With the recent passage of the Act for the Recruitment and Employment of Foreign Professionals, conditions for attracting high-ability international talent to live and work in Taiwan have been broadly and substantively improved.

Why the need?

The Act was drafted by the National Development Council (NDC) to address the pressing need for more effectively attracting and retaining international talent, to fill growing shortages in Taiwan’s domestic talent pool. As the NDC explained, “In this era of the globalized knowledge economy, sufficiency and quality of talent is a core factor in international competitiveness. Taiwan is currently facing the challenges of an exodus of talent and fierce competition among countries to attract talent. Hence, this law is drawn up to enhance Taiwan’s recruitment and employment of foreign talent, and thus raise its ability to compete internationally.”

Even without the exodus of talent referred to by the NDC, Taiwan was already facing a talent shortage in many key areas. This stems largely from demographic causes, as Taiwan’s very low birth rate – one of the world’s lowest – has caused the working age population to shrink steadily year by year.

Meanwhile, a serious brain drain is exacerbating this situation, as large numbers of Taiwan’s best and brightest are lured abroad by higher pay and better career prospects in China and elsewhere. The OECD has assessed Taiwan as having the world’s most serious total emigrant brain drain, while the UK economic research institution Oxford Economics has forecast that by 2021 Taiwan will have the most acute brain drain of any country in the world.

These circumstances pose a massive threat to Taiwan’s future economic development, and make it absolutely essential for Taiwan to lure in more of the personnel it needs to fill these deficiencies of technical, managerial, and other vital kinds of high-skilled talent in its work force.

According to a survey by international human resources firm Manpower Group, released in November 2016, 73 percent of 1,005 employers polled in Taiwan said that finding talent was difficult. This figure, the second worst among the 43 countries and regions surveyed, was up by 16 percentage points from the corresponding survey of a year earlier, underlining how fast the situation is going from bad to worse.

These shortages evidently cannot be rectified, at least in the near term, only by measures to improve the supply and retention of local talent. Such measures are important, but cannot be enough on their own. Therefore, the only other way to respond to them is by measures to promote an increased inflow of foreign talent.

However, businesses – both local and foreign – have long complained about the difficulties of recruiting key international talent to meet staffing needs that they cannot fill through local recruitment. This has been impeded by a host of regulatory barriers restricting the residence and employment of foreign nationals. On top of this, foreign professionals who do take up residence and employment in Taiwan have found their lives and careers so limited by hard-to-endure regulatory constraints that many elect to move away to countries where they can expect to enjoy more favourable treatment.

Against this background, it is only too clear that Taiwan’s government needs to be doing as much as it possibly can to attract high-skilled personnel from around the world.

Who does Taiwan need?

High-skilled white-collar personnel needed to fill managerial, technical, marketing and other positions in local or foreign-invested industrial and commercial enterprises are by no means the only kind of foreign talent that Taiwan needs to attract. Its universities are in dire need of attracting more high-quality teaching staff to enhance their internationalization and reverse their falling trend in international rankings. This need, again, has been made all the more urgent by a sharp exodus of academic staff poached by universities on the other side of the Taiwan Strait.

At the same time that its universities need help in attracting more international faculty, they also need help in attracting more international students. With the depressed birth rate resulting in steeply falling enrolment in higher education, many universities and university departments are struggling to attract even the bare minimum of students that they need for their very survival. Being better able to attract foreign students will not only provide a means of overcoming this difficulty, but will also supply a promising source of future talent for all parts of the economy.

As advanced economies have long understood and taken full advantage of, attracting foreign students pays great dividends over time if at least some of them stay to work after they graduate. Having become at least partly acculturated, and most likely having acquired at least some proficiency in local languages, they will be able to adapt to the local work environment and integrate into the local society much better than people recruited at a later stage of their lives. If, as will often be the case, they form families and settle permanently, the host economy and society will gain yet more.

That is why countries such as Germany and Norway seek to attract foreign students with free-tuition policies, which they know will pay them back many times over with ensuing gains to their work force and population. Such benefit is truly invaluable in today’s advanced economies, especially for an aging and soon-to-be hyper-aging society that pressingly needs a transfusion of young blood to offset its worsening demographic imbalance.

Another segment of foreign talent that Taiwan needs to set out its stall to attract is entrepreneurs, especially young entrepreneurs with innovative ideas for business startups that match the government’s ambitious plans for connecting Taiwan to global tech clusters and creating new industries for the next generation, as embodied in the Asia Silicon Valley Development Plan launched in September 2016. While Taiwanese themselves have plenty of the skills, vision and know-how for achieving these goals, an increased inflow of foreign talent to augment the talent supply can only enhance the startup and entrepreneurship ecosystem. The multi-faceted value they bring, for strengthening international linkages, broadening target horizons, and opening up optimal opportunities for global marketing success, can hardly be overstated.

