Employment in Taiwan

At a Glance:

• Taiwan’s economy may have slowed down in the past few years; however, there are still opportunities for expats, especially in the high-tech sector.
• The country relies heavily on trade, which makes it very vulnerable to crises in the global market.
• Science parks play a fundamental role in the success of Taiwan’s high-tech sector: companies in these clusters profit from a great infrastructure, tax benefits, collaboration, and more.
• Subtlety is key in Taiwan’s business etiquette, though Western forms of greetings, for instance, have found their way into the country.

Known as one of the four “Asian Tigers” — which also include the highly developed economies of Hong Kong, South Korea, and Singapore — Taiwan has been a popular expat destination for years thanks to its position as one of the world leaders for high-tech products.

Within one generation, Taiwan’s workforce helped the country progress from an aid-receiving nation to one of the world’s most prosperous — this is also known as the Taiwan Miracle. After a short recession in 2009, Taiwan’s companies came back with full force and helped the national economy achieve double-digit growth numbers in the following year. The real GDP growth has slowed down since with an estimated 1.7% in 2017. Unemployment figures have remained comparatively low at around 4% across the past few years, though.

Agriculture in Taiwan

In terms of national GDP, Taiwan’s agricultural sector plays only a very minor role, contributing less than 2%. However, the men and women taking care of the nation’s rice fields have made the country nearly independent from imports of this staple food, despite how scarce arable land is in Taiwan (less than a fifth of the total area). The country also produces sizeable amounts of pork and fish.

The High-Tech Sector

The main focus of companies working in Taiwan has been the high-tech sector, with the production of semiconductors and LCD panels being particularly important pillars. Most companies working in Taiwan’s high-tech sector operate from the many science parks in and around the densely populated metropolises of the country, some of which we have introduced in our article on moving to Taiwan. For more information on the nation’s science parks and the main industries in which high-tech corporations operate, please refer to the second page of this article.

Other Industrial Output

High-tech products continue to dominate the industrial output of a majority of companies in Taiwan. Apart from modern technologies, the country also has “classical” industries including chemicals, metallurgy, textiles, and plastics. Production and export of machinery as well as petrochemical industries are also among the more prominent and important branches.

Taiwan’s Services Sector

With the country’s transformation away from an agriculturally dominated economy came the rise of the tertiary sector. As in most highly developed countries today, the efforts of the people working in Taiwan’s services sector make it the largest contributor to the national economy, producing over three-fifths of the GDP.

The financial sector is one of the major players among the tertiary sector, owing to the nation’s position as one of the largest global creditors and aid donor with a particular focus on Asia and Central America. Tourism also plays a considerable role, with more and more locals working in Taiwan’s hospitality sector. However, there’s been a slight decline in Taiwan’s tourism sector due to notably fewer Chinese visitors following the 2016 election of Taiwan’s pro-independence party, as well as due to a general slowdown in China’s economy.

Trade is by far the most important pillar not only of the services sector, but also the economy as a whole. However, this makes a very large percentage of the workforce dependent on the global market and vulnerable to crises. This is somewhat counterbalanced by the numbers and importance of small and medium-sized companies working in Taiwan, as they can usually react with more flexibility to economic turbulence. Despite their strained relationship, the People’s Republic of China is actually Taiwan’s biggest trading partner, followed by the USA and Japan.

Taiwan’s Science Parks

Taiwan’s leading technology and science companies are heavily clustered in science parks where they have access to great infrastructure, joint research opportunities, tax benefits, as well as efficient shipping methods for their products. The clustering can also lead to powerful synergy effects. The percentage that the several hundred companies located in Taiwan’s science parks contribute to the national GDP is well in the double digits.

Today, the various science and industrial parks are usually grouped into three general areas: the Hsinchu Science Park — arguably the most well-known and profitable of the bunch — the Central Taiwan Science Park, and the Southern Taiwan Science Park.

Hsinchu Science Park

The opening of Hsinchu Science Park (HSP) in 1980 was Taiwan’s first foray into the science park concept, which was introduced some 30 years earlier in Silicon Valley. The HSP was instrumental in establishing Taiwan as a prime location for high-tech companies and to this day attracts major foreign investments, with a turnover of 1.04 trillion TWD (over 34 billion US dollars) in 2016.

