Reading a Commercial Lease Before You Sign in Taiwan
Key clauses in Taiwanese commercial leases that affect fit-out timelines, rent escalation, and your ability to assign the lease if expansion plans change.
A favourable storefront can become a liability if the lease terms constrain your fit-out, escalate rent faster than revenue, or trap you with personal guarantees. We review dozens of commercial leases each year for expansion clients. These are the clauses that most often cause problems.
Fit-out period and rent commencement
Some landlords offer a rent-free fit-out period; others charge full rent from the signing date. Confirm the exact date rent begins and whether utilities are included during renovation. Delays from building management approval are common in older Taipei buildings.
Use restrictions and signage
Verify that your business category is permitted under the building’s registered use. A restaurant concept may not be allowed in a unit zoned for retail only. Signage rights — especially for upper-floor units — should be specified in writing.
Rent escalation schedule
Taiwan commercial leases often include annual increases of 3–5%. Model these increases across your five-year projection. A location that works at year-one rent may fail by year three.
Assignment and subletting
If expansion does not work, can you assign the lease or sublet? Many landlords prohibit both without consent. Understand your exit options before committing personal guarantees.
Restoration obligations
“Return to original condition” clauses can mean removing all fit-out at your expense. Negotiate a clear definition of what restoration requires, especially for kitchen installations and plumbing modifications.
Get independent review
We are not lawyers, but we flag clauses that have caused problems for similar businesses and recommend legal review before signing. The cost of a solicitor’s review is small compared to a five-year rent commitment.