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Employer of Record (EOR) in Taiwan

A Taiwan EOR (Employers of Record) is a company or service provider that assists foreign businesses in employing and managing workers in Taiwan without establishing their legal entity or setting up an in-house HR department.

What is a Taiwan Employer of Record?

A Taiwan EOR acts as the legal employer of record for the employees, handling various administrative tasks related to employment.

When a foreign company wants to establish a presence or hire employees in Taiwan, it can choose to work with an Employer of Record service. The EOR takes care of essential responsibilities such as payroll processing, tax withholding, social insurance contributions, benefits administration, compliance with labor laws, and other HR-related tasks. By partnering with an EOR, the foreign company can effectively outsource the administrative burden and focus on its core business activities.

The EOR model benefits companies that do not have a legal entity or established infrastructure in Taiwan but still wish to engage local talent and operate within the country’s legal framework. It allows businesses to navigate the complexities of local employment regulations and ensures compliance with local labor laws and practices.

By working with a Taiwan Employers of Record, foreign companies can have a streamlined and compliant approach to hiring employees in Taiwan without establishing their legal entity or setting up an in-house HR department.

What services does a Taiwan Employer of Record provide?

A Taiwan Employers of Record (EOR) typically provides services to assist foreign companies in employing and managing workers in Taiwan. These services may include:

  1. Employee Onboarding: The EOR helps with the hiring process, including employment contracts, offer letters, and other necessary documentation. They ensure compliance with local labor laws and regulations.
  2. Payroll Processing: The EOR handles monthly payroll calculations, including salary disbursement, tax withholding, and social insurance contributions. They ensure accurate and timely employee payment while complying with local tax regulations.
  3. Benefits Administration: The EOR manages employee benefits, such as health insurance, pension plans, and other statutory benefits required by Taiwan law. They handle the enrollment, contributions, and necessary paperwork associated with these benefits.
  4. Compliance and Legal Support: The EOR keeps up-to-date with Taiwanese labor laws and regulations, ensuring that the employment practices of the foreign company align with the local requirements. They assist with compliance, including employment contracts, termination procedures, and workplace policies.
  5. Tax Compliance: The EOR handles tax compliance matters related to employment, including withholding taxes from employee salaries, filing tax returns, and providing necessary tax documentation to authorities.
  6. HR and Employee Relations: The EOR may support HR matters, such as employee record-keeping, leave management, and employee grievances. They can guide local employment practices and help resolve any employment-related issues.
  7. Work Permits and Visa Support: If foreign employees require work permits or visas to work in Taiwan, the EOR can assist with the application process and guide immigration regulations.
  8. Termination and Offboarding: When an employment relationship ends, the EOR manages the termination process in accordance with local laws, ensuring proper notice periods, severance pay, and exit procedures are followed.

It’s important to note that the specific services provided by a Taiwan Employer of Record may vary depending on the service provider and the needs of the foreign company.

How do you engage a Taiwanese employer of record?

To engage a Taiwan Employers of Record (EOR), you can follow these general steps:

  1. Research and Identify Potential EORs: Look for reputable EOR service providers in Taiwan. Consider their experience, expertise, client reviews, and the services they offer.
  2. Initial Consultation: Contact the EORs you have shortlisted and request an initial consultation. During this discussion, explain your requirements, the number of employees you plan to hire, and any specific needs or concerns you may have. This consultation allows you to evaluate the EOR’s understanding of your business and their ability to meet your needs.
  3. Service Proposal and Agreement: The EOR will provide a service proposal after the consultation. This document outlines the scope of services, pricing structure, timelines, and additional terms and conditions. Review the proposal carefully and seek clarification on any aspects that require further explanation. If you agree with the terms, sign the agreement to formalize the engagement.
  4. Employee Information and Onboarding: Provide employee details to the EOR, including personal information, employment contracts, and any required documentation. The EOR will handle onboarding, ensure legal compliance, and set up payroll and benefits administration systems.
  5. Ongoing Collaboration and Communication: Maintain regular communication with the EOR regarding any changes in employee information, updates on HR policies, or other relevant matters. Stay informed about payroll cycles, reporting requirements, and compliance obligations.
  6. HR and Employee Management: Collaborate with the EOR on HR-related matters such as leave management, performance reviews, and employee relations. Seek their guidance on local labor laws and practices to ensure compliance and address any employee-related issues that may arise.
  7. Termination and Offboarding: If necessary, work with the EOR to manage employee terminations and offboarding procedures, ensuring compliance with local laws regarding notice periods, severance pay, and required documentation.

It’s important to note that engaging an EOR involves a contractual relationship, and it’s crucial to carefully review the agreement and ensure you have a clear understanding of the services provided, the fees involved, and the responsibilities of both parties.

What are the benefits of a Taiwan Employer of Record?

Engaging a Taiwan Employers of Record (EOR) offers several benefits for foreign companies looking to employ workers in Taiwan. Some of the key advantages include:

