The Draft Act for the Recruitment and Employment of Foreign Professionals passed smoothly through Taiwan’s legislative branch this past October and will come into force on 8 February 2018. This new law is part of an overarching effort by the Taiwanese government to attract and maintain foreign talent in targeted sectors in the face of fierce international competition and an aging society. Unlike the Labor Standards Act and Employment Services Act, the two statutory laws that govern employment for both Taiwanese and foreign nationals, the Act for the Recruitment and Employment of Foreign Professionals is sponsored by the National Development Council. It offers a number of benefits to foreign white collar workers not previously enjoyed, including tax incentives, easing of restrictions on residency for both the professional and their family members, and the ability for those with permanent residency to be included in the pension system under the Labor Pension Act.

The act designates three kinds of foreign employees: foreign professionals, special foreign professionals, and senior foreign professionals, each with their own set of benefits. It also aims to resolve some longstanding issues faced by such workers in the past. Below, we summarize a few of these issues and discuss the solutions proposed in the bill.

1. The waiting period for spouses and children of foreign professionals to be approved for National Health Insurance coverage

Currently, dependents of foreign professionals are made to wait six months before Taiwan’s state-sponsored health insurance takes effect. For those with minor illnesses or injuries, this is not a serious problem as the cost of treatment without insurance is still relatively low. However, more severe cases or things like childbirth and surgery require coverage by the NHI to be affordable for most families. Article 14 of the new law removes this restriction, allowing dependents of the foreign professional to gain coverage as soon as they have obtained documentary proof of residency.

2. The requirement that a foreign professional must reside in the state for 183 days out of the year to maintain permanent residency

This requirement, as provided for in Article 33 Paragraph 1 Subparagraph 4 of the Immigration Act, was overly restrictive on foreigners with permanent residency, some of whom needed to take business or personal trips abroad for indefinite periods of time. Article 18 of the new law changes the minimum to five years of residing in Taiwan to avoid revocation of permanent residency.

3. The three year limit on work permits and ARCs

Whereas work permits, under Article 52, Paragraph 1 of the Employment Services Act, are presently limited to a term of three years, and Alien Residency Certificates are subject to the same term limit, as prescribed in Article 22 Paragraph 3 of the Immigration Act, the new bill extends this to five years for the category of foreign special professionals. The intention of this article is to allow foreign special professionals with indefinite or long-term work contracts to reside in Taiwan without worrying about overstaying their ARC. This also covers joining families of foreign special professionals, who may apply for identical periods of residency.

Overall, the Act for the Recruitment and Employment of Foreign Professionals will provide some incentives for foreigners currently living and working in Taiwan to continue their residency here and for those considering Taiwan as a potential destination for employment.

For more information on Taiwan employment matters, please contact Christine Chen at cchen@winklerpartners.com or on +886 (0) 2 2311 8307.