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

Restrictions on unregistered foreign companies in Taiwan

We are often asked whether a foreign business with no registered presence in Taiwan can conduct marketing or other activities. The answer depends very much on the specific facts of the proposed activity, but in general unregistered foreign companies must not “transact business or perform legal acts in the course of business.” Taiwan Company Act §§19,371, and 386.

A person who transacts business or performs legal acts in the course of business in the name of an unregistered foreign business is subject to criminal liability including a fine of up to NT$150,000 and up to one year imprisonment.

Transacting Business

A review of the cases on transacting business shows that the Taiwanese courts use a totality of the circumstances test. Factors that have been considered include:

  1. Relationship of business transacted in Taiwan to the foreign company’s line(s) of business,
  2. Continuity and repetition of commercial activities,
  3. Fixed business premises,
  4. Hiring of employees, and
  5. Business contacts, price negotiations, and payments.

Most of the cases particularly emphasize factors 2, 3 and 4.

For example, the responsible person of a Hong Kong company that ran a legitimate but unregistered cartoon licensing business was convicted of unlawfully transacting business in Taiwan. The Taiwan business had office space and a number of employees. It also collected substantial royalties and provided post-sales services.[1]

A very typical case involved an unregistered foreign futures trading business that also had premises and employees. The business also took orders for margin currency trading. The responsible person was also convicted for unlawfully transacting business. Cases such as this one involving unregistered financial services business (often boiler room operations) are the most common type of case that results in prosecution and conviction.[2]

In contrast, the responsible person of a Hong Kong company that privately sought investors in Taiwan was found not guilty of transacting business in Taiwan despite the fact that investors invested in his company.[3] The court reasoned that this type of fundraising was unrelated to the Hong Kong company’s primary business and did not constitute transacting business even though the company was not registered in Taiwan.

A foreign company may transact business in Taiwan by establishing a branch or subsidiary in Taiwan.

Legal Acts in the Course of Business

A legal act in the course of business is “act that objectively suffices to create a predetermined legal relationship.”[4] For example, using the name of a dissolved company to entering into contracts to sell a vehicle and distribute auto parts are examples of legal acts in the course of business. Another example is the endorsement of a promissory note on behalf of the same defunct company. [5]

The Ministry of Economic Affairs has provided further guidance in a letter of interpretation that lists the following as legal acts in the course of business: “signing contracts, price quotations, price negotiations, bids, and procurement.”[6]

The takeaway from this somewhat abstract discussion is that the unregistered representative of a foreign company should not come to Taiwan and engage in legal acts such as signing contracts, engaging in price negotiations, or submitting bids on government contracts. If the representative wishes to engage in these activities in Taiwan, she and foreign company should register a representative office in Taiwan. Needless to say, she is perfectly free to engage in these activities with Taiwanese business people outside of Taiwan.

An interesting case involving legal acts in the course of business suggests that at least in some cases, marketing activities by an unregistered company may be fine. The defendant was a Taiwanese national who was in process of setting up a finance company.[7] Before the company was registered, he printed up marketing materials for the company’s post formation activities using the unregistered company’s name. The court held that the distribution of marketing materials was an act that did not suffice to create a legal relationship. Hence the Court concluded that no legal acts in the course of business had been performed and found the defendant not guilty.

Policy Considerations

Policy considerations behind the prohibition on unregistered foreign companies transacting business in Taiwan or performing legal acts in the course of business include:

[These rules] are intended to prevent foreign corporations from competing unfairly in Taiwan by doing business and earning profits on the one hand while evading Taiwanese regulation on the other. If foreign companies are not regulated in this manner, they might use their vast monetary resources and advanced technology to earn huge profits in Taiwan without being subject to Taiwan’s various restrictions on legal persons such as the benefits and protections available under the [Taiwan] Labor Standards Act, the various types of insurance available under the [Taiwan] National Insurance Act, and the various tax obligations under Taiwanese tax law. This would be unfair to Taiwanese companies and detrimental to their competitiveness. Most leading jurisdictions have similar rules.[8]


The restrictions on transacting business and performing legal acts in the course of business preclude an unregistered foreign company from engaging in extensive business operations in Taiwan and at least theoretically from coming to Taiwan to negotiate or sign contracts with Taiwanese parties in the course of ordinary activities. Nonetheless, there is some room for unregistered foreign companies to engage in limited marketed activities or corporate transactions without running afoul of these restrictions. The analysis of which activities are permissible is highly fact specific and a Taiwanese lawyer should be consulted in advance of any proposed activities in Taiwan by an unregistered foreign company.

For more information on company formation and corporate matters in Taiwan, please contact Chen Hui-ling at

[1]臺灣高等法院 92 年上易字第 2625 號刑事判決

[2]臺灣臺中地方法院 102 年金訴字第 6 號刑事判決

[3]臺灣高等法院 104 年上字第 1036 號民事判決

[4]台灣高等法院86年上易字 2532刑事判決

[5] Ibid.


[7] The prohibitions on transacting business or performing legal acts in the name of a unregistered company also apply more generally to Taiwanese nationals.

[8] 灣高等法院 92 年上易字第 2625 號刑事判決

Merger control FAQ (part 2 – relevant market)

This article is the second installment in our FAQ on merger control in Taiwan (Here you can read part one).  Here, we set out in broad brush strokes the factors and methodologies that the Fair Trade Commission (the “FTC”) and Taiwan courts use to determine the relevant market in horizontal merger cases.

The Fair Trade Act (the “FTA”) defines the relevant market with respect to any particular product or service as the geographic area or scope in which firms compete with respect to such product or service.  In 2015, the FTC issued relevant market definition guidelines (the “Taiwan Guidelines”) based on the European Union’s Commission Notice on the Definition of the Relevant Market for the Purposes of Community Law, the United States’ Federal Trade Commission’s 2010 Horizontal Merger Guidelines, and the FTC’s own past cases.[1]

According to the Taiwan Guidelines, demand substitution is the primary market constraint that the FTC evaluates in its analysis of relevant markets; however, the FTC may also evaluate supply substitution as part of its analysis.

