Overseas trial sales below expectations: how do you exit the market cleanly? A checklist to think through before you pull out

Short answer: Exiting a market cleanly depends on writing down your stop-loss point, contract termination terms and registration ownership before you start; when you pull out, close things off with a checklist.

Scenario: the three-month numbers are in

This is a hypothetical scenario, not a story about a specific client.

Your company's dried fruit has been on trial sale in the Philippines for three months. The product is registered under a local licensed importer, and the goods sit in a channel partner's warehouse; you are paid for what sells. The numbers are in: some people buy, but far below the threshold your team set internally.

Your boss decides quickly: “Wind it down.” The hard part is what comes next: what happens to the goods left in the warehouse? Should you keep the product registration? What about the trademark you already applied for? How does the contract with the importer end? If you want to come back someday, do you start over?

Below, these questions are laid out as one checklist. You will find that most items should have been thought through before you started.

Before you start: write down three things

Stop-loss point. What result means you continue and what means you stop should be written down before you spend money. For how to write it, see the last page of the presentation for assessing the Philippine market.

How the contract ends. The US Department of Commerce's Philippines Country Commercial Guide says there are no laws that impede termination of an agent or distributor contract in the Philippines, and contracts usually specify a 30-day termination notice ¹. So the point is whether your contract states: how long the notice period is, what happens to inventory after termination, and how data is returned. For the full clauses, see what a distribution agreement should include.

Registration ownership. When the registration is under the importer's name, the contract should state that the registration documents belong to you and that the other party will cooperate with a transfer; see your product registration is under the importer's name: what if you want to switch later.

Exit checklist: seven things

Product registration: pulling out does not mean letting it go

For a food CPR to be transferred to a new holder, the conditions are that the product has no change requiring new registration, the new holder has a valid LTO, and an agreement between the previous and new holders transferring ownership is attached ². Cosmetics are different: a change of company due to a change of distribution rights requires a new notification ⁶.

So when you pull out, at least get copies of the registration documents back. If you come back someday and switch to another importer, you have something to hand over.

Inventory: four paths

• Sell through within the notice period. Under consignment, the goods sit in the channel partner's warehouse and you are paid for what sells, so you never had to buy out a whole container first.
• Ship back to Taiwan. Freight and documents cost extra; ask first before deciding, since handling it locally is sometimes better.
• Donate. The Philippine Food Donation Act (RA 9803) provides that a person who donates apparently wholesome food in good faith for charitable purposes is not subject to civil or criminal liability arising from the food's nature, age, packaging or condition; this does not apply to injury or death of a beneficiary caused by gross negligence or intentional misconduct ³.
• Destroy. Leave this for last, and ideally state in the contract who pays for it.

Trademark: if you do not use it, you cannot keep it

The Philippine Intellectual Property Code requires a trademark applicant to file a declaration of actual use with evidence within 3 years from the filing date, otherwise the application is refused or the mark is removed from the Register ⁴; after registration, another declaration must be filed within 1 year from the 5th anniversary of registration ⁴. A registration remains in force for 10 years ⁴.

If you still want to keep your brand's place in the Philippines after pulling out, factor in these two deadlines: without actual use, the registration may not be maintained.

Company: if you have already set one up

The Philippine Revised Corporation Code (RA 11232) provides that a voluntary dissolution that does not prejudice creditors can be effected by a majority vote of the board of directors and a resolution of stockholders owning a majority of the outstanding capital stock ⁵; where creditors are affected, a verified petition for dissolution must be filed with the Securities and Exchange Commission, and the stockholder approval threshold rises to two-thirds ⁵. For the actual procedure and tax clearance, work with a local lawyer and accountant.

Record of reasons: so the next time does not start from zero

LUFÉ's Market Test page says that if a product does not pass, “the report will spell out why, and what conditions would need to change to try again.” Pulling out is the same: write the numbers, the reasons and what would make it worth trying again on one page, and keep it with the registration documents.

When this article does not apply

• Only one channel is not selling and you have not tried others. Switching channels is not exiting the market; for four approaches, see the market entry modes comparison table.
• You already have a dispute with the importer. At that point you need a lawyer, not a checklist.
• You have already hired people locally. Labor rules apply separately, and this article does not cover them.

Frequently asked questions

What does “pulling out” mean? In the exhibition industry, it means taking down the booth after the show ends. In this article, pulling out means a brand ending its sales in an overseas market, including closing off the contract, registration, inventory, trademark and company.

How long does exiting a market take? It depends on the contract. Agent and distributor contracts in the Philippines usually specify a 30-day termination notice ¹; if you have set up a company, dissolution follows its own procedure ⁵.

Can I come back after pulling out? Yes, but it depends on what you kept. Transferring a food CPR to a new holder requires the new holder to have an LTO and a transfer agreement ²; cosmetics need a new notification when the company changes due to distribution rights ⁶; a trademark without actual use will be removed ⁴.

One small next step

Open your contract with the overseas importer or distributor and look for three things: the termination clause, what happens to inventory after termination, and who owns the registration documents. If all three are written in, pulling out is just following the checklist; if one is missing, now is the time to add it. If you have not started yet, do a Market Test first, NT$10,000–20,000, and stop there if it does not pass. If you are not sure whether your contract says enough, send us a question on LINE.

This article is a summary of experience and practice, not legal advice. Last verified: 2026-10-25.