In-depth treatment of selected topics in Taiwan law for legal professionals

Further liberalization of Taiwan’s foreign investment rules

Taiwan’s Executive Yuan has approved draft bills to amend the Statute for Investment by Foreign Nationals and the Statute for Investment by Overseas Chinese in an effort to simplify Taiwan’s foreign investment approval process. If passed into law by the Legislative Yuan, it is expected that 85% of foreign investment in Taiwan would be subject to post-investment reporting rather than pre-investment approval. The draft bills simplify review procedures, shorten the review process, and strengthen regulation of foreign investment.

Review Procedure Simplification

Under the draft bills, investments would require pre-approval or post-investment reporting depending on the nature of the investment. Investments that would require pre-approval include:

  1. Investments above a certain amount or level of shareholding
  2. Industries in which investment is restricted by law
  3. The investor is a foreign government, government-related entity, or from a jurisdiction under sanctions.

It is expected that investments over US$1 million would require pre-approval. The level of shareholding that would require pre-approval is still under review.

Restricted industries include broadcasting, power transmission and distribution, and telecommunications. The complete list may be found in the Negative List for Investment by Overseas Chinese and Foreign Nationals last revised in February 2018.

Examples of sanctioned jurisdictions include Cuba, Iran, and North Korea.

All other types of investment would be subject to post-investment reporting.

Shortened Review Process

The draft bills would also tighten deadlines for regulatory approval. The Ministry of Economic Affairs would be required to notify investors within five days if application documents are incomplete. After accepting an application, the Ministry would have one month to rule on the application unless other agencies need to be consulted. If other agencies are involved, the deadline for a decision would be two months.

Strengthened Foreign Investment Regulation

The bills would also strengthen the regulator’s post-investment regulatory powers. If irregularities requiring review are discovered in an investment following reporting of the investment, the regulator could order the investor to apply for approval. The investor could also be ordered to withdraw the investment if it is discovered that the investment affects national security. Currently the regulator’s powers are limited to ordering withdrawal of the investment or cancellation of the right to settle foreign exchange.

Registered foreign investors in listed securities would be subject to new fines of NT$240,000 (c. US$7,660) to NT$4.8 million (c. US$153,000) for violations of the Taiwan Financial Supervisory Commission’s securities regulations. Failure to remedy such violations could lead to suspension of investments in securities by the foreign investor for up to one year or revocation of the investor’s registration.

Failure to apply for equity investment approval when required would be subject to fines of NT$120,000 (c. US$3,800) to NT$600,000 (c.US$19,000) while failure to report an investment would be subject to fines of NT$60,000 (c. US$1,900) to NT$300,000 (c. US$9,600). Orders to rectify, suspending shareholder rights, and to stop or withdraw the investment could also apply.

The draft bills also would expand the definition of an investor to include foreign funds and partnerships. Currently investors include only natural and legal persons. The definition of investment would also be expanded to include agreements giving control over domestic sole proprietorships, partnerships, and companies as well as acquisition of domestic sole proprietorships, partnerships, or companies.

The Legislature is expected to review these bills during its 2019 fall session at the latest.

For more information on investing in Taiwan, please contact Christine Chen at

Do social media influencers need to disclose partnerships?

Social media influencers are the celebrities of the internet age, with their every movement watched closely by followers and media alike. This can have its advantages and disadvantages, as just recently a well-known influencer in Taiwan was fined by the Taipei City Department of Health for posting a review of an at-home cervical cancer test kit. The government determined that her behavior constituted advertising of a product with a medical purpose that had not received the necessary regulatory approvals. This incident gives one pause to reflect, if posting a written or video review of a product online can be construed as a form of advertising, how should consumers view articles or videos posted by influencers? Are they merely natural observations made by the influencer about certain products, or do they indicate some sort of partnership between the influencer and the companies behind those products? Also, if the influencer uses a less conspicuous approach to advertise a product in an online review, how can consumers’ rights and market order be safeguarded? This article will take a closer look at these questions from a legal point-of-view.

Disclosure of Material Connections in American Law

In order to address this new method of product promotion, the U.S. Federal Trade Commission in 2009 amended the Guides Concerning the Use of Endorsements and Testimonials in Advertising, adding posts and reviews made on social media to its regulatory scope. These amendments provide that if there is a material relationship between the poster and the producer or provider of the goods or services being reviewed, this could impact the credibility of the review and the poster must therefore provide a “Disclosure of Material Connections.” For example, when posting on social media, the poster can use hashtags, such as “#ad” or “#sponsored”, to indicate the nature of the post. On top of this, the producer or provider must also guarantee that such disclosure obligations are fulfilled. That being said, are there similar regulations and applications in Taiwan?

The obligation to disclose material relationships of endorsers and advertisers under Taiwanese law

Taiwan’s current laws and regulations do not contain anything specifically directed at the sharing of experiences by influencers or celebrities. However, if such sharing involves the influencer or celebrity’s opinions, trust, discovery, or personal experience with respect to a product or service, this could fall under the scope of an “endorsement/testimonial” provided in the Fair Trade Act (FTA).

The “Statement on the Fair Trade Commission’s Directions Regarding Advertising Endorsement and Testimonials” (hereinafter “Endorsements and Testimonials Statement”) clarifies these concepts, explaining that the terms “endorsements/testimonials” not only refer to those commercial endorsements made by celebrities, but also include experience sharing by average consumers. Moreover, “endorser” as regulated under the FTA, refers to an individual or organization who offers their reflection on a product or service, or their personal experience using that product or service. Therefore, anyone from a well-known personality, to a professional individual or organization, to an average consumer, can be considered an “endorser”. Given this, if an influencer or celebrity shares their experience with or opinions on a certain product or service with the public and such behavior is advertising in nature and is likely to affect market order and consumer interests, it will be governed by the provisions of the FTA.

Because fans and consumers are savvy to the interests and recommendations made by influencers and celebrities and purchase products and services based on these, this therefore represents their trust in the personal experience such influencers or celebrities have had with the recommended products or services. If it were to come to light that an influencer or celebrity was receiving free products or services from the producing company, or if there was another material relationship between the two, this could possibly affect consumers’ desire to purchase the product.

