FTC Imposes NT$100,000 Fine on a foreign LLC, Taiwan Branch for Illegal Multi-Level Marketing Operations

TAIPEI,  The Fair Trade Commission (FTC) announced on October 15 that, during its 1773rd committee meeting, it resolved to penalize a foreign LLC,  Taiwan Branch. The company was found to have engaged in multi-level marketing operations without prior filing to the commission, violating Article 6, Paragraph 1 of the Multi-Level Marketing Supervision Act. A fine of NT$100,000 has been imposed.

According to the FTC, prior to its formal filing in September 2024, the company had already promoted its "Distributor Bonus Plan" in Taiwan through foreign leaders and executives from its headquarters. The plan featured incentives such as a "5*5 Repurchase Bonus," "Team Matching Bonus," and "Team Generation Bonus," structuring multi-level commissions and team-based compensation. This model involved recruiting members to establish a hierarchical organization for promoting and selling goods or services, which aligns with the multi-level marketing activities defined by the Multi-Level Marketing Supervision Act. However, the company failed to file the required documentation with the FTC before commencing operations, thus breaching the law.

The FTC reiterates its reminder to all enterprises: before initiating any multi-level marketing activities, companies must comply with Article 6 of the Multi-Level Marketing Supervision Act by preparing and submitting all required documents and information to the commission to avoid legal penalties.