This article originally appeared in the December issue of Taiwan Business TOPICS, the monthly publication of the American Chamber of Commerce in Taiwan. It has been reposted with permission from the publisher.
On October 25, the Executive Yuan put into effect long-awaited amendments to the Act for the Recruitment and Employment of Foreign Professionals, also known as the “Foreign Professionals Act.” The amendments are an important, albeit incremental, step in a decade-long effort to make Taiwan a more attractive destination for foreign professionals.
The new amendments affect all three classes of foreign white-collar worker: ordinary foreign professionals, special foreign professionals, and senior foreign professionals.
Ordinary foreign professionals
First, a note on terminology is in order. The Foreign Professionals Act refers to ordinary foreign professionals as simply “foreign professionals.” The qualifier “ordinary” is used here to distinguish these professionals from other classes of foreign professionals and from the demographic as a whole.
Ordinary foreign professionals are those who obtain work permits to do technical and professional work, serve as executives at foreign-invested companies, or teach, among other things. At the end of October, there were about 40,000 ordinary foreign professionals in Taiwan. The National Development Council (NDC) has announced intentions to increase this number to 100,000 by 2030.
This class of foreign professionals has existed for many years. Its largest subclass comprises those authorized to do technical or professional work, a category that covers most non-teaching white-collar jobs and currently numbers around 25,000. The basic requirements have mostly remained unchanged for many years: a college degree (BA/BSc) in a related field, two years of related work experience, and, in general, a minimum monthly salary of NT$47,971.
A longstanding issue for ordinary foreign professionals has been Taiwan’s notoriously low salaries, which make it difficult for employers to recruit more experienced employees. However, new graduates are often willing to work in Taiwan for a year or two in a lower-paid, non-teaching position to gain experience and improve their Chinese.
In the past, many such jobseekers have been stymied by the two-year work experience requirement. Although it is possible to be exempted from the two-year work experience requirement through the Ministry of Labor’s Consultation Mechanism, this method is underpublicized and poorly understood. Official current information about the Consultation Mechanism is available in a hard-to-understand format on the Workforce Development Agency’s Taiwan EZWORK site.
Fortunately, the amended Foreign Professionals Act has partly solved this issue by exempting graduates of the world’s top 500 universities from the two-year requirement.
The Ministry of Labor, which for decades has vigorously resisted relaxing the two-year experience requirement, initially managed to remove any exemption to the requirement from the draft bill approved by the Executive Yuan. Although the problem is far from completely resolved, the international community can thank the far-sighted lawmakers who intervened on the floor of the Legislative Yuan to amend the bill at the last minute to include the exemption.
To become eligible for permanent residence, ordinary foreign professionals were previously required to reside for five years with a minimum of 183 days in Taiwan each year. That has been changed to an average of 183 days each year over five years of residency.
But simply living in Taiwan is not enough – other requirements must also be met, including having a clean criminal record and – as of late – to “be of good moral character,” which generally means avoiding violations of the Social Order Maintenance Act.
Foreign special professionals
Foreign special professionals are best understood as mid-career foreign professionals with sought-after skills.
There are two subclasses of foreign special professionals: Employment Gold Card holders and those who have obtained five-year work permits. As of the end of October, 3,313 valid Employment Gold Cards had been issued and 1,958 valid five-year work permits provided to special professionals.
The main difference between these two subclasses is that Employment Gold Card holders apply for their cards themselves while the five-year work permit is applied for by the employer. It can take one month or longer to obtain an Employment Gold Card, while a five-year work permit is generally issued in 7-10 business days.
Under the Foreign Professionals Act, Employment Gold Card holders and foreign special professionals with five-year work permits enjoy the same rights and benefits. The most significant changes affecting this group concern taxes and eligibility for permanent residence.
Prior to the recent amendments, foreign special professionals were eligible for two tax incentives: a 50% exclusion on Taiwan-sourced income above NT$3 million (US$108,000) and an exemption from Taiwan’s version of an Alternative Minimum Income tax, known in Taiwan as the Basic Income Tax. These incentives have now been extended from three to five years.
Foreign special professionals do not automatically receive the tax incentives; they must apply for them and meet particular criteria to be eligible. It is imperative to consult with a Taiwan-licensed tax advisor such as a CPA or lawyer before coming to Taiwan, especially for those with substantial overseas income such as distributions from funds, rental income, or other investment income.
Foreign special professionals can also now become permanent residents after residing in Taiwan for just three consecutive years with an average of 183 days per year in the country, compared to the previous five. This new rule should cause the number of foreign permanent residents to increase quickly in the coming years.
The new amendments enable Employment Gold Card holders to apply to extend their residence for up to six months following the card’s expiration. This extension makes it easier to apply for permanent residency after completing the required three years of residence.
In light of the new benefits, the NDC has announced an ambitious goal of having 10,000 foreign special professionals reside in Taiwan by the end of 2022. The establishment of the Taiwan Employment Gold Card Office (TGC) about a year ago was a significant step toward making the application process and the transition to Taiwan easier for foreign special professionals.
The TGC can advise potential applicants on their qualifications and what supporting documents are needed. They also assist with common challenges such as banking, housing, schools, and integration into Taiwanese society. The office is additionally aiming to recruit more women applicants through promotional videos, featuring, among others, a marketing manager at thriving Taiwan startup PicCollage.
Senior foreign professionals
Senior foreign professionals are usually those with outstanding skills and a long track record of achievement in Taiwan. A senior foreign professional can immediately apply for permanent residence for themselves, their spouse, and minor children without meeting any residence requirements.
These applicants are issued a special Alien Permanent Resident Certificate, also known as a Plum Blossom Card. Once they meet the residence requirements for naturalization, they can apply for citizenship through a simplified process without renouncing their original nationality. There are currently about 100 Plum Blossom Card holders in Taiwan.
The dependent relatives of senior foreign professionals who naturalize can continue to enjoy certain benefits under the Foreign Professionals Act, such as permanent residence and work authorization. Previously, these relatives lost those privileges if the sponsoring senior foreign professional became a citizen.
Senior foreign professionals can now also sponsor a parent or grandparent for a visit of up to one year.
More to be done
In addition to the major changes described in this article, several more subtle ones are too technical to delve into here. In sum, the amendments to the Foreign Professionals Act support Taiwan’s selective immigration policy by making it easier to come to and live on the island long-term.
Future amendments to the law should focus on replacing the two-year work experience requirement with a flexible point system similar to the one successfully implemented for international graduates of Taiwanese universities in 2014.
Another glaring omission that long-term residents of Taiwan will notice is that the path to naturalizing as a dual citizen remains extremely difficult and available only to a very select few. Taiwan will soon have 30,000 permanent residents, many of whom will expect and demand citizenship for themselves and their families.Michael Fahey.