According to the “Truthful Representations Principle” described in the Endorsements and Testimonials Statement, if a “material relationship between the endorser and the advertiser that cannot be reasonably expected by the general public” exists, such a relationship should be fully disclosed in the testimonial. If it is not disclosed, depending on the particulars of each case, the testimonial could be considered a false or misleading representation relevant to goods or services sufficient to influence trading decisions, and thus be in violation of Article 21 of the FTA. It could otherwise be deemed a violation of the blanket provision regarding unfair practices in Article 25.

In addition, the “Obligation to Disclose Material Relationships” is specifically discussed in Point 5 of the Endorsements and Testimonials Statement. This item explicitly states that if an endorsement or testimonial is posted on social network websites (including online blog posts and posts in forums), any material relationship between the endorser and the advertiser that cannot be reasonably expected by the general public, which is not fully disclosed in the advertisement, and is sufficient to affect trading order, is in violation of Article 25 of the FTA.

We can better understand the term “material relationship that cannot be reasonably expected by the general public” by taking a look at the 2013 incident in which it came to light that the Taiwan subsidiary of South Korean electronics manufacturer Samsung was paying Taiwanese netizens to post negative online review and comments about HTC products on message boards and blogs, scrub the internet of negative news and reviews regarding Samsung’s products, and contrast Samsung’s products with those of their most prominent competitors by highlighting the deficiencies of the competitors’ products. Because consumers viewing these message boards and blogs would assume that the posts were the opinions or recommendations of average consumers like themselves, they would be unable to reasonably expect that there was a material relationship between the poster and the company. That these facts were concealed by Samsung significantly affected the credibility of the posts, and given Samsung’s long-term use of this particular approach, the FTC fined the company NT$10 million (approximately US$320,000) as a warning.

Influencers and celebrities should timely disclose their material relationships with companies

In order to maintain the impression of neutrality, and boost the credibility of their online posts, influencers and celebrities recommending certain products or services will frequently downplay the material relationship they have with the providers of those products or services. However, when there is such a relationship between the two sides, the articles, pictures, or videos posted are no longer purely experience sharing, and are rather closer to advertisements in nature. Given this, the FTA specifically includes experience sharing by celebrities or average consumers in the scope of “endorsements and testimonials,” and requires that any material relationship between the experience sharer and the company behind the product or service that cannot be reasonably expected by the general public be disclosed.

A great number of consumers are accustomed to buying products or perusing services based on the tastes and preferences of influencers or celebrities they follow online. Accordingly, if these tastemakers do not sufficiently disclose their material relationships with companies whose products or services they are reviewing, average consumers may go out and make purchases based on the mistaken belief that such reviews were made objectively in good faith. Based on previous cases, influencers or celebrities that conceal such relationships could be punished by the FTC if it is determined that the concealment is severe enough to affect market order. Moreover, if it is determined that they clearly knew or were capable of knowing that their endorsement or testimonial is misleading but still made it, the influencer and the company could also be held jointly and severally liable for civil damages.

Therefore, to reduce any possible legal risk and safeguard the trust fans and followers have in their idols, influencers and celebrities should disclose any material relationships they have.

For more information on social media and advertising in Taiwan, please contact Peter Dernbach at and Ling-ying Hsu at

Employment law changes made for dispatch workers and APRC holders

Amendments to Taiwan’s Labor Standards Act (“LSA”) passed the legislature on 26 April 2019. These amendments aim to keep pace with the rise of the gig economy and an increasingly atypical workforce. Currently, there are around 150,000 dispatch employees in Taiwan. In order to provide greater protection for these dispatched employees, two key provisions were passed:

Firstly, dispatch agencies can now only sign permanent employment contracts with dispatch employees. Such a restriction prevents agencies from using fixed-term contracts to circumvent their obligations to provide statutory severance pay. In the past, agencies would sign fixed-term contracts with dispatch employees based on the period of the dispatch project. Thus, the agency could terminate the dispatched employees on the end date of the fixed-term contracts, which meant that they did not need to have a statutory cause for termination or pay the dispatched employees severance pay. This loophole has now been closed.

Secondly, if agencies do not pay wages on time, dispatch employees can request that the client enterprise pay them instead. Client enterprises can then ask for reimbursement from the dispatch agency or deduct it from the expenses payable as outlined in the contracts they’ve signed with the agency. This measure would effectively mitigate the risk that dispatched employees would not receive their wages from the dispatch agency. It could also encourage the client enterprise to select well-operating agencies to prevent any costs being incurred from paying wages to the dispatched employees.

In separate amendments made to the Labor Pensions Act, eligibility for pensions under this act has been extended to all permanent residents (APRC holders), regardless of how they gained permanent residency status (through marriage, professional employment etc). Previously, only permanent residents married to Taiwanese nationals or those on certain work permits were able to join the pension scheme under the LPA. This change will affect how other payments, such as severance, are calculated. Any seniority accrued under the old (Labor Standards Act) pension scheme will remain the same, but seniority under the LPA will only begin to count from the time the employee decides to switch to the new pension scheme. This issue was a long standing concern of the foreign community in Taiwan, as it was seen as an obstacle to people settling here long term. The government expects 15,000 permanent residents will be positively affected by these changes.

These amendments are likely to have a significant impact on the dispatch industry, and we will continue to monitor developments once these changes go into force. Similarly, the inclusion of all permanent residents in the pension scheme will go some way to ensuring foreign nationals living and working in Taiwan receive equal treatment to their Taiwanese colleagues and neighbors.

For more information on employment matters in Taiwan, please contact Christine Chen at

Can special features of a celebrity’s appearance be used to sell goods?

Given the special attention the public pays to famous people, many businesses have invited celebrities to endorse their products or services as a way of increasing their exposure and improving sales. However, the cost of obtaining such celebrity endorsements can be prohibitively expensive, forcing businesses to take a step back. In such cases, would it be acceptable to instead use some identifying aspect of the celebrity’s personality or appearance in an advertisement as a means of saving some money? For example, would using a cartoon character bearing the hairstyle and No. 17 basketball jersey sported by Jeremy Lin promoting a certain product produce the desired effect of influencing word of mouth and controlling costs? Would such an approach give rise to potential legal liabilities?