So the needs for attracting well qualified and able foreign nationals to Taiwan is clear enough. But other countries, including Taiwan’s main economic rivals, also have a similar need, and have previously responded to it more proactively than Taiwan.

While the competition to attract the cream of the international work force has continued to intensify, Taiwan has lagged well behind others in luring such people to its shores and keeping them when they do come. The numbers attest to this all too starkly. According to figures released by the Ministry of Labor, there were fewer than 32,000 foreign white-collar professionals working in Taiwan as of the end of March this year. Well over a quarter were Japanese, roughly one-sixth were American, and a little over one thousand each were from Canada and the UK. Almost a quarter of those with work permits were teachers, while just one in eight, or less than 4,000, were employed in providing professional, scientific and technical services.

Contrast this with Singapore where, according to figures released by the Ministry of Manpower, as of June 2017, there were 189,900 foreign nationals working under the Employment Pass for foreign professionals, managers and executives, plus 179,400 with the S Pass for mid-level skilled staff – a total of 369,300 white-collar foreign workers versus Taiwan’s 32,000, or more than eleven times as many, despite Singapore having a resident population (citizens and permanent residents) of under 4 million versus Taiwan’s resident population of more than 23 million.

This, then, is the background against which the NDC mapped out the provisions of the Act for the Recruitment and Employment of Foreign Professionals.

How did the Act get made?

Having well appreciated the need for across-the-board revision of laws and regulations to create more open and welcoming conditions for foreign professionals to live and work in Taiwan, the NDC set the ball rolling in October 2016 by mapping out a set of proposals for liberalizations relating to visas, residence, insurance, naturalization, retirement and other pertinent matters, to make Taiwan’s work environment friendlier and thereby encourage foreign talent to come to Taiwan and stay here. In mapping these out, it consulted the views and suggestions of foreign chambers of commerce and other representatives of the expatriate community, and considered what measures advanced and competitor countries such as the U.S., UK, Japan, Korea and Singapore had taken to achieve similar purposes.

Since the wide ambit of the proposed legislation involved the jurisdiction of many different departments of government, the NDC needed to conduct extensive coordination with the authorities concerned to finalize the terms of the draft Act.

After the draft was completed and had been approved by the Premier and President, it was posted on the Online Public Policy Participation Platform for the requisite period of public notice and comment, and was submitted to the Legislative Yuan in late April 2017.

While the first draft of the Act included provision by which select foreign nationals might have a chance of gaining ROC nationality without having to renounce any other citizenship, narrowly conferring as a privilege what foreign residents have long argued ought to be liberally granted as a right, this was instead provided for by amendment of the Nationality Act, and therefore removed from the final draft.

Although the draft Act received strong cross-partisan support in the legislature, some voices were raised against it, expressing exaggerated fears of foreigners pouring in to displace local people from jobs. Fortunately, such short-sighted, blinkered and ill-considered arguments did not prevail. But objections were successful against provisions that would have allowed foreign university students or graduates out of school less than two years to come to Taiwan for internships of up to two years. In light of assertions that this could be abused by businesses as a means of taking in low-paid foreign interns to replace higher salaried local employees, these provisions were excised. But apart from this, the other provisions of the draft were endorsed with only relatively small modifications, and it passed its third reading in the legislature on October 30, 2017.

One of the strongest advocates of the law during the enactment process was legislator Karen Yu (余宛如). As Yu explained in an interview for BusinessNext, the main purpose of the Act was to help local industries, especially those enterprises with their sights set on going global. She emphasized that “every single industry would benefit from foreign talent,” and citing her own experience as an entrepreneur, suggested that foreign talent is often a crucial ingredient for success.

While this Act has already been added to Taiwan’s statute law, much work remains to be done before it can be put into effect. Many sets of subsidiary regulations and letters of interpretation must be drafted by the various agencies concerned. For example, regulations for teachers must be set by the Ministry of Education, regulations on the issuance of Employment Gold Cards must be set by the Ministry of the Interior in consultation with the Ministry of Labor and Ministry of Foreign Affairs, and regulations on artist work permits must be set by the Ministry of Labor in consultation with the Ministry of Culture. The NDC is actively coordinating the completion of all subsidiary measures, and expects all to be ready for the Act to go into effect before the Chinese New Year in 2018.

Original :Meet Startup @TW