month the engagement continues. Taiwan adds a specific cost: the Labor Pension is an employer contribution of 6% of monthly wages paid into the employee’s individual account, and a reclassified contractor may be treated as having been owed it from the start of the engagement. If you decide to bring them in-house, see our guide to converting contractors to employees.

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Hiring a Foreign National in Taiwan

Hiring a foreigner in Taiwan requires a Work Permit issued by the Workforce Development Agency, followed by an Alien Resident Certificate from the National Immigration Agency, both dependent on a sponsoring Taiwanese employer. The contractor route is therefore closed: a contractor cannot be sponsored, because sponsorship presupposes an employment relationship. That leaves two routes: your own Taiwanese company or an employer of record, and only one of them is fast. For the wider APAC picture, see our work pass and visa guide.

• The Work Permit is applied for by the sponsoring employer and is tied to a named role and employer.
• The Alien Resident Certificate follows the Work Permit and governs the holder’s right to reside in Taiwan.
• Employers sponsoring on their own entity face capital and revenue thresholds that an employer of record already satisfies.
• The minimum wage applies to all employees regardless of nationality, so foreign hires cannot be paid below the statutory floor.

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Which Route Fits Your Situation

Five situations cover most companies hiring into Taiwan for the first time. Find the one closest to yours, then read the recommended route. If you already hold an entity and only need the admin lifted, that is a Professional Employer Organisation rather than an employer of record.

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Switching Routes Later

Most companies change route within two years of their first Taiwanese hire, and both common transitions are routine. Knowing the mechanics up front removes the main objection to starting with a lighter-weight option.

Converting a Contractor to an Employee

Conversion means issuing a compliant Chinese-language employment contract under the Labor Standards Act, enrolling the person in Labor Insurance, Labor Pension and National Health Insurance, and starting monthly withholding tax. Continuous service usually restarts from the employment date unless you agree otherwise, which matters for severance and for pension seniority under the Labor Pension Act.

Moving From an Employer of Record to Your Own Entity

Once your company is registered with the Ministry of Economic Affairs and your tax, Bureau of Labor Insurance and National Health Insurance registrations are live, employees transfer by novation, or by resignation and rehire. Labor Pension accounts are individual to the employee and follow them. Work Permits are tied to a named employer and do not transfer, so a new permit must be applied for and sequenced so the employee is never working without one. AYP’s employer of record is a predictable monthly fee per employee, see our pricing page.

Before You Hire in Taiwan

These apply to every employment route. They are the floor, not the whole picture, and they are the numbers most often out of date in a foreign employer's payroll.

For contribution rates, leave entitlements, filing deadlines, termination law and the full 2026 regulatory timeline, see how an employer of record works in Taiwan.

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Questions? We're Here to Help

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