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Articles from October 2007

Foreign Professionals and Work Permits

Foreign professionals may legally work in Taiwan if they possess a bachelor’s degree from an accredited university and at least two years of work experience. Master’s degree holders are exempt from the work experience requirement, regardless of the industry in which employment is sought. Foreign nationals serving as company directors or supervisors that visit Taiwan to attend board or shareholders meetings only require a visitors’ visa, not a full work permit.

In most cases, the capital requirement for a company wishing to hire a foreign employee is NTD 5 million (approximately USD 152,000) for the first year. For companies established more than one year, the average annual revenue required for a period of time for up to three years is NTD 10 million (approximately USD 304,000). While there is no written requirement, companies are required, in practice, to maintain an annual revenue of NTD 5 million for foreign-invested companies or NTD 10 million for local companies for each foreign professional they employ. Additionally, a foreign white-collar employee must be given a minimum monthly salary of NTD 47,971 (approximately USD 1,500).

After a foreign professional is granted a work permit, they may then apply for a resident visa at a Taiwan embassy or trade office. After arriving in Taiwan, they should then apply for an Alien Residence Certificate (ARC) from the National Immigration Agency. The foreign professional’s accompanying spouse and children are also eligible for an ARC that allows them to live in Taiwan.

The spouse’s ARC, however, is not a work permit and does not automatically entitle that person to work in Taiwan. The spouse must also meet the requirements of and apply for their own work permit if they take up a job offer in Taiwan. Foreign professionals and their spouses should also be aware that volunteering is considered “work” in the eyes of Taiwan’s authorities. The penalties faced by employers (and human resource managers) for hiring unauthorized foreign workers can be quite severe, including both fines and jail sentences.

English teachers are not considered business executives and are subject to a different set of work permit rules and regulations. Chinese professionals who need to visit Taiwan for business purposes are also subject to a separate set of rules and regulations. For our comprehensive overview of employment in Taiwan, please refer to this year's Watson Wyatt Employment Terms and Conditions Asia Pacific (Taiwan).

For further information on application procedures for international or Chinese professionals to Taiwan, please contact Lloyd Roberts at +886-2-2311-2345 ext. 638. A list of the relevant fees is available here

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Central Bank Issues Procedures for Letters of Credit Funded from China

The Taiwan Central Bank's Department of Foreign Exchange has issued detailed rules for Taiwanese banks to accept remittances from China and issue Letters of Credit to ship goods from third countries to China. The rules were sent to designated Foreign Exchange Banks in an Interpretive Letter dated 22 October 2007. For more information, please contact Shan Lee.

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Certification Now Required for Organic Food in Taiwan

Michael Fahey
Over the past year, Taiwan has unveiled a new regulatory regime governing the certification of organic foods that will require all organic food products including organic poultry and meats to be certified and registered by February 2009. After this deadline, organic products that do not comply with the new certification or registration requirements will be subject to fines ranging between NT$200,000 (c. US$6000) and NT$1 million (c. US$30,000) for each violation. Under the new laws, the cabinet-level Council of Agriculture has significantly expanded powers of inspection and enforcement to back up those fines. In essence, the Council's role is shifting from away its traditional emphasis on supervising and guiding the development of new production technologies toward a more consumer-oriented regulatory role.

One unfortunate consequence of this new regulatory environment is that it threatens to take imported organic products off the market. Importers need to be aware that as of this writing (Oct. 2007) it is impossible to comply with the new certification requirements because the Council has not yet recognized any international certification bodies.

Background

Authoritative market figures for Taiwan's organic food industry are currently unavailable although officials at the Council have indicated that the new registration regime will enable them to begin publishing such figures by the end of the decade. Still, by all accounts, the market for organic food products in Taiwan is growing rapidly.