The FTC evaluates the effect of these competitive constraints to define the relevant market both in terms of the nature of the product or service being offered and the geographic sales area of such product or service.  The Taiwan Guidelines separately list the factors used to assess (i) product or service scope and (ii) the appropriate geographic sales area.  However, these factors are largely the same and are each aimed at providing information as to the substitutability of a product or service within a geographic area.  According to the Taiwan Guidelines when establishing the appropriate relevant market, the FTC will typically consider a variety of factors, including:

  1. the general nature of the product or service and its use;
  2. views of customers and competitors regarding substitutability of the product or service generally and specifically within a particular geographic area;
  3. historical data on past substitution of similar products or services;
  4. the cross-price elasticity of demand;
  5. effects of price variation generally, the effect of price changes in different regions and related transportation costs between such regions, and the diversion of orders to other geographic areas in response to price changes; and
  6. costs to customers associated with switching to different products, including ease with which customers can obtain products from different regions and transaction costs for customers purchasing products from different regions.

When assessing the considerations listed above, the FTC employs familiar qualitative and qualitative analysis methodologies including (i) reasonable interchangeability of use; (ii) the hypothetical monopolist test (and the related concept of a small but significant non-transitory increase in price); and (iii) cross elasticity of demand measurements.  It is important to note, however, that the FTC emphasizes that it may use other tests depending on the particular circumstances of each case.

In most cases, we recommend that the best practical approach to determining the relevant market in Taiwan for any particular product or service is to begin by analyzing the relevant market as if preparing for an antitrust inquiry in the United States or the European Union.  However, each case is unique and we strongly recommend anyone contemplating a business combination that may impact the Taiwan market to contact us to get more specific advice as to how the relevant market should be defined for the purposes of (i) determining whether a Taiwan merger control filing is required and (ii) making any such filings, if required.

To read the third installment on procedural issues related to merger filings, click here. For more information on mergers and acquisitions in Taiwan, please contact Gregory A. Buxton at

[1] 公平交易委員會對於相關市場界定之處理原則.   No English translation available.

Exenciones a los requisitos para el permiso de trabajo en Taiwán: El Mecanismo de Consulta

This is a Spanish translation of our English article “Exemptions to Taiwan’s work permit requirements: the Consultation Mechanism”, which you can find here.
Esta es la traducción al español de nuestro artículo en inglés “Exemptions to Taiwan’s work permit requirements: the Consultation Mechanism”, el cuál se encuentra disponible aquí.

Los requisitos para la obtención del permiso de trabajo en Taiwán pueden ser un tanto inflexibles, sin embargo, existen algunas exenciones disponibles para dos de los cuatro requisitos: ingresos/capitalización mínima del empleador y experiencia laboral mínima del empleado (adquirida después de la culminación de los estudios universitarios).

Los Requisitos Básicos

La mayoría de los profesionales extranjeros en Taiwán, fuera de los que trabajan como profesores, corresponden a la Clase A (profesionales o técnicos).

Para contratar a empleados extranjeros bajo la Clase A, el posible empleador del candidato extranjero debe aplicar a un permiso de trabajo ante la Agencia de Desarrollo del Empleo (“WDA” por sus siglas en inglés) bajo la tuición del Ministerio de Trabajo.

En general, cuatro requisitos básicos deben ser cumplidos:

  1. ingresos /capitalización del empleador;
  2. nivel académico/experiencia laboral del empleado;
  3. trabajo profesional o técnico; y
  4. salario mensual mínimo de NT$47,971

Existen exenciones tanto para el requisito de ingresos/capitalización del empleador como para el de educación/experiencia del empleado. Estas exenciones no son disponibles para trabajos que no formen parte del alcance del trabajo profesional o técnico. Tampoco existen exenciones al salario mensual mínimo de NT$47,791 para profesionales extranjeros que posean títulos de universidades extranjeras (no taiwanesas).

Requisito de ingresos/capitalización

Para contratar a un profesional extranjero en la Clase A, el empleador debe ser una empresa nueva con un capital registrado de NT$ 5 millones o una empresa existente con ingresos (del último año fiscal) de NT$ 10 millones (o ingresos promedios de NT$ 10 millones durante los últimos tres años).

Requisito de nivel académico y experiencia laboral

En general, para ser contratado, un empleado extranjero debe tener un diploma universitario y dos años de experiencia laboral relacionada al trabajo por el cual se lo pretende contratar. La experiencia laboral debe ser aquella adquirida después de la culminación de los estudios universitarios.


Las exenciones disponibles corresponden a lo que el Ministerio de Trabajo denomina el “Mecanismo de Consulta” .

Si un empleador no llega a cumplir con el requisito de ingresos/capitalización mínima, el empleador debe adjuntar este formulario (en chino) a la aplicación de permiso de trabajo del empleado.

Si el candidato no llega a tener los dos años de experiencia laboral relacionada al trabajo que se lo pretende contratar, el empleador debe adjuntar este formulario (en chino) a la aplicación de permiso de trabajo del empleado.

Favor tomar en cuenta que los candidatos extranjeros por lo general no pueden aplicar a permisos de trabajo o a las exenciones por su cuenta. El empleador es el que debe aplicar por el permiso para contratar al candidato.

Alta tasa de aprobación

Las exenciones bajo el Mecanismo de Consulta han estado disponibles desde el 2010. Estadísticas parciales del WDA muestran que las exenciones son otorgadas a la mayoría de las aplicaciones. Desde el 2010 al 2015, 176 empleadores aplicaron a la exención del requisito de ingreso/capitalización mínima. De éstas, 156 (89%) han sido aprobadas. De forma similar, durante el mismo periodo, 50 empleadores aplicaron a la exención del requisito de experiencia laboral mínima de dos años. De éstas, 47 fueron aprobadas, alcanzando así una tasa de aprobación del 94%.

