Thanks to cross-strait economic ties with Mainland China and a strong electronics sector where local companies like Acer and Asus enjoy a global footprint, Taiwan’s economy and the Taiwan recruitment market are robust.
The Taiwan Diaspora and Taiwanese Returnees
Estimating the size of the Taiwanese Diaspora is difficult given that many Taiwanese blend in within overseas Chinese communities. However and despite government restrictions on emigration during the early history of Taiwan, over 100,000 Taiwanese left to study abroad in the latter half of the 20th century while during the 1970s and 1980s, it’s estimated that 20% of Taiwanese college graduates studied abroad with few returning. However and in recent years, the return of Taiwanese who studied abroad has risen steadily to 33% with 50,000 Taiwanese returning from abroad between 1985 and 1990 alone.
Many of these Taiwanese returnees were instrumental in creating Taiwan’s high tech economy while those who stayed abroad have also contributed to the country’s economy by working for Taiwanese multinational companies in their adopted countries. Moreover, the Overseas Compatriot Affairs Commission, which was created to look after overseas Chinese in general and on behalf of the government of Taiwan, also looks after the affairs of Taiwanese abroad while children of Taiwanese living abroad are eligible to receive resident permits or permanent stay visas when they return.
Otherwise and according to the latest Chinese census (2010), 170,283 Taiwan residents were living on the Chinese mainland and 68.4% of them were male. In addition, it’s estimated that there are over 100,000 Taiwanese Americans permanently residing in the USA.
The Taiwan Recruitment Market
Despite a move to offshore low-end production activities to Mainland China, the Taiwan recruitment market still suffers from labor shortages in the industrial and service sectors with companies blaming Taiwan’s secondary and tertiary schools for failing to provide enough qualified workers. Moreover, the Taiwan recruitment market suffers from a lack of fluent English speakers when compared with the former British colonies of Singapore or Hong Kong which are also said to have done much more to encourage other types of industries and foreign investment beyond just manufacturing to set up shop.
On the other hand and while another global downturn could slow Taiwan’s economy and the Taiwan recruitment market, large scale layoffs and work furloughs are not expected to occur in the manufacturing sector.
Working in Taiwan
Foreign expatriates intending to work in Taiwan will need to apply for a work permit from the Council of Labor Affairs (CLA) which is usually a straight forward process as the CLA offers “one-stop licensing services for employment of foreign professionals where the application process will take approximately two weeks. The validity period of Taiwan work permits will usually be for up to 3 years. Once approved for a Taiwan work permit, foreign expatriates will also need to apply for an Alien Resident’s Certificate (ARC). For more information about Taiwan visas and Taiwan work permits, visit the website of the Taiwan Council Of Labor Affairs (CLA).
As for taxes, Taiwan income tax rates are progressive and up to 40% with nonresidents subject to withholding tax at a rate of 18% on wages and salaries and 20% on commissions, rental income, bank interest, royalties, fees for professional practices and prizes exceeding NTD 2,000. Individual income taxes in Taiwan will be levied on Taiwan-source income of both resident and nonresident individuals with an individual considered to be a resident of Taiwan for tax purposes if he or she is a Taiwan national or a foreign expatriate residing in Taiwan for at least 183 days in a calendar year. In addition, Taiwan tax residents with Alternative Minimum Tax (AMT) taxable income of more than NTD 6 million may also be subject to a 20% AMT after deductions for income taxes payable and any foreign income tax credits. For further information about Taiwan tax rates or Taiwanese taxes in general, visit taxrates.cc, KPMG’s Taxation of International Executives page for Taiwan or the website of the Taipei National Tax Administration.
Finally, it’s worth noting that Taiwan salaries will generally be lower than those in the USA but foreign expatriates in Taiwan continue to enjoy excellent benefits. Moreover and as a Chinese country, employees can expect a Chinese New Year bonus ranging from one to as much as six months that is usually paid around January or February.