The Right of Publicity in the US and Taiwan

The “Right of Publicity” in the American legal system indicates the right of a person to prohibit others from misappropriating his or her name, image or likeness, gesture, voice, or other indicia of his or her personal identity for commercial purposes without first obtaining his or her consent. This right also enables the person in question to control and profit from the commercial use of his/her name, likeness and persona. Although there is no directly corresponding right in Taiwan, in practice, Taiwan’s courts do acknowledge infringement of an individual’s portrait rights, meaning a violation of that individual’s legal interests in his or her personality. Such individuals may also, in accordance with the Civil Code, claim relevant damages against the perpetrator. Until now, however, there have been no decided cases that deal with the specific situation in which the special features of a person’s appearance are used without their permission in Taiwan. This article will therefore rely on court judgments related to portrait rights as reference in discussing the legal risks of this approach.

Possible civil liability

According to Article 18, Paragraph 1 of the Civil Code, “when one’s personality is infringed upon, they may apply to the court for removal of the infringement; if there is a likelihood of infringement of one’s personality, they may apply for prevention of the infringement.” Article 195, Paragraph 1 also provides that “if a person has wrongfully damaged the body, health, reputation, liberty, credit, privacy, or chastity of another, or has wrongfully damaged other legal interests in another’s personality and the extent of such damage is severe, the injured person may claim a reasonable amount of monetary compensation, even if such injury is not a purely pecuniary loss.” Based on these provisions, in 2012 Taiwan’s Intellectual Property Court handed down Civil Judgment No. 101-Min-Zhu-Su-19, which referred to the American concept of the “Right of Publicity” in determining that portrait rights, when viewed in terms of the commercial use of an individual’s portrait, possess commercial value, and encompass both personality and economic rights. A party that engages in the unauthorized use of the rights holder’s name, image, or other aspect to obtain benefits is in violation of the rights holder’s publicity rights. This judgment also explained that portrait rights are the right of an individual to decide whether their image or likeness, exhibiting distinctive aspects of their personality, may be publicized, and that such rights involve personality interests. Therefore, portrait rights should be classified as the “personality rights” of Article 18 of the Civil Code, as well as the “other legal interests in one’s personality” of Article 195, Paragraph 1, and should be protected as such.

According to the judgment, portrait rights allow the rights holder to decide whether and how their image or likeness is used, involve personality interests, and are economic rights in nature in that they possess commercial value when used in certain ways. However, celebrities should also have the right to decide whether to publicize the special or identifiable aspects of their appearance or personality, and to control the commercial use of these aspects. Such rights should therefore also be classified as the “personality rights” and “other legal interests in one’s personality” provided in the Civil Code.

Accordingly, using the identifiable gesture, voice, or other special feature of a celebrity’s appearance in an advertisement to sell products without their permission is likely to be considered an infringement of that celebrity’s personality rights and interests. The celebrity in question may request removal of the infringement, in accordance with Article 18 of the Civil Code, and if the infringement is severe, may claim emotional distress damages under Article 195, Paragraph 1. There is currently no clear definition of “severe infringement” of personality interests in Taiwan, and no consensus on what would constitute such infringement in practice, either. However, as expressed in the above-mentioned judgment, and in the Taiwan Taipei District Court’s Civil Judgment No. 96-Su-2645, if the person whose portrait rights were infringed is a public personality, using their image for commercial purposes without their permission is undoubtedly a case of “severe infringement”, in that such image possesses considerable economic value.

In addition, the commercial value in a celebrity’s image or persona also entails his or her economic rights in those characteristics (referring to the holdings of the Intellectual Property Court’s Civil Judgments No. 101-Min-Zhu-Su-19 and No. 105-Min-Zhu-Su-38). Celebrities may thus, in accordance with Article 184 of the Civil Code, also request compensation for economic loss if the identifiable aspects of their appearance or personality are used without their permission. Furthermore, as economic rights are used to understand the infringement of a person’s publicity rights, such infringement would be akin to someone using that person’s property to obtain benefits without having first received the property owner’s permission. In this case, the benefits obtained by the infringing individual from such use rightfully belong to the property owner, who can, by claiming unjust enrichment, request the return of those benefits to them (see the Taiwan Taipei District Court’s Civil Judgment No. 96-Su-2645 and the Intellectual Property Court’s Civil Judgment No. 105-Min-Zhu-Su-38).

Possible liability under the Fair Trade Act

Furthermore, would using a celebrity’s gesture, voice, or other distinguishing aspect of their personality in an advertisement constitute a violation of the Fair Trade Act? The Taipei High Administrative Court’s Administrative Judgment No. 89-Su-3144 held that whether the content of an advertisement is false or misleading depends on the awareness of the party being advertised to and should be determined based on the full content of the advertisement, rather than on certain parts. Also, according to the Taiwan High Court’s Civil Judgment No. 96-Chong-Shang-323, if the advertising company uses a celebrity’s image for a commercial without having received that celebrity’s prior authorization and such use is sufficient to cause consumers to mistakenly believe that the celebrity is endorsing the advertising company’s products, this is a blatant violation of the legal principle that the representations in an advertisement must be truthful, expressed in Article 21 of the Fair Trade Act. Given the above, an advertisement whose content, when considered in its entirety, contains an unauthorized use of the special gesture, voice, or other aspect of a celebrity’s appearance, could be found to constitute false endorsement and therefore a violation of Article 21. If the advertisement involves other deceptive behavior or free-rides on the commercial reputation of another, this could also be deemed a violation of Article 25.


Although in practice there have been no relevant court judgments in Taiwan that specifically discuss the use of a celebrity or famous person’s gesture, voice, or other distinguishing aspects of their personality in advertising, when considering those judgments that deal with portrait rights, one can conclude that such special features are the celebrity’s legal interests in his or her personality protected under the Civil Code. Furthermore, portrait rights also involve the celebrity’s economic rights in those features. Given the forgoing, if such features are infringed upon, the celebrity may request both emotional distress damages and compensation for economic loss. Lastly, advertising that has not received the authorization of the celebrity it depicts could be considered false advertising under the Fair Trade Act and violate fair trade standards. Therefore, companies looking to keep marketing budgets low should think twice before adopting this inexpensive but highly risky method.