Pese a que las tasas de aprobación son altas, el número de aplicaciones es sorprendentemente bajo. Esto puede deberse a que hasta hace algún tiempo el WDA no tenía una guía clara sobre el Mecanismo de Consulta ni en inglés ni en chino.

EZ WORK Taiwán: Información sobre el Mecanismo de Consulta y Permisos de Trabajo en general

Como mencionamos anteriormente, el WDA no tenía un mecanismo directo y eficaz para transmitir información. Sin embargo, a finales de 2016, el WDA añadió una nueva sección a su página web EZWORK Taiwán, la cual proporciona información completa sobre el Mecanismo de Consulta en chino e inglés. Candidatos profesionales extranjeros pueden familiarizarse con el Mecanismo de Consulta en inglés aquí. Dado que es muy probable que el departamento de recursos humanos de las empresas taiwanesas no tenga familiaridad con el Mecanismo de Consulta, los candidatos pueden remitir a sus posibles empleadores a la misma información en chino aquí.

De forma general, la página EZ WORK Taiwán proporciona información completa en inglés y chino para la obtención de permisos de trabajo para trabajos profesionales y técnicos de la Clase A y también para otras clases de permisos de trabajo profesional incluyendo aquéllos para profesores, artistas e intérpretes. Reiteramos que remitir a los posibles empleadores a la versión en chino de la página puede ser de mucha ayuda especialmente si es la primera vez que la empresa contrata a un empleado extranjero.

Reglas especiales para graduados de universidades taiwanesas y empleados de algunas empresas emergentes (startups)

Cabe mencionar que existen reglas especiales para graduados extranjeros de universidades taiwanesas y empleados de algunas startups que cumplen ciertos requisitos (“startups calificadas”). Estas reglas especiales se encuentran fuera del alcance de este artículo pero más información sobre el Sistema de Puntaje para graduados extranjeros de universidades taiwanesas se la puede encontrar aquí. Empleados de startups calificadas no están sujetos al requisito de experiencia de trabajo mínima de dos años.

Data protection enforcement decisions by Taiwan’s Financial Supervisory Commission

Taiwan has had data protection laws since the mid-1990s, but a new era in data protection began in October of 2012 when the Personal Information Protection Act of 2010 (the “PIPA”) took force.

Enforcement of the PIPA is dispersed. Instead of having a single data protection authority (DPA), central government regulators share responsibility for enforcing the PIPA along with local governments. In addition, the Ministry of Justice plays an important coordinating role and interprets the PIPA.

The only regulator that publishes its data protection enforcement decisions is the Financial Supervisory Commission (“FSC”). The FSC is Taiwan’s super-regulator for financial industries. In this role, it oversees securities and futures firms, banks, and insurers. FSC data protection enforcement decisions are thus an important source for understanding enforcement of the PIPA by Taiwan’s executive branch.

Enforcement Cases by the Numbers

The FSC has published 16 enforcement decisions since the PIPA took force in 2012. The number of enforcement decisions in each year has varied. For example, while seven decisions were issued in 2016, no decisions were issued in 2015. Between 2012 and 2014, the FSC issued an average of two or three FSC enforcement decisions each year.

The seven 2016 enforcement decisions included five enforcement decisions against insurance companies by the FSC Insurance Bureau and two decisions against banks by the FSC Banking Bureau. As of this writing (March 2017), the FSC has already issued two enforcement decisions. Both of the 2017 decisions have been against insurers.

Of the various FSC sub-agencies, the Insurance Bureau has been the most active in its PIPA enforcement. Eleven of the 16 FSC enforcement decisions since 2012 have been insurance cases while just five decisions have been banking cases. Thus two trends can be identified. The first is increasing overall enforcement activity by the FSC since 2016. The second is that the FSC is especially concerned about the collection, processing, and use of personal information by the insurance industry.

We anticipate that these trends will continue and expect to see an increasing number of PIPA enforcement cases issued by the FSC with a focus on the insurance industry.

Types of Enforcement Decisions

FSC Enforcement decisions since 2012 can be categorized into four types: data breach cases, failure to obtain consent cases, inadequate security cases, and cases involving failure to notify.

1. Data Breaches

Data breaches are the most common reason for enforcement decisions. In general, these cases have involved negligent disclosures of customer personal information. In some cases, the disclosures were caused by poorly designed or maintained internal control and internal audit mechanisms while in other cases there were procedural errors in the course of business. Examples of data breaches cases are briefly discussed below in reverse chronological order by the date of the enforcement decision.

10 January 2017: Nan Shan Life Insurance Co., Ltd. improperly mailed policyholder personal information to third parties in the course of mailing notices to policyholders. The FSC found that the personal information disclosures were caused by execution errors in Nan Shan’s computer system. This enforcement decision is notable because the FSC also found that the breach was material and penalized Nan Shan for failing to immediately report the breach. This is the only enforcement decision to date in Taiwan that addresses late reporting.

11 April 2016: A customer requested information about salary transfers to the customer’s account at Cathay United Bank. In its response to the customer’s request, Cathay United Bank’s Da’an Branch disclosed the personal information of another customer to the requesting customer.

22 August 2013: CTBC Bank committed an error in its internet banking operations that enabled any internet user to enter, browse, and obtain customer information stored in the bank’s internal index pages.

2. Failure to obtain consent

Enforcement decisions have also been made against financial enterprises who have violated the PIPA by providing personal information of customers for use by third parties without first obtaining the customers’ consent. This type of case is illustrated by the following enforcement decisions.

29 June 2016: Mega International Commercial Bank, without having obtained the consent of its customers, provided basic customer personal information to its affiliate Chung Kuo Insurance Company Limited to conduct telemarketing.

4 October 2013: A Nan Shan Life Insurance solicitor, without obtaining written permission from the policyholders, gave personal information of customers to a third party whom the solicitor had engaged to answer policyholders’ questions about a policy.