  1. Compliance with Local Labor Laws: Taiwan has specific labor laws and regulations that companies must adhere to when employing workers. EORs are well-versed in local employment laws and ensure that your business remains compliant. They handle employment contracts, payroll processing, tax withholding, and benefits administration according to local regulations.
  2. Simplified Entry into the Taiwanese Market: If you are a foreign company without an established legal entity in Taiwan, engaging an EOR allows you to enter the market quickly and easily. You can hire employees, set up payroll, and operate within the legal framework without establishing a separate entity or navigating complex legal procedures.
  3. Cost and Time Savings: Partnering with an EOR eliminates the need to establish and maintain your infrastructure, including legal entity establishment, HR department, and payroll systems. This can significantly save these administrative tasks time, effort, and costs. The EOR handles payroll processing, tax compliance, benefits administration, and other HR-related responsibilities, allowing you to focus on your core business activities.
  4. Local Expertise and Support: EORs have extensive knowledge and expertise in Taiwan’s local labor market, employment practices, and regulations. They can guide hiring practices, employment contracts, benefits, and other HR matters. A local partner with in-depth knowledge can help you navigate complexities, minimize risks, and make informed decisions.
  5. Flexibility and Scalability: Engaging an EOR offers flexibility in scaling your operations in Taiwan. You can quickly and easily hire or downsize your workforce based on business needs without the challenges of hiring and terminating employees directly. The EOR handles the administrative processes associated with these changes, ensuring a smooth transition.
  6. Employee Management Support: EORs often support HR matters, including employee onboarding, leave management, performance evaluations, and employee relations. They can offer guidance and best practices to ensure a positive work environment and employee satisfaction.
  7. Risk Mitigation: By partnering with an EOR, you can mitigate various risks associated with employment in Taiwan. The EOR stays updated on labor laws, ensures proper documentation, and handles compliance-related tasks, reducing the risk of legal penalties, fines, or reputational damage due to non-compliance.

It’s essential to assess your business needs and conduct thorough research to select a reputable and reliable Taiwan Employers of Record that aligns with your requirements and provides the necessary support for your expansion or employment goals in Taiwan.

What are the disadvantages of a Taiwan Employer of Record?

 

While engaging a Taiwan Employers of Record (EOR) offers several benefits, there are also some potential disadvantages to consider:

  1. Limited Control over HR Functions: When working with an EOR, you relinquish some control over HR functions, as the EOR becomes the legal employer of record for your employees in Taiwan. Certain HR decisions, such as hiring and termination, may require coordination with the EOR. If maintaining direct control over HR functions is essential to your business, working with an EOR may not align with your preferences.
  2. Potential Communication Challenges: Depending on the EOR service provider, there may be potential communication challenges, mainly if language barriers exist. Ensure the EOR you choose has proficient English language skills and can effectively communicate with you and your employees to avoid misunderstandings or miscommunication.
  3. Cost Considerations: Engaging an EOR involves costs, and assessing whether the benefits outweigh the expenses is essential. EOR services typically charge fees for their services, which can include setup fees, monthly service fees, and other associated costs. Evaluate the cost structure and compare it with the potential costs of establishing your legal entity and hiring in-house HR personnel to determine the most cost-effective solution for your business.
  4. Potential Dependency on the EOR: When relying on an EOR for employment and HR functions, there is a level of dependency on their services. Suppose you decide to discontinue your engagement with the EOR in the future. In that case, some challenges may be transitioning the employment responsibilities and processes back in-house or to another service provider. It’s essential to consider the long-term implications and have contingency plans.
  5. Limited Cultural Integration: As the EOR is responsible for administrative tasks, they may need more involvement in the cultural integration of employees within your organization. Building a cohesive company culture and fostering team dynamics may require additional efforts to ensure employees feel integrated and aligned with your business values.
  6. Potential Lack of Industry-Specific Expertise: EORs generally serve clients across various industries, which may result in a lack of specialized industry knowledge. If your business operates in a niche industry with specific HR requirements, getting industry-specific expertise and support from a general EOR service provider may be challenging.
  7. Geographical Limitations: EORs typically focus on specific regions or countries. If your expansion plans extend beyond Taiwan, you may need to engage different EORs or explore alternative solutions to ensure compliance and HR support in other locations.

When considering these potential disadvantages, conduct thorough research, evaluate your business needs, and carefully assess the pros and cons of engaging a Taiwan Employer of Record before deciding.

Conclusion

In conclusion, a Taiwan Employers of Record (EOR) can assist foreign companies looking to employ workers in Taiwan. They offer payroll processing, benefits administration, compliance with labor laws, and HR support. The benefits of engaging an EOR include compliance with local regulations, simplified market entry, cost and time savings, local expertise, flexibility, and risk mitigation.

However, it’s essential to consider the potential disadvantages as well. These include limited control over HR functions, communication challenges, cost considerations, potential dependency on the EOR, limited cultural integration support, lack of industry-specific expertise, and geographical limitations.

To make an informed decision, thoroughly research and evaluate your business needs, assess the advantages and disadvantages, and consider alternatives such as establishing a legal entity and in-house HR department. By carefully weighing the pros and cons, you can determine whether engaging a Taiwan Employers of Record is the right choice for your company’s employment and expansion goals in Taiwan.

FAQs

Yes, engaging a Taiwan Employers of Record can be suitable for businesses of various sizes. Whether you are a small startup, a medium-sized company, or a large multinational corporation, working with an EOR allows you to navigate the complexities of employing workers in Taiwan without the need for establishing your own legal entity or setting up an in-house HR department. EOR services can be particularly beneficial for companies that do not have an established presence in Taiwan but still want to access the local talent pool and comply with local labor laws.

 

Yes, a Taiwan Employers of Record can assist with hiring foreign workers in Taiwan. They have expertise in navigating the immigration and work permit processes and can provide guidance and support in securing the necessary permits and visas for foreign employees. The EOR ensures compliance with immigration regulations and assists with the required documentation and application procedures. By working with an EOR, foreign companies can effectively hire and manage both local and foreign workers in Taiwan while ensuring adherence to the legal and regulatory requirements.

cropped Travis Kliever 1
Article By
Travis is a global business development advisor. He has spent the last 14 years supporting business establishment and development in North America, Southeast Asia, and throughout the world. With multiple degrees from the University of Oregon, Travis currently splits his time between the US, and Bali, Indonesia. At RemotePad, Travis writes about remote work, hiring internationally and PEO/EOR business models.

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