For more information on publicity rights in Taiwan, please contact Peter Dernbach at and Ling-ying Hsu at

Frequently asked patent questions

1. Can a Patent Cooperation Treaty (PCT) application be filed as a national phase entry application in Taiwan?

No, a PCT application cannot be filed as a national phase entry application in Taiwan, because Taiwan is not party to the PCT. However, Taiwan is a member of the WTO, and a PCT application filed in a WTO member state can serve as the basis for a priority claim in Taiwan. Taiwan’s Patent Act allows for reciprocity with WTO member states and with countries that allow Taiwan nationals to claim priority. Please note that priority claims in Taiwan should be filed within twelve months of the filing date of the foreign application.

2. What categories of patents may be filed?

There are three categories of patents that may be filed in Taiwan:  Invention Patents, Utility Model Patents, and Design Patents.

3. What is the term of patent protection?

Terms of patent protection are assessed from the filing date of the application:

  • Invention Patent: 20 years
  • Utility Model Patent: 10 years
  • Design Patent: 12 years

4. Unpatentable items under the Taiwan Patent Act

  1. Animals, plants, and essential biological processes for the production of animals or plants, except for processes for producing microorganisms;
  2. Diagnostic, therapeutic and surgical methods for the treatment of humans or animals; or
  3. Inventions contrary to public order or morality

5. Does Taiwan’s Patent Act address innocuous disclosure?

Yes. For an Invention or Utility Model patent, an applicant may claim innocuous disclosure up to twelve months after the date of the occurrence of such disclosure; for a Design Patent, up to six months after the disclosure.

6. How long does it take for a patent to be granted?

Invention Patent applications are subject to substantive examination by the Taiwan Intellectual Property Office (TIPO) within three years from the filing date upon request by the applicant. The time frame from filing a request for examination through to a decision is typically 18-36 months.

Utility Model Patent applications are subject only to formal examination. The time frame from filing to a decision is generally about 6 months.

Design Patent applications are automatically subject to substantive examination upon filing. The TIPO will generally issue a decision within 10-12 months from the filing date.

7. Does Taiwan have a Patent Prosecution Highway (PPH)?

Yes. Taiwan uses the Patent Prosecution Highway (“PPH”) to expedite the examination process for corresponding applications filed in different intellectual property offices around the world. The PPH program can only be used for invention patents, and does not apply to utility model or design patent applications. To date, the TIPO has collaborated with the United States Patent and Trademark Office (USPTO), the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO) and the Spanish Patent and Trademark Office (SPTO). The TIPO says that applications using the PPH program on average receive their first office actions within two months from the date of the PPH request, and a decision within six months, compared to a normal time frame of 18-36 months.

8. Does Taiwan have a Patent Document Exchange (PDX)?

Yes. Taiwan currently has PDX agreements in place with the KIPO and the JPO. Both agreements permit applicants filing invention or utility model patents with the TIPO (the ‘Office of First Filing’, or OFF) to obtain an access code that can be used to file priority documents with either the KIPO or the JPO (the ‘Office of Second Filing’, or OSF). Similarly, applicants filing in Korea or Japan can obtain an access code for a priority filing in Taiwan. The TIPO requests that these codes be received within 16 months of the first filing date.

9. Is accelerated examination available?

Yes. An applicant may request accelerated examination under any of the following conditions:

The Invention Patent application’s corresponding foreign application has been allowed upon substantive examination by a foreign patent office;

  1. The EPO, JPO, or USPTO has issued an examination opinion with applicable search report on the corresponding foreign application but has not yet allowed the application;
  2. The invention claimed in the Taiwan application is essential to commercial exploitation; or
  3. The invention is related to green energy.

10. Are post-grant amendments of an invention patent possible?

Post-grant amendments of an Invention Patent are allowed, but only to delete claims, narrow the scope of claims, correct errors, or clarify ambiguous statements. Except for an amendment to correct a translation error, a post-grant amendment may not extend the scope of the claims as published in the Patent Gazette.

11. What remedies are available for infringement?

A civil suit for patent infringement may be brought as an independent civil claim in Taiwan. Civil damages are based on:

Actual damages suffered by the patent owner;

  1. The benefit to the defendant arising from the infringement of patent rights; or
  2. Reasonable royalties that may be collected from exploiting the invention patent being licensed.

Taiwan has a specialized Intellectual Property Court, which acts as the court of first instance for civil infringement claims.

12. Is border enforcement available?

Yes. Patent owners may apply to Customs to detain infringing imports or exports. The patent owner will need to post a security bond with Customs. The patent owner must also file an action for patent infringement within 12 days of filing the application to Customs.

For more information regarding patents in Taiwan please contact Peter Dernbach at and Betty Chen at

Digital currency regulation in Taiwan

Digital currency has been around since currency account balances were first stored on digital machines (i.e., computers). Later, banks effected electronic transfers of this digital currency. Credit card and debit cards then allowed consumers to make purchases using digital currency. Early digital currency was digitized fiat currency issued by governments and held with and transferred among financial institutions and consumers. Over the past two decades, advances in technology have allowed currencies to be issued by organizations other than governments and transferred and held by organizations other than financial institutions.

As technology advances, market participants are increasing in number and becoming more decentralized. Financial market regulators are struggling to keep pace with the financial products and services that technological innovation is making possible.

Some regulators have moved more swiftly than others to address market changes resulting from this technological innovation. Although Taiwan’s financial and banking regulators have not moved as rapidly as, say, their counterparts in Singapore, in recent months an encouraging trend is taking shape. Possibly taking cues from the Monetary Authority of Singapore, Taiwan appears to be consolidating the regulation of digital currency related issues under a single regulatory body, the Financial Supervisory Commission (the “FSC”). Placing primary responsibility for the regulation of digital currencies in the hands of a central authority will likely result in a more comprehensive, cohesive regulatory landscape.

Recent legislative amendments to the Money Laundering Control Act (the “MLCA”) are already paving the way for the FSC to regulate cryptocurrency transactions more closely. Passed in November 2018, the amended MCLA states that platforms selling virtual currency (“VCP”) fall under the purview of the MCLA and shall be regulated as financial institutions. As the FSC is the primary regulator with respect to other financial institutions, it is expected that it will also oversee VCPs.

The FSC has already begun exerting its influence over virtual currency exchange by prohibiting Taiwan banks from entering into cryptocurrency transactions in which the identity of the e-wallet holder is unknown.

FSC Chairman Wellington Koo recently announced that the FSC will also be moving forward to provide guidance on security token offerings. Mr. Koo promised such guidance by the end of June of this year.

