The authorities concerned shall establish or coordinate with private institutions to establish the following elderly welfare institutions, based on the need of the elder:
1. Long-term care institutions.
2. Caring institutions.
3. Other elderly welfare institutions.
The norms of the scale, area, facilities, staff and scope of the above-mentioned elderly welfare institutions, and other related matters shall be set forth by the central authority concerned in consultation with central industry competent authorities.
Medical or nursing service for institutions listed in item 1 of this Article must be handled under the regulations in Medical Care Act, Nurse Act and any other Medical Affair and Profession Acts.
Each of the institutions listed in item 1 shall be provided alone, or together with others, such facilities or services. Charges to facilities and/or services are applicable as the revenue and expense of the institutions. The charge relating rules shall be reported to the municipal and city/county governments for approval.

According to item 1 from preceding Article, there must be “private” before the name of the elderly institution, if it is operated by a private organization. Furthermore, the affair of the institution must be added to the name of it.
Shall a public institution be run by a private institution, there must not be “public” or “private” before the name of the institution However, the name of the district where the institution locates shall be added to the name of it.

To establish elderly welfare institutions, individuals or groups must submit applications to the municipal and city/county governments for approval.
After being approved, a private elderly welfare institution must be registered as a juridical person within three months of establishment. However, small-scale institutions which meet the following requirements shall be exempted from this registration:
1. Do not take up a collection from the public;
2. Do not receive subsidies; and
3. Do not receive tax relief.
The subsidy in the proviso of subparagraph 2 in the preceding paragraph does not include items and standards designated or announced by the central authority concerned according to the national long-term care policy.
If the registration is not done within the period prescribed in item 2, an acceptable reason shall be provided by the institution to apply for an extension of three months. The original approval becomes invalid if the registration is not completed after the extension period.
The establishment relating items listed in item 1, such as approval requirement, application procedures, inspection period, review standards, issuance of permits, abatement and abolishment approvals, ceasing, suspending, closing, and resuming business, expansion and reduction, moving, finance, supervision and management, and any others shall be regulated by the central authority concerned.
The scale, area, facilities, staff allocation, scope, and other matters of establishing a small-scale institution listed in the proviso of item 2 will be set up by the central authority concerned in consultation with central industry competent authorities.
If expansion and moving referred to in item 5 involve the circumstances specified in Paragraph 3, Article 22 of the Long-Term Care Services Act, they shall be handled in accordance with Paragraph 1, Article 22 of the same act.

The elderly welfare institutions shall not engage themselves in making profit or any inappropriate promotions.
The authority concerned shall provide consultation, supervision, inspection, evaluation and reward to the elderly welfare institutions. The institutions shall not evade, impede or refuse the inspection mentioned in the previous item, and shall provide documents, information or other assistance whenever necessary.
When providing any consultation, supervision, inspection, and evaluation referred to in item 2, the personnel of the authority concerned shall present a certificate related to the performance of the duties or show a badge that is sufficient for identification.
Evaluation indicators shall be stipulated according to the size and nature of the senior citizens’ social welfare organizations. The objects, items, and measures of evaluation, the objects and methods of rewards, and other related matters shall be set forth by the authorities concerned.

The authority concerned shall assign personnel to inspect the institutions which provide care without a permit in accordance with item 1, Article 36. The institutions shall not evade, impede or refuse the inspection, and shall provide documents, information, or other assistance whenever necessary.
When carrying out the inspection referred to in the preceding paragraph, the personnel of the authority concerned shall present a certificate related to the performance of the duties or show a badge that is sufficient for identification.

A written contract shall be signed between the elderly welfare institutions and the service recipients or their family members for a mutual understanding of rights and obligations.
The central authority concerned shall set forth a standard contract pattern based on the format and content of the contract mentioned in previous sentence. The things to be recorded or not recorded shall be listed in the pattern.
The pattern of the standard contract shall be published by the institutions and is to be delivered to the service recipients along with the receipts of payment. Unless otherwise specified, this must be seen as a mutually agreed contract, as stated in item 1 of this Article.

To ensure the right of the service recipients, the elderly welfare institutions must maintain public liability insurance for elders, and must have the ability to continuously operate the institutions.
The insurance relating items and amount must be set forth by the central authority concerned.
The standards for identifying the ability to continuously operate mentioned in preceding item will be set forth by the municipal and city/county government.

The governments and elderly welfare institutions shall manage and make proper use of the endowments from individuals and/or groups. Cash must be put as bank deposit in a designated account for elderly welfare relating business. However, if it is designated to be special purpose by the donor, it cannot be used in other ways.
The status of the receiving of donation mentioned in preceding item shall be proclaimed regularly to the public.

The municipal or city/county governments may work with private organizations to supervise the service quality of the institutions that provide care for elders who do not have legal supporters or legal representatives; the institutions shall not evade, impede or refuse the inspection.