Although information in this post is also relevant to threads in the Legal Forum, I thought I would post it here for those people specifically looking for creative and legal ways to employ themsleves.
As many of you know, it takes a lot of capital to start a business that can legally apply for work permits for its foreign workers. I believe a local company needs at least $5M. In addition, there are other revenue and quota restrictions.
Several foreigners who have set up local companies, usually the smallest $500K invested local companies, have found that they can own 100% of the shares in their company and act as the fu4ze2ren2 of their company. This allows them to open business bank accounts, apply for business services like phone lines, etc. However, many such foreigners find out later that they can’t employ themselves as an employee. Of course, they are recognized as the business owner/investor by the R.O.C., as surely they had to be approved as a foreign investor through the Investment Commission. It’s just that they can’t work for their own company. And as such, company profits in the form of dividends to the forieign owner would be taxed at 20% (assuming that the foreigner hadn’t been in Taiwan for at least 183 days of the year) without the benefit of placing that profit partly into the owners “salary” that could be taxed in a more favorable tax bracket.
Bottom Line: Are there any legal loopholes to let foreign business owners cut their own work permit and ARC from working for their own company, especially when the company is not invested enough to qualify to hire foreigners?
Answer: Yes, there is one that I have tested. Although, it is a bit obsecure. Only a few of you would qualify.
The labor law has a provision (Article 51, Section 3) that states [paraphrasing]: A foreigner who has worked and resided continuously in Taiwan for five years is able to apply for any work that is allowed foreigners for any company. This is a loose translation. However, the real punch behind this law is that with these qualifications, the capital and other restrictions for what kind of company could employ foreigners would be dropped in your case, including the capital requirements.
This should not be confused with an open work permit. Open work permits are for APRC holders and give you open rights to start working anywhere at will. An “Article 51, Section 3” work permit still means you have to apply per company, but it means that the restrictions for what kind of company you can work for are dropped.
This has allowed me to apply for a work permit and subsequently an ARC although my company is a local company with only 500K investment. So, for some of you long-term foreigners who don’t quite qualify for an APRC yet, this is a nice pit-stop.
However, as with all Taiwan law, there is usually a large degree of ambiguity of how the law is interpreted in the lower adminstrative agencies. The issue with this law is the words “residency” and “continuous”. In order to apply for the “Article 51, Section 3” work permit, you must first get the Foreign Affaris Police Station to issue you a “Certificate of Residence” that would show your had five years. In addition, you have to show all past work permits (from the MOEA, MOE, CLA, etc.) and company release certificates.
If any of your are interested in how it is done and how I got around some of the more restrictive provisions of the law, please let me know. The agency that issues these work permits is the Council of Labor Affairs (CLA).