In addition to regulation of cryptocurrencies, the trend towards a more unified, consolidated approach to digital currency regulation is evident in the electronic payment area. Currently, electronic stored value cards (電子票證) are regulated separately from other forms of electronic payment (電子支付). The FSC expects to send a draft comprehensive electronic payment law to the Legislative Yuan as early as March of this year. This draft law will place the regulation of all forms of electronic payment (including electronic stored value cards) under the same regime.

Taiwan is proceeding cautiously into the digital currency world. However, recent announcements by the FSC indicate that under their guidance the pace of change may quicken in 2019. We will continue to monitor the developments in this area closely.

For more information, please contact Gregory Buxton at

Jeremy Olivier also contributed to this update.

New reporting requirement for Taiwanese companies

The recently amended Taiwan Company Act (2018) requires most companies to report their board members, registered managers, and major shareholders online by 31 January 2019. To report, log on to the Company Transparency Platform. This site is in Chinese only at the time of writing.

If the company’s registered representative (typically the chairman) is a foreign national without a Taiwan national health card or Digital Certificate IC card, the company will generally need to apply for a Business ID (公司工商憑證) card to use the Company Transparency Platform. Business ID cards can be applied for online from the Taiwan Ministry of Economic Affairs’ Certificate Authority. This site is currently only in Chinese. The company’s registered seals (chops) will be needed during the application process.

Private limited companies, closed companies, and companies limited by shares are subject to the reporting requirement unless they are an exempt business entity.

Business entities exempt from the reporting requirement include listed companies, reporting companies, branches of foreign companies, and representative offices.

Board members include directors and supervisors. Registered managers include the registered managers (such as the CEO or General Manager) of a Taiwan limited company or a company limited by shares. Companies do not need to report managers of branches.

A major shareholder is any shareholder who owns more than 10% of the company. Only one level of shareholders must be reported. Shareholders of parent or grandparent companies do not have to be reported

The following information must be reported about each individual:

  1. Names
  2. Nationality
  3. Date of birth or date of incorporation registration
  4. ID Number
  5. Shareholding or capital contribution

From 2020 on, these reports must be filed for the preceding calendar year between March 1st and March 31st of the following year. For example, you will need to report your company’s responsible persons and major shareholders in 2019 between March 1st and March 31st 2020.

Any changes to reported information must be reported within 15 days of the change.

Failure to report or false reports will trigger a letter to remedy the report by a deadline. Failure to remedy by deadline will result in a fine of NT$50,000 to NT$500,000. Failure to remedy after a second warning letter can result in a fine of NT$500,000 to NT$5 million. The director registered as the company’s representative is personally liable for these fines. In serious cases, the company’s registration can be revoked.

The new reporting requirement is part of Taiwan’s efforts to combat money laundering.

For questions about or assistance with reporting please contact Michael Fahey at and Daniel Chen at

Security interests in IP rights in Taiwan

Security interests in IP may be recorded with the Taiwan Intellectual Property Office (TIPO) as a pledge, either by the rights owner or by the pledgee. The recordal of IP security interests in Taiwan only applies to registered trademarks or granted patents. A pending trademark or patent application may not be the subject of a pledge. It should be noted that an unrecorded pledge may not be asserted against third parties. Also, where a pledge on IP rights is altered or extinguished, the same should also be recorded with the TIPO.

A short-form version security agreement is acceptable for recording a pledge. The value of the pledge must, however, be indicated in the agreement. The pledge documents need not be notarized or legalized.

In order to obtain a first priority security in IP rights, before recording a pledge, rights holders should first conduct searches for senior pledges on the register that may affect their rights. To maintain the validity of the IP rights pledged, the security agreement should specify which party is obligated to pay the renewal or annuity fees for said rights. A pledge of rights recorded with the TIPO remains effective in perpetuity unless it is terminated.

Acquiring a security interest in trademarks or patents by means of a pledge is a straightforward and inexpensive means of leveraging intellectual property assets in Taiwan.

For more information on patent matters in Taiwan, please contact Peter Dernbach at or Betty Chen at

Working in Taiwan as a creative professional part I: the freelance artist work permit

This is the first of two FAQs on how creative professionals can live and work in Taiwan after the Act for the Recruitment and Employment of Foreign Professionals came into force in February 2018.

Part I focuses on how to obtain a freelance artist work permit. Part II focuses on how to obtain an employment gold card as a special professional in the field of culture and arts. Click on the question to be taken to the answer, click back to return to the list of questions.

Freelance Artist Work Permit FAQ

1. What kinds of artists are eligible to apply for a freelance artist work permit?

2. What about novelists, poets, and other literary writers?

3. What does Performing and Visual Arts include?

4. What other educational and experience requirements are there for a performing or visual artist?

5. What kind of work can I do as a freelance performing or visual artist?

6. What is publishing?

7. What other educational and experience requirements are there for an artist in the publishing field?

8. What kind of work can I do as an artist in publishing?

9. What are motion pictures/television/popular music?

10. What other educational and experience requirements are there for an artist in motion pictures, television, or popular music?

11. What awards are recognized by the Ministry of Culture for motion pictures, television, and popular music?

12. What kind of work can I do as an artist in motion pictures/television/popular music?

13. What does crafts include?

14. What other educational and experience requirements are there for an artist in crafts?

15. What kind of work can I do as an artist in crafts?

16. What if I do not have one of the required qualifications for performing and visual arts, publishing, motion pictures/television/popular music, or crafts?

17. What if my application is rejected? Are there any other paths to working in Taiwan as an artist?

18. Can residents of Hong Kong and Macau apply for the freelance artist work permit?

19. Will I be able to apply for residence based on a freelance artist work permit?

20. Will I be able to enroll in Taiwan’s National Health Insurance (NHI) program based on a freelance artist work permit?

21. Can I do other work to support myself?

22. Who reviews applications for freelance artist work permits?

23. What documents are required to apply?

24. How do I fill out the application?

25. What kind of documentation should I submit to show my qualifications?

26. Does my documentation such as diplomas, letters from former employers, or promotional materials need to be translated into Chinese?