10 July 2013: A Chang Hwa Commercial Bank, Ltd. employee made a query to the Joint Credit Information Center about a customer’s credit information without having obtained the customer’s written consent.

3. Inadequate Security

Cases of this type include the following:

16 November 2016: PCA Life Assurance Co., Ltd. inadequately implemented its 2015 personal information inventory operations, resulting in failure to delete personal information before the expiration of the relevant retention period.

11 November 2016: Mercuries Life Insurance Co., Ltd. was penalized for having inadequate overall personal data protection measures and a lack of effective internal control mechanisms in conducting its information operations.

8 September 2016: A Fubon Life Insurance Co., Ltd. customer complaint handler failed to adopt appropriate security measures and failed to use encryption when sending photocopies of policyholder call-in card applications to personal email addresses.

4. Failure to notify

14 February 2017: Mercuries Life Insurance Co., Ltd. was penalized for failing to expressly inform data subjects of statutorily required matters when it collected personal information of customers through its official website on a web page it provided for customer email queries about insurance.


Under the PIPA, regulators are empowered to order private sector actors to remedy a violation of the PIPA. Failure to remedy the violation by a prescribed deadline will result in an administrative fine ranging from NT$20,000 (c. US$650) to NT$500,000 (c. US$16,300). However the FSC also has the power to fine financial businesses when they violate rules governing internal controls, and these fines are considerably higher than the fines that may be imposed under the PIPA. A notable feature of the FSC enforcement decisions is that when the FSC determines that a financial institution has violated the PIPA, it usually also finds that the same facts simultaneously constitute a violation of internal controls. As a result, the fines imposed in most FSC enforcement decisions are generally the higher fines for violation of internal controls.

In less serious cases, the administrative fine for a violation of internal controls in a data protection case is NT$600,000 (c. US$19,570). However higher fines are imposed in more serious cases. For example the FSC imposed a fine of NT$1.2 million (c. US$39,100) in the 2016 PCA Life Assurance case where PCA Life Assurance failed to delete personal information by the expiration of the retention period. Relatively high fines were also imposed in two cases involving external leaks of personal information: NT$3 million (c. US$97,830) in a 2014 case in which an ex-employee of Cathay United Bank had downloaded personal information of customers onto a private external storage device, and NT$4 million (c. US$130,400) in the 2013 CTBC Bank data breach case.

Typically, these fines for violations of internal controls are also accompanied with an order to remedy the PIPA violation by a prescribed deadline. In the majority of cases, a deadline of one month was set to remedy the PIPA violation. In a minority of more serious cases, a deadline ranging from seven to ten days was set.

To date, the FSC has imposed stand-alone PIPA fines in just three cases: the 2016 Mega International Commercial Bank decision, the 2013 Nan Shan Life Insurance decision, and the 2013 Chang Hwa Commercial Bank decision. The administrative fines imposed by these decisions were respectively: NT$50,000 (c.US$1,630), NT$20,000 (c. US$650), and NT$50,000 (c. US$1,630). All three of these cases fall in the category of providing a customer’s personal information for use by a third party without having obtained consent.


Taiwan’s Financial Supervisory Commission is actively enforcing violations of the PIPA with remedy orders and fines. While fines remain low by international standards, Taiwan’s media covers violations of data protection law extensively. As a result, members of the public and consumers are increasingly aware of their rights under the PIPA and are already highly sensitive to disclosures of personal information. This will put pressure on other regulators to follow the FSC’s lead and publish enforcement decisions. Ultimately Taiwan is likely to follow regional and international trends and replace dispersed enforcement with centralized enforcement by a unitary data protection authority.

For more information on data protection and privacy matters in Taiwan, please contact Chen Hui-ling at

Merger control FAQ (part 1 – the basics)

We receive regular inquiries from foreign clients as to whether a particular transaction requires making a merger control filing in Taiwan. The following is the first installment of a multi-part series in which we explore commonly asked questions related to merger control in Taiwan. This first installment covers basic questions related to the scope and coverage of Taiwan’s merger control regulations.

1. Does Taiwan have merger control regulations?

Yes. Taiwan’s Fair Trade Act (the “FTA”) includes merger control provisions. The FTA empowers Taiwan’s Fair Trade Commission (the “FTC”) to prohibit transactions it determines would have a net-negative market impact, after weighing the transaction’s anti-competitive or other adverse effects on the Taiwan market against any countervailing economic benefits.

2. Does Taiwan have pre-merger reporting requirements?

Yes. The FTA requires pre-merger notification if a regulated transaction meets certain market impact thresholds.

3. Do global transactions require filing in Taiwan?

Yes, provided that the transaction: (i) falls within one or more of the categories of regulated transactions and (ii) meets certain market impact thresholds, as set forth in the FTA.

4. What types of transactions are covered by the FTA?

The FTA applies to typical merger and acquisition transactions such as statutory mergers and share or asset purchases. Share and asset purchases for less than the entirety of a target business may be deemed regulated transactions under the FTA.  With respect to share purchases, any transaction resulting in the acquirer holding one-third or more of the voting shares of the target would be covered by the FTA.  Likewise, an asset purchase of a principal or major portion of the assets of a target would fall within the scope of the FTA. The FTA’s regulatory purview also extends to other business combinations including joint ventures and various other arrangements whereby one entity has de facto or contractual control over the operations of another.

5. What are the relevant market impact thresholds?

The FTA requires filing if any one of the following conditions exists with respect to a regulated transaction:

  • upon consummation of the proposed transaction, the combined entity would control one-third of the relevant market in Taiwan;
  • prior to the consummation of the proposed transaction, one of the participants in the transaction controls one-fourth of the relevant market in Taiwan;
  • during the immediately preceding fiscal year, (A) one of the transaction participants had sales revenue in Taiwan exceeding NT$15 billion (~US$465.5 million) and (B) the other participant had sales revenue in Taiwan exceeding NT$2 billion (~US$62.1 million)[1]; or
  • during the immediately preceding fiscal year, (A) one of the transaction participants had global sales revenue exceeding NT$40 billion (~US$1.32 billion) and (B) two participants each had sales revenue in Taiwan exceeding NT$2 billion (~US$62.1 million).

