A Taiwan distribution agreement is where a foreign brand either keeps its market or gives it away — and the giving away happens in clauses that looked harmless at signing. This checklist walks the twelve clauses that decide the relationship, line by line, with what to write and what to refuse. It isn’t legal advice; it’s the operator’s view of where brands get hurt, to bring to your lawyer before the partner’s template arrives.
The twelve clauses
1. Parties, territory and channels
Name the exact contracting entities (verify the Taiwan registration), define territory as Taiwan (not “Greater China” or “Asia”), and define channels explicitly — physical retail, e-commerce, HORECA, group-buy — because channel-split arrangements depend on this line being precise.
2. Exclusivity — scope, conditions and lapse
Avoid granting it early. If granted: limit by channel or region, tie it to annual purchase or sell-through targets, and write an automatic lapse (exclusivity converts to non-exclusive if targets are missed) rather than a right to terminate you must litigate. Prohibit sub-distribution without consent.
3. Term, renewal and review points
Short initial term (one to two years) with performance-based renewal; scheduled reviews at 90 days and annually against the targets in clause 2.
4. Products, pricing and price changes
Product list by SKU with the right to add or withdraw; supply price and currency; a mechanism for price changes (notice period, cost-driven adjustments); recommended retail pricing guidance within what Taiwan competition law permits — get local counsel on resale-price language.
5. Minimum purchase, forecasts and stock
First-order quantity, annual minimums, rolling forecasts, safety stock, shelf-life-at-delivery commitments, and what happens to slow-moving stock (return rights, markdown funding, buy-back on termination).
6. Registration and notification ownership
The clause that locks brands out of their own market. State who holds each regulated-category registration or notification, that the brand may require transfer or cooperation with re-registration at any time, and the cooperation obligations on termination — with penalties for refusal. Where possible, hold registrations through a neutral entity instead (see the distributor guide).
7. Trademark, IP and domain names
Brand owns all marks; distributor may use them only under license for the term and territory; distributor may not file any trademark, domain, social handle or marketplace brand registration in its own name; all such assets created during the term transfer to the brand on termination (file your marks first — Taiwan trademark registration).
8. Marketing obligations and budget split
What the distributor commits (staff, in-store activity, campaign participation, KOC programs) and what the brand funds; approval rights over claims and creative (Taiwan’s claims regime makes this a liability clause — see the claims guide); who owns content produced.
9. Data and reporting
Monthly sell-in, sell-through by channel and door, inventory and expiry aging, marketing activity — in a defined format, on defined dates; audit rights. No reporting clause, no visibility.
10. Product liability, insurance and recall
Who carries the product liability cover Taiwanese retailers require and at what limits; recall procedure, decision rights and cost allocation; quality-complaint handling timelines.
11. Termination and transition
Termination triggers (performance, breach, change of control, insolvency); notice periods; stock disposition (buy-back price, sell-off period, no dumping); transfer of registrations, channel introductions, customer data and marketplace accounts; non-disparagement; a transition-cooperation obligation with teeth.
12. Governing law, dispute resolution and language
Taiwan law is often practical for enforcement against a Taiwanese party; arbitration versus courts is a lawyer’s call; specify the governing language version if the contract is bilingual.
Three red flags in a partner’s template
- Exclusivity for “Taiwan and all channels” with no targets or lapse.
- Registrations “to be held by Distributor” with silence on transfer.
- Termination allowed only for breach, with no performance trigger — you can be stuck with a non-performing partner indefinitely.
Before the contract: the partner decision
A good contract doesn’t fix a wrong partner. Vet first (the six checks in our distributor guide), decide the structure — distributor, operator or hybrid (see import agent vs distributor vs operator) — and negotiate from evidence you’ve built in Taiwan rather than from hope.
FAQ
Should the agreement be in Chinese or English?
Bilingual is common; specify which version governs. Your Taiwanese partner will operate from the Chinese text — make sure it’s a faithful translation reviewed by your counsel, not the partner’s.
How long should exclusivity last if we grant it?
Short, conditional and channel-limited: a year with targets and automatic lapse is a common starting point. Longer exclusives should be earned by performance, not granted at signing.
Can we recover registrations if the distributor refuses to cooperate?
Legal routes exist but are slow; the practical protection is the contract (cooperation obligations with penalties) and, better, holding registrations through a neutral entity from the start.
Do we need a Taiwan lawyer?
For the agreement, yes — this checklist tells you what to ask for; local counsel tells you how to write it enforceably.
Write the exit on the day you sign
Every clause above matters most on the day the relationship ends. i-connect helps foreign brands structure Taiwan partnerships — and can hold the legal spine as a neutral operator so the sales partner stays replaceable. Talk to us before the template lands in your inbox.
Last updated: September 2026