27. How and where can I apply?

28. How long does the application process take?

29. Can I extend a freelance artist permit?

30. How many artists have received the freelance artist work permit?

31. What are their nationalities?

32. Where can I read the law and regulations myself?

33. Who can I contact in the government if I have questions?

1. What kinds of artists are eligible to apply for a freelance artist work permit?

A foreign national artist is eligible to apply if he or she has a track record in one of the following fields:

(a) Performing and Visual Arts,

(b) Publishing,

(c) Motion Pictures/Television/Popular Music,

(d) Crafts (Applied Arts), or

(e) Other artistic fields.

An artist who works in a field other than (a)–(d) above may make a special application for the freelance artist work permit for other artistic fields (e). Please also see the question about lack of required qualifications below. The Ministry of Culture has emphasized that it is flexible about both fields and qualifications, that it recognizes that the arts are always evolving, and that it will consider applications from artists who do not fall neatly into the categories described in (a) to (d) above.

2. What about novelists, poets, and other literary writers?

They are included in ‘Publishing’. See Question 6.

3. What does Performing and Visual Arts include?

They include:

(a) Music (other than popular music),

(b) Dance,

(c) Drama,

(d) Environmental arts, and

(e) Photography.

4. What other educational and experience requirements are there for a performing or visual artist?

One of the following:

(a) Ten years of experience with evidence of original and outstanding work,

(b) MA degree and five years of experience in the field,

(c) PhD and three years of experience in the field, or

(d) Original and outstanding work accompanied by a letter of recommendation or other documentation issued by an official agency in the artist’s home country.

5. What kind of work can I do as a freelance performing or visual artist?

In addition to creating, exhibiting, or performing works, an artist in this class can also do related work involving research, surveys, production, and promotion. The artist can also hold workshops, give lectures, act as a judge, do criticism, and participate in competitions. All work should be related to a performing or visual art.

6. What is publishing?

This is a broad category focused on the publication of literary or artistic works in print newspapers, magazines, or books. You can qualify if you are an author, critic, editor, or translator. Literary works expressly include graphic works.

You can also qualify if you a literary agent, exhibition planner, or researcher whose work involves print literature.

7. What other educational and experience requirements are there for an artist in the publishing field?

Eight years of experience in the field plus one of the following:

(a) Editor in chief or executive at major international print newspaper, magazine, or publisher,

(b) Winner of major international award for literature, or graphic literature or winner of major national prize in these fields in the writer’s country of origin, or

(c) Original and outstanding work in the field of publishing accompanied by a letter of recommendation or other documentation issued by an official agency in the writer’s home country.

8. What kind of work can I do as an artist in publishing?

You can create textual or pictorial works with artistic value, act as a literary agent, or edit or translate such works. You can also plan exhibits of the same and do related research. All ‘publishing’ work should be related to texts or pictorial works with artistic value.

9. What are motion pictures/television/popular music?

Artists in these fields are eligible to apply if the artist:

(a) Creates, produces, or performs in motion pictures or television, or

(b) Creates, produces, or performs popular music.

You may also be eligible to apply if you promote, give workshops on, lecture on or critique motion pictures, television, or popular music, or if you participate as a contestant or act as an agent in these fields. The freelance artist work permit is also available to those who work in management or technology related to these fields.

10. What other educational and experience requirements are there for an artist in motion pictures, television, or popular music?

You must have received or been one of the following:

(a) Nomination for a Taiwanese or international film, television, or popular music award or other award recognized by the Taiwan Ministry of Culture,

(b) Associate professor or above in a department of film, television, or popular music at a foreign university, or

(c) Head of a major international movie, television or record company.

11. What awards are recognized by the Ministry of Culture for motion pictures, television, and popular music?

Motion Pictures


Competition awards at:

(a) Golden Horse Awards,

(b) Golden Harvest Awards for Outstanding Short Films,

(c) Taipei Film Festival,

(d) Kaohsiung Film Festival, or

(e) Taiwan International Documentary Festival.


(a) Competition or parallel selection awards at Category I or Category II International film festivals, or

(b) Competition awards at Category III or Category IV international film festivals.

The many international festivals currently recognized by the Ministry of Culture are listed here. Examples include Cannes International Film Festival (Category I), the Tribeca Film Festival (Category II ), the Sydney Film Festival (Category III), and the San Francisco International Lesbian and Gay Film Festival (Category IV).


(a) Golden Bell Awards,

(b) International Emmy Awards,

(c) Seoul International Drama Awards,

(d) New York Festivals International Television & Film Awards,

(e) British Academy Television Awards, or

(f) AIB International Media Excellence Awards

Popular Music

(a) Grammy Awards,

(b) American Music Awards,

(c) BRIT Awards,

(d) MTV Europe Awards,

(e) Golden Melody Awards,

(f) Golden Indie Awards,

(g) NRJ Music Awards,

(h) Japan Record Awards,

(i) Billboard Music Awards,

(j) Juno Awards,

(k) Mercury Prize, or

(l) Golden Disc Awards.

12. What kind of work can I do as an artist in motion pictures/television/popular music?

You can:

(a) create, produce, perform in, or promote motion pictures, television, or popular music;

(b) hold workshops or give lectures related to motion pictures, television, or popular music;

(c) criticize and judge motion pictures, television, or popular music;

(d) act as an agent in the motion picture, television, or popular music business; or

(e) do management or technical work related to motion pictures, television, or popular music.

13. What does crafts include?

Crafts or applied arts means creating or teaching in any of the following mediums:

(a) Leather,

(b) Ceramic,

(c) Stone,

(d) Glass,

(e) Fiber (dying, weaving or knitting),

(f) Wood,

(g) Bamboo,

(h) Paper,

(i) Metal,

(j) Paint, or

(k) Mixed media.

14. What other educational and experience requirements are there for an artist in crafts?

You must have done, received or been one of the following:

(a) Nomination for a recognized Taiwanese or international crafts award,

(b) Associate professor or above in a department of crafts (applied arts) at an international university, or

(c) Original and outstanding work in the field of crafts accompanied by a letter of recommendation or other documentation issued by an official agency in the artist’s home country.

15. What kind of work can I do as an artist in crafts?

You can create works in any of the media listed in Question 13 or teach the craft.

16. What if I do not have one of the required qualifications for performing and visual arts, publishing, motion pictures/television/popular music, or crafts?

The Ministry of Culture will consider your qualifications on a special basis.