6. Are there any exemptions to the FTA filing requirements?

Yes. Common restructuring transactions are exempted from the FTA filing requirements.  Such transactions include:

  • the merger of (i) a parent enterprise (the “Parent”) with (ii) another enterprise, 50% or more of the voting interests of which is held either directly by the Parent or indirectly by a wholly-owned direct subsidiary of the Parent;

  • the merger of enterprises 50% or more of the voting interests of which are held directly or indirectly (not illustrated below) by the same Parent;

  • a transfer by a Parent of (i) all or a principal part of its business or assets or (ii) all or any part of its business that could be operated separately, to another newly established enterprise wholly-owned by the Parent; and the redemption of shares from certain shareholders by an enterprise (pursuant to certain provisions in the Company Law or the Securities and Exchange Law) resulting in any remaining shareholder(s) holding more than one-third of the outstanding shares of the enterprise.

You can read the second article in this series on relevant market here, the third article on procedural issues here, and the fourth article on process insights here. For more information on mergers and acquisitions in Taiwan, please contact Gregory A. Buxton at

[1] Note that different sales revenue thresholds apply to financial holding companies.

Diez consejos en cuanto a relaciones laborales en Taiwán

This is a Spanish translation of our English article “Ten tips for Taiwan employment contracts”, which you can find here.
Esta es la traducción al español de nuestro artículo en inglés “Ten tips for Taiwan employment contracts”, el cuál se encuentra disponible aquí.

El ámbito laboral se ha convertido en un tema de suma importancia en Taiwán dado que el número de demandas laborales iniciadas por empleados ha incrementado significativamente en años recientes. En este artículo presentamos una lista de diez consejos a tener en cuenta toda vez que un empleador se encuentre negociando o elaborando un contrato de trabajo en Taiwán. Pese a no proporcionar una lista exhaustiva, este artículo contiene información vital para los contratos de trabajo a ser implementados en Taiwán para evitar los problemas que vemos de forma regular en nuestra práctica laboral.

1. Uso de un contrato de trabajo escrito

Taiwán no tiene leyes o regulaciones que específicamente regulen los contratos de trabajo y por tanto, los empleadores gozan de cierta flexibilidad con respecto al formato de sus contratos de trabajo. Pese a que no existe una ley explícita que requiera contratos laborales escritos, para asegurar claridad y evitar potenciales disputas con los empleados en el futuro, es recomendable que los empleadores usen contratos laborales escritos en Taiwán.

2. Uso de un manual del empleado / reglas de trabajo

Empleadores que contraten 30 o más empleados deben tener un manual del empleado o reglas de trabajo. Aunque no se llegue al límite de 30 empleados, muchas empresas eligen tener de forma separada, un manual del empleado o reglas de trabajo que también formen parte del contrato laboral. Tener un documento separado (pero vinculante) que detalle elementos de la relación laboral como los derechos de propiedad intelectual, disciplina y convenios restrictivos, otorga a los empleadores mayor seguridad respecto a los derechos y obligaciones mutuas emergentes del contrato de trabajo.

3. Establecer claramente el término del contrato

Los contratos laborales en Taiwán son de término indefinido a menos que se especifique un término fijo. Los empleados empiezan a gozar de todos los derechos laborales otorgados bajo ley en cuanto comienza la relación laboral. Mientras que los periodos de prueba pueden existir en los contratos laborales, éstos son de uso limitado en Taiwán. Esto se debe a que la terminación de la relación laboral en Taiwán no puede ser a mera voluntad del empleador, sino que dicha terminación debe cumplir siempre con los requisitos especificados bajo la Ley de Normas Laborales (“LSA” por sus siglas en inglés).

4. Protección a la propiedad intelectual

Entre las buenas prácticas en contratos laborales está la clara definición de los derechos de propiedad y creación en relación a toda propiedad intelectual ya existente y futura que se encuentre dentro del alcance de las funciones del empleado. La protección puede ser reforzada haciendo referencia en el contrato laboral al manual del empleado o cualquier otro acuerdo escrito que detalle con especificidad los derechos de propiedad intelectual relevantes.

5. Definir claros convenios restrictivos

De forma similar a los derechos de propiedad intelectual, describir claramente los derechos y obligaciones de los empleados durante y después de terminada la relación laboral con respecto a secretos comerciales, información confidencial, y restricciones a la competencia y solicitación, es un aspecto crucial en cualquier contrato de trabajo en Taiwán. El alcance de los convenios restrictivos con respecto a la no competencia y solicitación deben ser razonables. Por ejemplo, el término de duración de la prohibición a la competencia no puede ser más de dos años, el empleador debe tener un interés legítimo a proteger, las funciones laborales y la posición del empleado que se retira deben ser suficientes para otorgarle acceso al interés legítimo que el empleador pretende proteger, y el empleado debe recibir compensación razonable por cualquier pérdida ocasionada por aceptar el convenio de prohibición a la competencia. Si la cláusula no se ajusta a los principios antes mencionados, es muy probable que las cortes de Taiwán no la consideren válida y ejecutable.

6. Cumplir con leyes relacionadas a la transferencia / despido de empleados

Todo empleado despedido a raíz de un proceso de restructuración o cambio de propietarios de la empresa tiene derecho a indemnización y preaviso bajo la ley. La LSA especifica las circunstancias en las que un empleado puede ser despedido legalmente en Taiwán con preaviso e indemnización, como en el caso de transferencia de propiedad o suspensión de actividades de la empresa. Existen muy pocas circunstancias en las que un empleador puede despedir a un empleado sin preaviso o indemnización. Ejemplos de estas limitadas circunstancias son el grave incumplimiento del contrato laboral o la divulgación de secretos comerciales de la empresa por parte del empleado.

