Foreign Professionals in Taiwan: Key Changes to the Labor Pension System Effective January 1, 2026

Effective January 1, 2026, amendments to Taiwan's Act for the Recruitment and Employment of Foreign Professionals significantly reform the labor pension system applicable to foreign professionals.

Previously, most foreign professionals were eligible to participate in Taiwan's Labor Pension Act (New Pension Scheme) only after obtaining permanent residency (APRC). Under the amended law, foreign professionals and specified foreign professionals may participate in the New Pension Scheme from the commencement of their employment, without first obtaining permanent residency.

Key Changes

• Immediate Pension Coverage: Foreign professionals hired on or after January 1, 2026 are automatically covered by the Labor Pension Act from their first day of employment.

• One-Time Election for Existing Employees: Foreign professionals who were employed by the same employer before January 1, 2026 may elect to remain under the previous retirement system by submitting a written election to their employer no later than June 30, 2026. If no election is made by the deadline, they will automatically become subject to the New Pension Scheme.

• Employer Compliance Obligations: Employers must timely register eligible foreign professionals with the Bureau of Labor Insurance and make the required monthly pension contributions. Failure to comply may result in retroactive contributions, administrative penalties, and potential labor disputes.

• Transition Rules: Special transitional provisions apply to foreign professionals who obtained permanent residency before January 1, 2026, including possible retroactive pension contributions if no election is made within the statutory period.

• No Impact on Seniority: Changing to the New Pension Scheme does not affect an employee's accrued years of service for purposes such as statutory annual leave. Existing service years remain recognized.

• Settlement of Prior Service: Employees who switch from the old retirement system to the New Pension Scheme may, subject to statutory requirements, settle their accrued benefits under the previous system by agreement with their employer.

Practical Implications for Employers

The amendments require employers to review their employment arrangements with foreign professionals, including employment contracts, internal HR policies, and labor pension registration procedures. Companies employing expatriate executives, engineers, researchers, professionals, or Employment Gold Card holders should ensure that all pension obligations are properly addressed to avoid compliance risks.

At Wen Hui Attorneys-at-Law, we regularly advise domestic and multinational companies on Taiwan employment law, labor pension compliance, immigration, and workforce management. If your organization employs foreign professionals in Taiwan, we would be pleased to assist you in navigating these new legal requirements.