17. What if my application is rejected? Are there any other paths to working in Taiwan as an artist?

Yes. In this case, you will need to find a qualified employer to hire you to work as an artist. You can review the requirements on the Workforce Development Agency’s EZ Work Taiwan website.  Your employer may be able to obtain an exemption to some of the requirements through the Consultation Mechanism. Artist work permits can be issued for full time work and for one-off performances or events. In the case of full-time work, you will be able to apply for a visa and an ARC after the work permit is issued

18. Can residents of Hong Kong and Macau apply for the freelance artist work permit?


19. Will I be able to apply for residence based on a freelance artist work permit?

Yes. You will need to first adjust your visa status with the Ministry of Foreign Affairs and then apply for an Alien Residence Certificate (ARC).

20. Will I be able to enroll in Taiwan’s National Health Insurance (NHI) program based on a freelance artist work permit?

Yes, but you will meet a six month residence period first if you do not have an employer. To meet the residence requirement, you must be physically present in Taiwan for a total of six months although you may make one trip abroad for no more than 30 days. The time spent abroad does not count toward the six months residence required.  If you are hired by an employer, you are immediately eligible for health insurance.

21. Can I do other work to support myself?

No. The holder of a freelance artist work permit can only work in his or her permitted field. For example, the artist cannot moonlight as a language teacher or a programmer on the side. This kind of work would be illegal and would result in a fine of NT$30,000 to NT$150,000. Any kind of illegal work will also result in automatic and largely unappealable deportation plus a re-entry ban.

22. Who reviews applications for freelance artist work permits?

The Ministry of Labor’s Workforce Development Agency reviews them, in consultation with the Ministry of Culture. The Ministry of Culture will review applications from artists in fields other than visual and performing arts, publishing, motion pictures/television/popular music, and crafts. It will also review qualifications that are unclear or do not fall into the required qualifications. State clearly in your application that you are applying in the ‘Other’ category or that you want a special review of your qualifications by the Ministry of Culture.

23. What documents are required to apply?

(a) Application Form

(b) Copy of passport

(c) Application fee (NT$500) receipt

(d) Documentation of required qualifications

(e) Other documents requested on a case by case basis

Typically any documents requested under (e) will be requested after you have filed an application with (a)-(d) above. Note that if documentation of your qualifications comes from overseas, you may be required to have your documents notarized and then certified (AKA ‘legalization/authentication) at a Taiwan embassy overseas. We understand that in practice notarization and legalization of documents is not usually required.

24. How do I fill out the application?

The application is very simple and largely self-explanatory. There are a few fields that you may need help with.

The ‘Intended work schedule in Taiwan’ field should be a couple of sentences explaining what you will be doing in Taiwan and how often. In practice, a simple statement of how often the artist will perform and participate in related events like workshops has worked.

The ‘Expected result and benefits’ should be another simple, general statement about how the artist’s work will benefit Taiwan and contribute to international cooperation between artists. You might mention the contribution you can make in introducing Taiwanese artists to international artists and audiences if you are able to introduce Taiwanese artists to your network overseas. Again this statement should be no more than two or three sentences.

‘Branch code’ on the second page means the post office branch you used to pay the application fee by postal remittance.

The ‘Manpower Agent’ referred to on the second page is the name of the immigration agent you have retained (if any) to file your application. Your agent will fill this section in.

25. What kind of documentation should I submit to show my qualifications?

This depends greatly on what kind of artist you are and which qualification you are trying to show. You will need to submit copies of your diploma(s) and letters from former employers to demonstrate that you meet the education and experience requirements. In practice, there is some flexibility about demonstrating experience. For example, letters from employers such as schools where the artist taught in her field in combination with letters from other band members have been used to document experience.

We also understand that evidence of awards for your work is considered to be important. It can be a good idea to submit a letter from the organization that made the award explaining who it is, the nature of the award, and its significance. You may also want to submit promotional materials and coverage in print media.

A supporting letter of recommendation from a reasonably well known Taiwanese artist can also be helpful.

You should not submit a large number of documents or feel that you need every one of the documents listed above. The objective is to clearly show that you have any required educational credentials and a proven track record in your field.

It is of course essential that all documents and information be genuine and truthful. Submitting false documents can result in criminal charges of forgery and false representations to the government. You will also make it more difficult for other artists to live and work in Taiwan in the future.

26. Does my documentation such as diplomas, letters from former employers, or promotional materials need to be translated into Chinese?

Yes but these translations do not have to be complete translations. Translations of key sections related to educational credential, experience, originality, and quality of work are enough.

27. How and where can I apply?

You can apply online on the Ministry of Labor’s EZ Work Permit site. The site is poorly designed and has imperfect English. Nonetheless it is usable with some patience. The site is bilingual once you have registered an account.

If you have trouble, take your application documents to the Taiwan Ministry of Labor Workforce Development Agency’s office in Taipei and apply in person. The address is:

10F, No. 39 Zhonghua Road Section 1, Taipei City, Taiwan

It is also possible to apply by mail if you are in Taiwan. You will need to pay the fee by means of a postal remittance from a Taiwan post office.

28. How long does the application process take?

In practice, it takes most applicants two or three months to gather the documents. It takes seven working days to process an online application if the Workforce Development Agency does not ask you for additional documents. Many candidates are asked for additional documents though.

29. Can I extend a freelance artist work permit?

Yes. A freelance artist work permit can be extended for up to three years. You will need to show evidence that you have been active and productive in your particular field during the original work permit period. In general, you should apply for an extension during the four months before your work permit expires.

30. How many artists have received the freelance artist work permit?

18 (October 31 2018).

31. What were their nationalities?

1. Japan: 2

2. Malaysia: 6

3. Philippines: 1

4. US: 3

5. India:  1

6. France: 1

7. Bhutan: 1

8. Hong Kong: 1

8. Others: 3

32. Where can I read the law and regulations myself?

You can read the Act for the Recruitment and Employment of Foreign Professionals here. The freelance artist work permit is covered in Article 10. There is also a useful Examination Manual for work permit applications under the Act for the Recruitment and Employment of Foreign Professionals. As of this writing the Examination Manual is available only in Chinese: 外國專業人才延攬及僱用法工作許可(審查作業手冊).

You can read the regulations governing applications for the freelance artist work permit here.