7. Elegir el idioma correcto

Las cortes de Taiwán reconocen los contratos de trabajo redactados en chino o inglés. En el caso de existir un contrato laboral en ambos idiomas, es recomendable especificar en el contrato, cual versión rige en caso de un conflicto entre ambas versiones. Es bueno tomar en cuenta, que muchas veces las cortes en Taiwán deciden que la versión que rige es la del idioma chino.

8. Definir jurisdicción y mecanismos de resolución de disputas

La vía de mediación es disponible a los empleados ya que cada gobierno local en Taiwán tiene una oficina que ofrece mediación y apoyo legal sin costo a empleados que tengan disputas con sus empleadores. Las cortes de Taiwán tienen divisiones especializadas en manejar casos relaciones a temas laborales. Es común que los contratos laborales, particularmente aquellos que implican a entidades o empleados extranjeros, contengan una cláusula que indica que la ley aplicable en caso de disputa es la de la República de China (Taiwán) y que las partes deben  usar sus mejores esfuerzos para llegar a un acuerdo mutuo mediante consultación o mediación antes de iniciar un litigio.

9. Especificar beneficios requeridos por ley

Las leyes de Taiwán establecen que los empleadores que tengan una entidad legal constituida en Taiwán deben aportar al Seguro Nacional de Salud y al Seguro Laboral de cada empleado. Estos y otros beneficios, los cuales deben ser pagados por el empleador, no pueden ser alterados por parte del empleador de forma desfavorable en el contrato laboral.

10. Evitar cambios a las condiciones laborales

Existen restricciones impuestas a empleadores que pretendan cambiar las condiciones laborales del empleado (como el lugar de trabajo) en un contrato de trabajo. Por ejemplo, muchas empresas transnacionales desean poder decidir el lugar de trabajo de sus empleados arbitrariamente; sin embargo, nuevas modificaciones a la LSA establecen que los empleadores que pretendan hacerlo deben cumplir con algunos principios generales o sino estarían incumpliendo el contrato laboral y la LSA. Los principios generales incluyen: (a) el cambio debe ser por las necesidades de la empresa y por un propósito justificable; (b) no pueden hacerse cambios desfavorables en cuanto a salario u otras condiciones de trabajo; (c) los cambios deben ser adecuados a las habilidades especificas del empleado; (d) los empleadores deben proporcionar asistencia a los empleados si el lugar de trabajo es inconveniente; y (e) los empleadores también deben poner en consideración los intereses de los familiares del empleado.

Tomando en cuenta los diez consejos arriba mencionados al redactar sus contratos de trabajo puede ayudar a evitar potenciales disputas laborales de forma preventiva. Para más información sobre temas laborales en Taiwán, favor contáctese con Christine Chen o +886 (0) 223112345 externo 307.

Personal information concerns when conducting due diligence

Transactional attorneys are intimately familiar with due diligence requests (“DDR”). A prospective buyer (“Buyer”) will typically deliver to a target company (“Target”) a DDR which includes a section requesting information related to a Target’s employees and the circumstances of their employment. In Taiwan, we advise Buyers to take steps to ensure they do not inadvertently collect such employees’ personal information, thus violating Taiwan’s Personal Information Protection Act (“PIPA”).[1]

PIPA permits personal information to be collected and processed only in situations where there exists: (i) a specified purpose for such collection and processing; and (ii) one or more of six qualifying conditions.


Although the specified purpose must be reasonable, the data collector or processor is largely left free to determine the purpose for collecting or processing any personal information. There is no indication that due diligence associated with an acquisition transaction would not be considered a reasonable purpose for the collection or processing of personal information under PIPA.

Qualifying Conditions

Unlike the purpose requirement, the list of qualifying conditions is strictly limited to the specific conditions delineated in the statute. In the context of an acquisition transaction, the relevant qualifying conditions would likely be one or more of the following:

  1. a contractual or contract-like relationship between data processor or collector and the data subject; or
  2. the data subject’s consent.

Contract or contract-like relationship

In an acquisition context, a Buyer, as data collector, is not in direct privity of contract with Target’s employees; therefore, no direct contractual relationship exists between the data collector and the data subject. However, PIPA and related regulations allow for a less formal contract-like relationship to suffice as a qualifying condition for personal data collection. Such relationships are typically found to exist in pre-contract negotiations or contract formation processes. For example, a contract-like relationship would exist between an employer and a potential employee during the hiring process, prior to any contract actually being signed. Given that Buyers normally do not negotiate with a Target’s employees during the pre-signing phase of a transaction, it is extremely doubtful that any contract-like relationship would be found to exist which would justify the collection of Target employees’ personal information.

We note that this reading of the PIPA creates a slight tension with Taiwan’s Business Merger and Acquisition Act (“BMAA”) pursuant to which a Buyer may negotiate with a Target to determine which of Target’s employees will be retained post-closing. However, the intention of the BMAA to allow such negotiations is not a basis to find that a Buyer has a contract-like relationship with a Target’s employees sufficient to justify collection of their personal information.


If there is neither a contractual nor contract-like relationship between the Buyer and Target’s employees, the only remaining qualifying condition that would allow for the collection of the employees’ personal information would be receipt of consent from the employees themselves. In the vast majority of cases, this is both impractical and undesirable as Buyers normally wish to keep transactions as confidential as possible.

Personal information

Absent a clear cut path to the legal collection of Target employees’ personal information, we encourage prospective Buyers to take steps to ensure that no personal information is collected from Taiwan data subjects.

In Taiwan, personal information is defined as any information that can directly or indirectly identify a natural person. Buyers should, therefore, request any Target to redact employees’ names, national identification numbers, addresses, and any other information that could identify an employee from all employment agreements before disclosing such agreements. Similarly, payroll information can be disclosed only if employees’ names and other identifying information are redacted.

