To enhance corporate investment momentum in Taiwan and address talent shortages, Taiwan's National Development Council (NDC) said it is considering a system similar to Japan's "J-Skip" program, which allows those with a master's degree or higher, or advanced skills and a certain income level, to apply for permanent residency after just one year.
Taiwan is at a critical juncture for economic development and industrial transformation, with significant demand for talent in key industries such as semiconductors and digital technology. As global supply chains reorganize, countries are fiercely competing for talent, making it challenging for Taiwan to attract international professionals. Policies must respond swiftly to these dynamics.
A Commercial Times report said this idea has gained support from the Legislative Yuan, which argues that rather than seeking talent internationally, the government should focus on retaining international students already in Taiwan. These students are better candidates for the workforce than talent hired directly from overseas because they have a good understanding of Taiwanese culture and language.
However, there is a need to relax the current legal restrictions and shorten the time required to obtain permanent residency to achieve that goal.
Talent residency law relaxation is long overdue
Lawmakers from all parties support amending parts of the "Act for the Recruitment and Employment of Foreign Professionals," and the NDC is coordinating inter-ministerial policies to promote these ideas. Specifically, international students with a bachelor's degree or higher will be able to obtain permanent residency more quickly, with Ph.D. holders being eligible for permanent residency after just one year, creating a more competitive talent recruitment system.
Statistics show that as of the end of April, the NDC had issued 56,427 effective permits to foreign professionals, an increase of over 80% since the implementation of the recruitment law in 2017. Additionally, 14,187 permits had been issued to specific foreign professionals, including 9,942 employment gold cards.
According to the Ministry of the Interior, there are approximately 57,000 international students in Taiwan with valid study permits. The top three source countries are Vietnam, Indonesia, and Malaysia. Among these, 11 foreign professionals with Taiwan PhDs have one year of residency deducted, 512 foreign professionals with Taiwan master's degrees have one year deducted, and 164 foreign professionals with Taiwan PhDs have two years deducted.
Second-wave of labor shortage
In the 1980s, Taiwan's booming economy, increased national income, and rising labor costs led to labor shortages in agriculture, forestry, manufacturing, and construction. This was the first time Taiwan introduced foreign workers.
Taiwan-based job website 1111 pointed out that 40 years later, Taiwan now faces a second wave of labor shortage due to the following factors:
Serious Decline in Birth Rate: The post-war baby boom in the 1930s-1950s filled the labor force and drove economic development, earning Taiwan the title of "Asian Tiger." However, since the 1980s, Taiwan's birth rate has plummeted. According to the Ministry of the Interior, the population decreased by over 180,000 in 2021 compared to the previous year, with only 153,820 births, a historical low. This decline is a significant factor in the labor shortage.
Increase in Job Openings Due to Taiwanese Companies Returning: The US-China trade war has prompted Taiwanese companies to move their factories from China back to Taiwan, leading to an estimated NT$570 billion in investment and over 50,000 job opportunities. However, the return of high-end production has created a talent supply-demand imbalance.
Industry Reshuffling: The pandemic has accelerated trends in internet technology, healthcare, and online entertainment, causing talent to shift away from traditional industries, services, and tourism. The semiconductor industry, offering high salaries, has intensified this talent war, making it difficult for companies to find employees.
Businesses are now turning to international students studying in Taiwan after their efforts to attract overseas professionals failed to deliver satisfactory results. For students from Southeast Asian countries, Taiwan is attractive due to its cultural and linguistic similarities and higher wage levels. Many industries are struggling to fill positions despite offering high salaries. This issue is not limited to labor-intensive industries but extends to mid- and high-level job markets as well. Finally, the government is relaxing restrictions on foreign nationals working in Taiwan, a long overdue reform.\