33. Who can I contact in the government if I have questions?

The current designated contacts at the Ministry of Labor for freelance artists are:

(a) Mr. Zheng Zhe-xin (鄭哲欣) for questions about the laws and regulations. (02)8995-6177.

(b) Mr. Huang Hu-qun (黃胡群) for questions about the application process. (02)2380-1722.

The current designated contact at the Ministry of Culture for freelance artists is:

(a) Ms. Wang Meng-zhe (汪孟哲). (02)8512-6772.

Please check this list of contact windows on the official website for the Act for the Recruitment and Employment of Foreign Professionals. The list also has email addresses.

Best practices to avoid trade secret theft

For companies taking a long-term view of protecting their intellectual property rights, trade secrets may offer an appealing alternative to a patent-based approach. Each option comes with its own tradeoffs. A patent provides its owner with an enforceable monopoly on the patented innovation, but only for a limited time, after which the owner will lose any special right to the invention or method disclosed in the patent. This is often the best option, especially for innovations which could soon become obsolete, or which are likely to be discovered by other parties. On the other hand, trade secrets have no expiry date, and the owner retains an exclusive right as long as the innovation can be kept secret from other parties. There is also no need to register trade secrets with the authorities in order to gain protection, whereas patents are only awarded after an application process that is often lengthy, complicated, and expensive. But trade secrets have their downsides as well, most notably that another party which independently arrives at the same discovery has every right to make use of it.

Although trade secrets might be a more suitable long-term strategy than patents for many companies, they are often overlooked or poorly understood, and many companies which rely on trade secrets may not be taking adequate steps to protect them. In some cases the lack of sufficient protective steps may even mean that the innovation in question will not meet the legal definition of a trade secret, and will not be protected as one under the law. This can be seen by looking at the way trade secrets are defined under Taiwanese law.

An innovation must meet the following three criteria to be considered a trade secret under Taiwan’s Trade Secrets Act:

(1)   It must not be known to persons generally involved in the field.

(2)   It must have economic value, actual or potential, due to its secretive nature.

(3)   Its owner must have taken reasonable measures to maintain its secrecy.

The first two requirements may seem obvious. It is the third requirement that can create problems for a company trying to protect its trade secrets. Due to the requirement imposed by the third part of the definition, a company which has not taken “reasonable measures” to maintain secrecy does not have a trade secret at all, and its innovation will not be protected by the Trade Secrets Act. So what would constitute a “reasonable measure” in this context?

Many companies may not have considered whether their protective measures would be considered reasonable under the Trade Secrets Act, and these same companies may unfortunately fall short when putting protective measures in place. In many cases the only step taken to protect a trade secret will be the use of a non-disclosure agreement (NDA). While an NDA is certainly a good idea, there are additional, relatively easy steps that can be taken to increase protection. This is where best practices come into play. These could include any or all of the following:

  • Ensuring that the trade secret is protected using adequate, demonstrable security measures.
  • Using password protection on computers and electronic files containing information pertaining to the trade secret.
  • Protecting access to the premises with measures such as card-based entry, a front desk with receptionists controlling access to the office, etc.
  • Having a clear, written internal policy for trade secret protection, including regular training sessions or workshops to ensure that all employees are aware of proper procedures.
  • Taking measures to prevent employees from compromising security by downloading unauthorized software, bringing sensitive documents home with them, or using personal USB drives and other storage devices, etc.

This list is by no means exhaustive, and in fact there is no list of requirements for meeting the definition of “reasonable measures”.[1] That said, failure to implement any measures of this kind could be used as evidence to show that the protected information was never a trade secret to begin with, having failed to meet the third requirement under the law that there must be “reasonable measures to maintain its secrecy.” Clearly an NDA is not always going to be enough.

There is another major benefit to implementing best practices: aside from just meeting the legal standard of having “reasonable measures” in place, such best practices could also prove to be indispensable tools for proving that theft of trade secrets has indeed occurred when an alleged breach being considered by a court. For example, password protection for electronic files also brings the possibility of tracking exactly who had access to the relevant information and when. Records of this kind could make all the difference when trying to prove that a specific individual engaged in trade secrets theft. And simply allowing all employees to have unmonitored, unfettered access to trade secrets could make it virtually impossible to prove who might have leaked the information.

One important exception to all of the foregoing which should be mentioned: for foreign nationals doing business in Taiwan with trade secrets in play, there is a further issue that the Trade Secrets Act relies on reciprocity when it comes to protection of a foreign party’s trade secrets. In particular, consider the following at Article 15:

A foreign national’s trade secret(s) will not receive protection in the R.O.C., if the foreign national’s home country has not signed a bilateral trade secrets protection treaty or agreement with the R.O.C., or does not provide protection to trade secrets owned by R.O.C. nationals according to the laws and regulations of the foreign national’s home country.

In other words: if you are a foreign national, all of your attempts at best practices may be in vain if your home jurisdiction does not have a bilateral trade secrets agreement with Taiwan, or does not protect the trade secrets of Taiwanese nationals. In such a situation, your trade secrets will not be protected in Taiwan, even if you take all the proper precautions outlined above.[2] For this reason, it is recommended that foreign nationals in particular seek out legal advice when using trade secrets in Taiwan. There may be other options to consider in this situation, but they would need to be determined on a case-by-case basis with the advice of a lawyer.

Clearly, trade secrets protection can present difficult problems. But by taking simple precautions, and by hiring legal specialists to formulate an appropriate regime of trade secrets protection for your company, major disasters can be avoided. And when it comes to issues involving trade secrets protection, preventing bad outcomes before they arise is inevitably safer, less stressful, and above all cheaper than dealing with a trade secrets breach after the fact.

For more information about trade secrets protection and other intellectual property matters in Taiwan, please contact Christine Chen at

Legal intern Wolf Cho contributed to this article.

[1] For an example of this, see 104年度智訴字第14號, in which the court held that reasonable protective measures had been implemented, including the use of confidentiality agreements, the use of document shredders, and a system of graded levels of confidentiality for internal documents, with corresponding restrictions to access.

[2] See, for example, 96年度抗字第1641號 (Interlocutory Appeal), in which the Taiwan High Court stated that the appellant’s status as a British Virgin Islands company combined with the absence of any reciprocal arrangement for trade secrets protection between Taiwan and the British Virgin Islands meant that the appellant’s trade secrets would not be afforded protection in Taiwan.