TAIWAN Law and Practice Contributed by: Lihuei Mao, Dennis Yu and David Tien, Lee and Li Attorneys-at-Law
Sale of Business/Assets There is no automatic transfer of employees in a busi - ness/asset transfer. Under the LSA and the M&A Act, any transfer of employees (eg, from the target compa - ny to the purchaser) is subject to the consent of each employee. If an employee declines the offer extended by the purchaser, the target company must extend severance pay and other statutory entitlements to such employee when terminating their employment agreement. If an employee consents to the transfer, in general, their seniority accrued at the target company must be recognised by the purchaser. If the target company has a labour union, the union may negotiate more favourable employment terms and conditions Typically, in a share acquisition, no employee will be transferred or made redundant if such transaction only involves the change of the shareholder of the employer. The sale of shares in the target company will not entitle its employees to severance pay nor entitle the target company or the new owner to the right to terminate the employment contracts of the employees (unless any separate statutory cause of termination exists). with the purchaser. Purchase of Shares However, for a share deal structured as a merger where the target company is merged into the surviving company, the process described in “Sale of Business/ Assets” will apply. 11. Intellectual Property and Data Protection 11.1 Intellectual Property Considerations for Approval of FDI IP is generally not an important aspect in screening FDI in Taiwan, except in certain sensitive industries, such as the manufacture of semiconductors and mil - itary-related technology. In short, when reviewing an FDI application, the DIR will consider all factors and may seek the opinion of other government authorities, if necessary.
announced by the government each year; starting from 1 January 2026, the minimum monthly wage will be USD983 (NTD29,500). In Taiwan, it is common to reward employees through contractual or discretion - ary bonuses, which could be cash, stocks, options or another form. Under the Company Act, the AOI of a company must state a fixed amount or a percentage of the annual profit for distribution as employees’ compensation, which can be distributed in the form of shares or cash. Social Insurance Schemes Except as otherwise prescribed by law, an employer must enrol all employees in the statutory social insur - ance schemes (ie, labour insurance, employment insurance, labour occupational accident insurance and national health insurance) from the first day of their employment and pay the premiums on a monthly basis. Labour Pension Schemes There are currently two types of statutory pension schemes in Taiwan: one under the LSA (Old Pension Scheme) and the other under the Labour Pension Act (New Pension Scheme). Under the Old Pension Scheme (which generally applies to local employees hired before 1 July 2005 and to foreign employees), an employer must appro - priate labour retirement reserve funds ranging from 2% to 15% of the monthly salary of eligible employees and deposit such amount in a special account at the Bank of Taiwan each month. Under the New Pension Scheme (which came into effect on 1 July 2005), an employer must contribute an amount equivalent to at least 6% of each employee’s monthly pensionable salary to their individual pension fund account monthly. The employee may also volun - tarily contribute a portion (up to 6% of their monthly
salary) to the pension fund account. 10.3 Employment Protection
The acquisition of a Taiwan company can be in the form of a business/asset purchase or a share pur - chase.
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