We recommend that any DDR sent by a Buyer to a Taiwan Target clearly request that any and all employee information to be provided pursuant to such a DDR must not contain employees’ personal information. For more information on data protection and privacy matters in Taiwan, please contact Chen Hui-ling at and Daniel Chen at

[1] It is important to note that a Buyer’s liability extends to the acts of its agents and professional advisors. So, a Buyer would remain liable even if a DDR were sent out on its behalf by its lawyers or other professional advisors.

Regulations amended to strengthen border control measures protecting trademarks

The Taiwan Customs Administration, Ministry of Finance, amended the Regulations Governing Customs Measures in Protecting Rights and Interests in Trademarks (“the Regulations”) on 30 December 2016. The amendment is aimed at providing more complete protection for the rights of trademark holders and strengthening border control measures by Taiwan Customs against trademark-infringing goods. It also is designed to harmonize with Taiwan’s policies of promoting e-government and streamlining administrative procedures. The amended Regulations entered into full force from 1 January 2017.

Below are some key points of the amendment:

1. The amended Regulations provide for protection on a per-registration rather than per-design basis

Among the protective measures under the Regulations are a mechanism for trademark rights holders to apply, by a notice to Customs, for protection of registered trademarks (“protection-upon-notice”), and a mechanism for rights holders to file complaints with Customs about specific goods suspected of infringing trademark. In the past, applications for protection-upon-notice of registered trademarks were required to be submitted on a per-design basis, with the result that multiple registrations of a single trademark design would be bundled into a single protection-upon-notice case. But as different registrations may have different protection periods and scopes of protection, a need to differentiate between registrations was recognized. The amended Regulations, in Article 3.1, therefore expressly require trademark rights holders seeking protection to apply on a per-registration rather than per-design basis and to separately record with Customs the information for each trademark registration number.

2. The protection-upon-notice period is lengthened, and renewal procedures are simplified

Before the amendment, Customs would grant approval for protection-upon-notice for a one-year term only, and trademark rights holders were required to apply for renewal annually. To simplify matters, Article 4.1 of the amended Regulations revises the protection-upon-notice period to “from the date of approval by Customs to the expiration of the trademark rights term”, eliminating the need for annual renewal applications. A trademark rights owner who applies for and obtains renewal of an expiring trademark now needs merely to present Customs with documentary proof of the renewed trademark term to update the information on record with Customs and renew the protection of the registration.

3. The amendment specifies the obligation of the trademark rights holder or agent to cooperate with Customs, and allows Customs to terminate the protection period if unable to contact the rights holder or if an offshore rights holder no longer has a Taiwan agent

To strengthen the obligation of trademark rights holders or their agents to cooperate in trademark protection, the amendment newly provides, in Article 5, that Customs may terminate the protection-upon-notice period early in either of the following circumstances: (1) Customs is unable to contact the trademark rights holder or the rights holder’s agent using the information submitted in the application for protection-upon-notice; (2) a trademark rights holder without a domicile or place of business or no longer has an agent in Taiwan because its relationship with its agent has been terminated or is extinguished by some other cause.

4.   When a trademark rights holder files a complaint against specific import or export goods suspected of infringement, Customs is now required to notify the trademark rights holder of the acceptance of the complaint or the reasons for non-acceptance of the complaint.

When a trademark rights holder takes the initiative to file a complaint against import or export goods suspected to infringe the holder’s trademark rights, under Article 6.2 of the amended Regulations, Customs is required to notify the trademark rights holder of whether the complaint is accepted, and when Customs declines to accept a complaint, it is further required to specify the reasons for non-acceptance.

5.   The amendment permits Customs, upon application, to provide photographs of suspected infringing items to trademark rights holders to help them assess whether products are genuine or counterfeit, to expedite handling procedures

To help trademark rights holders judge more quickly whether to proceed to Customs to assess suspected infringing goods, Article 7.5 of the amended Regulations permits Customs, upon application, to provide photographs of suspected infringing items to trademark rights holders. Rights holders may not, however, base their determination of whether there is infringement simply on photographs of import or export goods provided by Customs.

6. A trademark rights holder who lacks a domicile or a place of business in Taiwan is required to designate an agent to act on the rights holders’ behalf in exercising the trademark protections under the Regulations

In principle, a trademark rights holder may choose at its own discretion whether to designate an agent to act on its behalf to exercise the protections under the Regulations. The exception is a trademark rights holder who has neither a domicile nor a place of business in Taiwan. Under the amended Regulations, such a rights holder is required to appoint an agent to liaise with and carry out infringement assessments at Customs, and receive service of documents or notices from Customs.

7. The amendment newly provides that a recorded exclusive licensee has standing equivalent to a trademark rights holder

The amended Regulations provide, in Article 15, that a recorded exclusive licensee is entitled to enjoy, in the licensee’s own name, the border control measures implemented by Customs for trademark protection under the Regulations, and is further entitled to exclude applications by third parties for those protective measures. This amendment brings the Regulations into harmony with the provisions of the Trademark Act concerning exclusive licensees.

In addition to lengthening the period of protection in cases of protection-upon-notice, the amended Regulations offer greater convenience to trademark rights holders by allowing them to use electronic means to apply for protection-upon-notice and to query information related to their applications. Rights holders nevertheless should remain mindful, as the expiration of a trademark term approaches, to present Customs with documentary proof of trademark term renewal, in order to renew the term of the protection and ensure that their trademark rights remain safeguarded. Foreign holders of Taiwan trademark rights who do not have a domicile or place of business in Taiwan should also pay special attention to the new provisions regarding the compulsory use of an agent when such rights holders apply for protections under the Regulations.

For more information on trademark and IP protection and enforcement matters in Taiwan, please contact Gary Kuo at

This is a translation by Paul Cox, of the original Chinese article found here.

Exemptions to Taiwan’s work permit requirements: the Consultation Mechanism

Taiwan’s work permit requirements may appear to be inflexible but little-known exemptions are readily available for two requirements: minimum employer capitalization/revenue and minimum post-graduate work experience.

The Basic Requirements

Most foreign professionals in Taiwan other than teachers are employed in Class A professional and technical work.

