Taiwan, a vibrant island with bustling cities, rich cultural heritage, and technological advancement. The nation boasts a population of around 23 million people, a well-educated workforce, and a healthy economy spurred on by industries including electronics, manufacturing, and services. Their market economy is heavily dominated by trade and export and it is ranked high in terms of civil liberties, healthcare, and human development. 

A Taiwan Employer of Record, also called a Professional Employer Organization (PEO), is a third-party company that takes on the legal responsibility of employing staff on behalf of a company. This includes payroll, tax compliance, fringe benefits, and other administrative tasks. The EOR model allows businesses to hire employees in Taiwan without the necessity of setting up a legal entity in the country.

We specifically created this guide to help you understand Taiwan Employer of Record and how best to use them for your business expansions. 

Benefits of Using Employer of Record Taiwan

Businesses looking to expand to Taiwan are on their way to exploring more opportunities to grow yet it comes with its various challenges. That is where an EOR can make all the difference. Here are some benefits of Employer of Record Taiwan:

Hire local talent

When you’re looking to tap into Taiwan’s local talent pool of qualified professionals, an EOR is your best friend. They have local knowledge to enable you to find and hire suitable talent quickly. You will not have to spend months in an attempt to understand the local job market and the practices of recruitment. You can immediately use the established networks and knowledge of your Taiwan PEO. This means you can onboard top talent who’s already familiar with the local culture and ways of doing business, thereby giving your company a competitive advantage.

Compliance

The labor laws in Taiwan can be confusing to understand as a new business, and it’s an uphill task to understand them if you are less than familiar with the legal environment. Hiring an employer of record Taiwan helps take the burden off your shoulders by ensuring full compliance with all local regulations, everything from employment contracts down to statutory benefits. You have complete assurance that you are not breaking laws that could otherwise attract heavy fines or bring you into legal disrepute as compliance is a serious matter in every country. 

Risk Mitigation

Expansion to a new country is always filled with some percentage of risk, but having a Taiwan PEO in place helps minimize most of these risks. The employer of record Taiwan assumes all legal liabilities for employment. This lessens your liability and saves your business from potential litigation or disputes that may arise. It’s like having a safety net that allows you to focus on growth without constantly looking over your shoulder for legal pitfalls.

Cost effective

An employer of record Taiwan can be cost effective as it eliminates the need to set up a local entity, which saves on initial costs and reduces legal complexities. Taiwan PEO also helps with managing payroll, compliance, and benefits, streamlining operations and mitigating employer liability. This allows companies to hire quickly, scale their workforce flexibly, and focus on core business activities while ensuring adherence to local labor laws.

Focus on core business

This is perhaps the most important benefit of using an EOR, you’re helped to focus on what you do best in your business. Hiring an employer of record Taiwan frees you from administrative tasks or observance of regulations, so you can drive your energies into strategic initiatives and developing your business. The EOR handles the nitty-gritty details, giving you the freedom to innovate and expand your market presence in Taiwan.

How does an employer of record in Taiwan work?

Expanding your business to Taiwan will be easy while using an EOR. This is how an Employer of Record Taiwan handles some things that relate to employment so you have a smooth transition and operation.

1. Hiring process

The employer of record Taiwan will handle all the hiring processes on your behalf. Because of their local knowledge, they source and recruit competent candidates fitting your requirements. Since they have an understanding of the job market of Taiwan, the EOR can find their way through various barriers to culture and language with ease; hence, making the process quicker and efficient. 

2. Employment contract

Once the ideal candidate is identified and selected, the contract of employment is drafted and maintained by the Taiwan PEO. These contracts are tailor-made for Taiwanese labor laws and include important topics such as job scope, remuneration, and termination conditions. In this way, you and the performing employee will be on the same page as to what exactly is expected of the employee and avoid misunderstandings and disputes that may occur.

3. Payroll and benefits

The EOR also assumes total responsibility for payroll, which, among other aspects, ensures that salaries are paid in a timely and accurate manner. They handle tax withholdings and social security contributions in compliance with local regulations. The employer of record Taiwan also manages employee benefits, covering health insurance and pensions to ensure all statutory and company-specific benefits are provided.

4. Compliance

From the labor law standpoint, it is compulsory for your company to follow Taiwanese labor-related laws. The employer of record Taiwan will ensure your company is liable for all the legal issues required in the domain of employment, tax, and laborers’ rights, reducing the risk of receiving any legal issues and/or fines. Making sure your company is compliant with all laws is the sole responsibility of your EOR.

5. HR administration

The employer of record Taiwan also manages day-to-day HR administration tasks. This includes maintaining employee records, handling leave requests, and addressing any HR-related queries or issues.

