Background In Taiwan, physical restraint is commonly used in institutions to protect residents from falling or injury. However, physical restraint should be used cautiously to avoid side effects, such as worse cognition, mobility, depression, and even death. Objectives To identify the rate of physical restraint and the associated risk factors in institutionalized residents in Taiwan. Methods A community-based epidemiological survey was conducted from July 2019 to February 2020 across 266 residential institutions. Among the estimated 6,549 residents being surveyed, a total of 5,752 finished the study. The questionnaires were completed by residents, his/her family or social workers. The cognition tests were conducted by specialists and a multilevel analysis approach was used to identify cognition/disability/medical history/special nursing care/BPSD risk factors for physical restraints. Results Of the 5,752 included institutionalized residents, 30.2% (1,737) had been previously restrained. Older age, lower education level, lower cognitive function, higher dependence, residents with cerebrovascular disease, pulmonary disease, dementia, and intractable epilepsy, all contributed to a higher physical restraint rate, while orthopedic disease and spinal cord injury were associated with a lower physical restraint rate. Furthermore, residents with special nursing care had a higher restraint rate. Residents with most of the behavior and psychological symptoms were also associated with an increased restraint rate. Conclusions We studied the rate of physical restraint and associated risk factors in institutionalized residents in Taiwan. The benefits and risks of physical restraint should be evaluated before application, and adjusted according to different clinical situations.