To hire a foreign professional for Class A work, the foreign job candidate’s prospective employer must apply for a work permit from the Ministry of Labor’s Workforce Development Agency (the “WDA”).

In general, four basic requirements must be met:

  1. the capitalization/revenue requirement for the employer
  2. education/experience requirements for the employee
  3. the job must be a professional or technical job, and
  4. a minimum monthly salary of NT $47,971

Exemptions are available for the capitalization/revenue requirement and the work experience requirement. No exemptions are available for jobs that do not fall within the scope of professional and technical work. There are also no exemptions to the minimum monthly salary of NT$47,791 for foreign professionals who hold a non-Taiwan degree.

Capitalization/revenue requirement

To hire a Class A foreign professional, the employer must be a new business with NT$5 million in registered capital or an existing business with NT$10 million in revenue in the preceding year (or average NT$10 million revenue over the past three years).

Education and Experience Requirement

To be hired, a foreign professional must generally have a college degree and two years of related post-graduate work experience.


Exemptions are available through what the Ministry of Labor calls the “Consultation Mechanism.”[1]

If an employer does not meet the capital/revenue requirement, the employer should attach this form (in Chinese) to the work permit application.

If the job candidate does not have two years of post-college work experience relevant to the job, the employer should attach this form (in Chinese) to the work permit application.

Please note that foreign job candidates generally cannot apply for work permits or exemptions on their own. Their employer must apply for permission to hire the job candidate.

High Approval Rates

Exemptions under the Consultation Mechanism have been available since 2010. Partial statistics from the WDA show that exemptions are granted in response to most applications. Between 2010 and 2015, 176 employers applied for exemptions to minimum capital/revenue requirements. 156 (89%) of these applications were approved. Similarly, 50 employers applied for exemptions to the two year work experience requirement during the same period. 47 of the applications were approved, yielding a 94% approval rate.

While approval rates are high, the number of applications is strikingly low. This is probably explained by the fact that until recently the WDA did not have clear guidance on the Consultation Mechanism either in English or Chinese.

EZ WORK Taiwan: Information on Consultation Mechanism and Work Permits in General

In late 2016 however, the WDA added a new section to its excellent EZ WORK Taiwan website that gives comprehensive information about the Consultation Mechanism in both Chinese and English. Foreign professional job candidates can familiarize themselves with the Consultation Mechanism in English here. Since HR departments at Taiwanese companies are unlikely to be familiar with the Consultation Mechanism, job candidates can refer prospective employers to the same information in Chinese here.

More generally, the EZ WORK Taiwan website provides comprehensive information in both English and Chinese for Class A professional and technical work permits as well as bilingual information about other types of professional work permits including those for teachers, artists, and performers. Again, referring prospective employers to the Chinese side of the site can be very useful especially if you are the first foreign hire at a given company.

Special Rules for Graduates of Taiwanese Universities and Qualified Startups

It should be noted that special rules apply to foreign graduates of Taiwanese universities and to employees at qualified startups. These special rules are outside the scope of this article but more information about the Points System for foreign graduates of Taiwanese universities can be found here. Employees of qualified startups are not subject to the two year experience requirement.

[1] 會商機制 (huishang jizhi)

Amendments to Labor Standards Act passed

After lengthy discussion and public debate, amendments to the Labor Standards Act (“LSA”) were passed after its third reading on 6 December 2016. The main changes that employment law practitioners, human resource managers, employers and employees must be aware of include:

Changes to annual leave

The qualifying threshold for taking paid annual leave has been reduced from one year of service to six months of service. Employees earn additional annual leave based on years of service up to a maximum of 30 days per year. Minimum annual leave allowances as of 1 January 2017, when the new rules go into effect, are:

  • More than six months but less than one year; 3 days
  • More than one year but less than two years; 7 days
  • More than two years but less than three years; 10 days
  • More than three years but less than five years; 14 days
  • More than five years but less than ten years; 15 days and
  • Over ten years; one extra day of annual leave per year up to a maximum of 30 days.

Unused annual paid leave days must be cashed out by the end of each year of service. Failure to do so may lead to an administrative fine of between NT$20,000 and NT$1 million (approximately US$630 and US$31,500).

Elimination of national holidays

Seven national holidays have been eliminated for private sector workers. This is to make up the difference in time away from work when Taiwan switched from a 48 hour workweek to a 40 hour workweek earlier this year. When remaining national holidays occur on rest days (usually a weekend), employers must provide another day off for employees. The national holidays which have been eliminated include:

  • The day after the Founding Day of the Republic of China (January 2);
  • Revolutionary Martyrs’ Day (March 29);
  • Confucius’ Birthday (September 28);
  • President Chiang Kai-shek’s Birthday (October 31);
  • Taiwan’s Retrocession Day (October 25);
  • Dr. Sun Yat-sen’s Birthday (November 12) and
  • Constitution Day (December 25).

Implementation of a five-day work, two-day rest week

The changes provide for two rest days in seven, an increase from one rest day in seven. This brings the rest of the private sector into line with the public sector and most office-based industries. Of the two rest days, one is a mandatory day off; the other is flexible. An employee cannot agree to work on the mandatory rest day. The employee may agree to work on the flexible rest day but higher overtime rates will apply.

Overtime on flexible rest days

Employees and employers need to be aware of the new overtime calculations for flexible rest days:

  • Between 0 and 2 hours; 1.34 times regular hourly wage
  • Between 3 and 8 hours; 1.67 times regular hourly wage
  • Between 9 and 12 hours; 2.67 times regular hourly wage

Actual time worked will now be calculated at the top end of three four-hour periods. Less than 4 hours worked will be counted as the employee having worked four hours; between four and eight hours will count as eight hours and between eight and twelve hours will count as twelve hours. In other words, if an employee agrees to work on a flexible rest day and only works one hour, she must be paid for four hours at the increased overtime rate.

The above amendments will come into force once they are promulgated by the President. The changes to annual leave and elimination of national holidays will come into force on 1 January, 2017.

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