Things to Consider When Choosing Employer of Record Taiwan

Selecting the right employer of record is necessary for your successful expansion into Taiwan. Here are some key factors to consider:

Local expertise

You have to ensure the EOR has deep knowledge of the Taiwanese market. Their understanding of local culture, language, and business practices will be invaluable in hiring and managing employees in Taiwan. You can find reviews online and ask business associates in Taiwan for recommendations. 

Compliance track record

You can also check the EOR’s history of compliance with Taiwanese labor laws. A strong track record in legal compliance ensures your business avoids potential legal issues and penalties, providing peace of mind. One practical way to do this is to check their website and look at companies they’ve worked for to evaluate their track record.

Service offerings

Also, you should evaluate the range of services the EOR provides. Beyond payroll and benefits, look for additional support in areas like recruitment, employee training, and performance management. Hiring an employer of record Taiwan with a comprehensive service package can simplify your business operations.

Technology platform

It’s also best to consider the technology platform the EOR uses to manage HR processes. A user-friendly HR software like Omni can streamline payroll, benefits administration, and employee management making it easier for your workplace to be efficient.

References and testimonials

This is intertwined with some of the factors above, references and testimonials from other companies that have used the employer of record’s services will help you evaluate if they’re a good fit for you. Positive feedback from satisfied clients will give you confidence in the Taiwan PEO’s ability to meet your business needs.

Challenges and Risks for Taiwan Employer of Record

When using a Taiwan PEO, you should be aware of potential challenges and risks like: 

Complex Taiwan employment law

Taiwan’s employment laws are constantly evolving and businesses need to always adjust. For new businesses navigating labor laws around contracts, benefits, and terminations requires expertise. Because mistakes can lead to legal complications or financial penalties, this is what you need to work with a PEO Taiwan that has a deep understanding of local laws.

Employer of record Taiwan selection

Choosing the right Employer of Record Taiwan is a must for your company. A poor selection can result in inadequate service, compliance issues, or even reputational damage. You should thoroughly vet potential partners, and assess their track record we earlier recommended, and service offerings to ensure they align with your business needs.

Protecting employee data

Data protection is a big deal in today’s world, especially with the increasing focus on privacy regulations. A Taiwan PEO should implement strict data security measures to safeguard sensitive information about employees. It should be pursued with due compliance regarding local and international data protection laws to avoid breaches of trust.

Frequently Asked Questions for Employer of Record Taiwan

1. What is an EOR?

An employer of record is a third-party company that will take over all formal employment responsibilities on behalf of your company. This includes paying payroll, taxes, and other compliance and benefits to enable you to stay focused on core business activities without the need to set up a legal entity in Taiwan in this case.

2. How long does it take to hire an employee through an employer of record Taiwan?

Generally speaking, hiring via a Taiwan PEO takes less time than more traditional routes. It may take several days to a couple of weeks, given the complexity of the role and the availability of candidates.

3. What are the costs associated with using an employer of record Taiwan?

The cost may vary depending on the services required, the number of employees, and the complexity associated with compliance needs. Generally, the charges can be tagged as a percentage of one employee’s salary or as a flat monthly fee. Special pricing should be discussed directly with the service provider.

4. Can I terminate an employee through EOR Taiwan?

Yes, you can terminate an employee through a Taiwan employer of record. The EOR will make sure that termination is done according to the local labor laws and handle all necessary documents and procedures for the purposes of minimizing the legal risks involved.

5. Does an employer of record Taiwan provide benefits to employees? 

A Taiwan employer of record typically provides statutory benefits, including health insurance and pension contributions. Supplemental benefits can also be given, but they depend on your company’s policies and local market requirements.

6. Can an employer of record Taiwan help with visa and work permit applications?

Yes, many PEO Taiwan can help you through with visa and work permit applications. They will handle the process on your behalf, ensuring that all the immigration laws are followed, and aiding your employees with what they need legally to work in Taiwan.

Maximize Your Business Potential with Employer of Record Taiwan

An employer of record Taiwan can be a valuable asset for businesses looking to expand into the Taiwanese market. By partnering with a reliable and reputable EOR, you can streamline your HR processes, mitigate risks, access global top talents, reduce costs, and enhance your company’s reputation in Taiwan. 

Omni makes it easy to support employees across multiple countries, time zones, and currencies.

Our centralized document management solution makes gathering the necessary data required to apply for employment visas and other country-specific initiatives seamlessly and timely. With customized workflows and automated reminders, HR can help empower employees to manage the deadlines and documentation requirements for applications. And centralized documents and real-time data makes it easy for employees to access salary information and produce reports and documents necessary for verification.

Our dedicated local team of experts provides personalized support and ensures your business remains compliant with Taiwan’s labor laws. Book your demo with our team to learn more about how Omni can help maximize your business potential.