In 2004, for example, the Asia Chapter of the Organic Trade Association's Export Study noted that Taiwan had more than 1,000 independent specialist shops selling organic and natural foods. A more recent Chinese-language study by the Council from 2006 noted significant consolidation in the industry as the number of outlets decreased to 782 of which more than half were now members of chain stores such as Li-Ruhn (39 locations) and Cotton Fields (seven Taipei-area stores). Membership in a distribution coop for organic foods run by the Homemaker's Union and Foundation rose from 3,000 to 12,000 between 2001 and 2006. The density of retail outlets is the highest in Taipei City where there are more than 200 including one part of the wealthy eastern side of the city that boasts four chain outlets within 200 meters along Nanjing East Road.

At the same time, high-end gourmet supermarkets, a relatively new development in Taiwan, are exposing sophisticated consumers to a wide range of imported organic foods from North America and Europe. Taking note of these trends, the Uni-President Group, which runs Taiwan's ubiquitous 7-11 convenience stores and Starbucks, is now operating a chain of stores selling organic and other natural foods as well as online organic supermarket.

Current Regulatory Regime

Taiwan's legislature passed the Production and Certification Management of Agricultural Products Act (the "Act") at the end of 2006. The Act, which took effect on 29 January 2007, requires that all agricultural products including crops and livestock that are labeled as organic must be certified within two years. For organic products produced in Taiwan, this means certification by one of Taiwan's four accredited domestic certification bodies:

In fact these domestic certification organizations have been operating for a number of years and accredited by the Council since 2003. But since certification was recommended, rather than required, consumers questioned how organic many products on the market actually were.

Under the new required certification regime, Taiwanese certification bodies certify agriculture products as organic based on a set of standards known as the Certification Standards for Organic Agricultural Products and Organic Agricultural Processed Products (the "Certification Standards") that is attached as an appendix to the the Regulations Governing Certification Management of Organic Agricultural Products and Organic Agricultural Processed Products (the "Domestic Organic Products Regulations"). These are the enforcement rules to the Act that govern the registration and the labeling of organic food products produced in Taiwan. Regrettably, none of the acts and regulations promulgated or issued over the past year have been translated into English. Several of their direct predecessors are, however, available in translation online through the Taiwan Organic Agriculture Information Center.

The Certification Standards are divided into four major sections:


The Crop Standards, for example, require adequate fencing or buffering zones and a two or three year transition period for short term and long term crops respectively. There are also blanket prohibitions on the use of synthetic chemicals and all GMOs and their derivatives. Please note carefully that the translations linked above are based on an earlier version of the Certification Standards from 2003 although they are very close to the current regulations in substance.

Two attachments to the Certification Standards further set forth permissible limits for heavy metals in water, soil, and organic fertilizers as well as a list of permitted biocides.

Once a product has been certified organic by a domestic certification number, it may carry both the Certified Agricultural Standards ("CAS") Organic Mark and the organic mark of the certifying organization. Examples of the CAS Organic Mark with the marks of the four current domestic certification organizations on the right side of the href="http://info.organic.org.tw/supergood/">Taiwan Organic Agriculture Information Center's splash page. Each of the certification organizations also has a mark for products certified as transitional organic.

While the Certification Standards largely incorporate and unify standards issued in 2003, they are important because imported organic agricultural products must be certified by an accredited international certification organization whose certification standards must be deemed by the Council to comport with its Certification Standards for organic food products produced in Taiwan.

The Act gives the Council the authority to issue regulations governing certification of imported organic food products, which the Council has done in its "Regulations Governing Certification Management Imported Organic Agricultural Products and Organic Agricultural Processed Products." (the "Imported Organic Products Regulations"). Other than matters pertaining to accreditation of international certification bodies these regulations run in parallel with their counterparts for domestic producers.

After certification, both sets of regulations require that before an imported organic food product can be labeled and sold as such in Taiwan, the product must be registered with the Council. Registration requires the filing of the following documents:


  1. Copy of business license
  2. Certification documents issued by accredited international certification body
  3. Certification of quarantine inspection for imported agricultural products
  4. Proposed Chinese labeling
  5. Other documents required by the Council

The certification documents issued by the accredited international certification body must include the following: