Incorporation vs Employer of Record (EoR) in Taiwan: What’s the Best Option for Your Business?

Key Differences Between Incorporation and EoR

Cost and Compliance Considerations

• Incorporation Costs: Incorporating a business in Taiwan requires significant upfront costs, including legal, registration, and operational expenses. Additionally, ongoing costs for compliance with corporate governance, tax reporting, and employee benefits can add up over time.
• EoR Costs: Using an EoR typically involves paying a monthly service fee, which covers payroll processing, benefits administration, and compliance management. This is often more cost-effective for SMEs or companies that don’t require a physical presence in Taiwan.
• Compliance Management: Incorporation requires businesses to manage compliance with local regulations directly, which can be complex and resource-intensive. In contrast, the EoR takes on these responsibilities, ensuring compliance with Taiwan’s labor laws and reducing the legal burden on your company.

Operational Flexibility

• Incorporation: Incorporating a local entity provides full control over all aspects of your business operations in Taiwan, including hiring, employee management, and strategic decision-making. This is ideal for companies with long-term goals and a commitment to the Taiwanese market.
• EoR: While the EoR handles legal and administrative responsibilities, companies retain control over day-to-day business operations. However, they have less flexibility in customizing HR policies and managing payroll, as these tasks are handled by the EoR.

Choosing the Right Option for Your Business

SMEs vs. Large Businesses

• Small and Medium-Sized Enterprises (SMEs): For SMEs looking to enter the Taiwanese market quickly and cost-effectively, partnering with an EoR is often the best solution. The EoR allows SMEs to hire local employees and start operations without the need for substantial investments in infrastructure or legal resources.
• Large Businesses: Larger companies with long-term goals and significant resources may find incorporation a more suitable option. Incorporating in Taiwan provides greater control and autonomy over business operations, allowing companies to build a strong local presence and establish deeper connections with stakeholders.

Market Entry Goals and Risk Tolerance

• Short-Term Projects: If your business plans to enter Taiwan for a short-term project or to test the market, an EoR offers the flexibility and speed needed to get started without the commitment of incorporating.
• Long-Term Growth: For companies seeking long-term growth in Taiwan, incorporation may be the better option, despite the higher costs and longer setup time. Incorporation offers full operational control and allows for a more permanent market presence.
• Risk Management: Companies that want to minimize risk in a new market often prefer the EoR model. By outsourcing compliance and legal responsibilities to the EoR, businesses can reduce their exposure to local regulatory risks.

How AYP Can Help

AYP offers comprehensive Employer of Record (EoR) services in Taiwan, helping businesses navigate the complexities of local regulations while focusing on growth and strategy. Our EoR solutions ensure compliance with Taiwan’s employment laws, allowing you to enter the market quickly and efficiently. Whether you’re an SME looking for a flexible market entry solution or a larger corporation seeking to streamline operations, AYP provides the support you need to succeed in Taiwan.

With AYP, you can focus on managing your business while we take care of payroll, benefits, and compliance. Partner with us to ensure a smooth and compliant entry into the Taiwanese market.