Do I Need a Local Entity to Hire in Taiwan?

In Taiwan, a "local entity" typically refers to a recognized business presence, such as a subsidiary or branch office, that can legally employ individuals. This setup allows you to manage payroll, comply with tax obligations, and meet local employment regulations effectively.

Without establishing a local entity, you may find it challenging to handle essential employer responsibilities, including payroll registration, tax remittance, and issuing compliant employment contracts. An alternative is to use an Employer of Record (EOR), which can hire on your behalf while ensuring compliance with local laws.

What is Required to Employ Someone in Taiwan?

• Local employing entity required to directly employ? Yes (you need to register with the Ministry of Economic Affairs)
• Payroll registration required? Yes (mandatory registration with the National Taxation Bureau)
• Withholding/tax remittance required? Yes (employers must withhold income tax and remit it to the tax authority)
• Social contributions required? Yes (contributions to the Labor Insurance and National Health Insurance are mandatory)
• Local employment agreement required? Yes (written contracts are standard practice in Taiwan)
• Mandatory benefits to budget? Yes (statutory leave, health insurance, and pension contributions)
• Works council/collective agreements considerations? Usually (certain sectors may have collective agreements in place)

Best Options If You're Hiring in Taiwan

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but be cautious about misclassification risks.

While hiring contractors can be a flexible option, Taiwan has strict labor laws that protect workers. If a contractor's role resembles that of an employee, you may face legal challenges. Ensure that:

• The contractor has multiple clients and is not dependent on your business
• They control their work schedule and methods
• Their work is project-based and not integral to your core business

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to establish a local entity in Taiwan, depending on registration requirements and documentation.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated NT$15,000–NT$30,000 per month ($500–$1,000)
• Payroll provider: Estimated NT$1,500–NT$3,000 per employee per month ($50–$100)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated NT$30,000–NT$100,000 per year ($1,000–$3,300)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Taiwan

Hiring in Taiwan can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Taiwan quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.