The HSP is split into six main locations: the parks in Hsinchu, Jhunan, Tongluo, Longtan, and Yilan, as well as the second park in Hsinchu focusing on biomedical science. The companies found there are mostly known for their expertise in producing semiconductors, as well as optoelectronics and biotechnology. Due to the local science park, the city of Hsinchu boasts some of the highest income levels in Taiwan and is also one of the larger expat destinations in the country.

Southern Taiwan Science Park

The second addition to the science park landscape of Taiwan, with locations in Kaohsiung and Tainan, has a similar focus as the trailblazing HSP. The Southern Taiwan Science Park (STSP) mainly operates in the industries of integrated circuits, optoelectronics, and biotechnology, as well as green energies.

The latter is an important market in Taiwan, as the nation’s lack of resources makes it necessary to import most of its energy needs, typically in the form of fossil fuels. The year 2009 saw the implementation of various acts by the Taiwanese government to invest in and promote the use of renewable energies to help lower the nation’s carbon emissions. By 2025, the goal is to also eliminate the reliance on nuclear power, which accounted for 14% of Taiwan’s electricity production in early 2017. Major investments in the green energy sector have already taken place, with more scheduled to be undertaken in the years to come.

Central Taiwan Science Park

The Central Taiwan Science Park is the latest expansion of Taiwan’s ever-growing high-tech sector, having opened for business in 2003. It is largely based in and around Taichung, another major city in Taiwan, and includes the Huwei Park, Houli Park, Advanced Research Park, Erlin Park, as well as the Taichung Park itself.

The science park provides not only the local population but also expats with many employment opportunities. Again, the main industries the park focuses on are largely identical to those of the other parks.

There has been some debate on the future direction of the science parks, as it became apparent that the integration of new and more diverse sectors will be necessary to ensure Taiwan’s top position in the world’s high-tech markets for the next few years. As we have outlined in the first part of this article, the country’s economy is very dependent on exports and sensitive to changes in the world market. Measures to solve this problem are already underway, though: there is a lot of investment in upcoming technologies such as the Internet of Things and smart cities; cooperation between academia and business, as well as founding start-ups, is also strongly encouraged and supported.

Business Etiquette and Taxes in Taiwan

Etiquette for Business and Workplace

As a general rule, you can expect your Taiwanese coworkers and superiors to be fairly knowledgeable on usual Western forms of etiquette and conducting business, due to the openness of Taiwan’s economy to foreign trade and investment. The use of eye contact and handshakes, for example, will be a lot like what you may be used from any Westernized nation. You should, however, wait for instructions to be made, rather than introducing yourself.

The Asian concept of face is also an aspect of Taiwanese culture — you are unlikely to see outbursts of emotion, especially regarding negative ones. At the workplace, it is particularly important not to be too loud or lose control of your emotions — subtlety is key.

Below is a list of some other important factors to keep in mind:

• Your workplace attire should be conservative and professional, but you will not have to dress particularly smart.
• Official titles are highly valued in Taiwan, so make sure to address your counterpart with any titles they might have.
• Do not openly discuss money.
• Hierarchy is an important factor in the Taiwanese workplace, and knowing your place is expected of you.
• Gifts are very welcome, even in a business setting.
• Knowing and pronouncing your coworkers’ names correctly is key. Remember that the family name precedes the given name in Taiwan.
• Try to always be punctual, as being late is highly offensive to your counterpart.

Expat Taxation — There’s Plenty of Information Available

Expats with limited knowledge of Mandarin or Taiwanese definitely profit from the fact that nearly all government agencies provide key information in English. This is obviously particularly important in regard to complicated processes, such as filing your taxes. The National Tax Administration in Kaohsiung, for example, provides answers to all the main questions foreigners in Taiwan may have on tax-related issues. Furthermore, the excellent Handbook for Foreign Spouses in Taiwan, provided by the National Immigration Agency, offers useful info on the same matters.

If you are regarded as a fiscal resident — i.e. staying in Taiwan for at least 183 days in a taxable year — you will be fully taxed under Taiwan’s system of progressive tax rates (up to 45% for high earners). Taiwan is party to a number of double taxation treaties — due to the complicated nature of conducting official foreign relations with Taiwan, the list of treaty partners is somewhat limited, though. For shorter stays, you will only be taxed on your income from local sources.

The taxable year in Taiwan follows the calendar year (1 January to 31 December). Fiscal residents have to file their annual tax return by 31 May, latest.