Distributor / Agent
Use a local partner's channels and licences
Definition
A local distributor buys and resells, or an agent develops customers on commission, while the company has no local entity.
Suited for
- Products needing local channels and service
- Sectors with local licensing requirements
Common legal structures
- Distribution agreement
- Commercial agency agreement
Preparation
- Define exclusivity, territory and term
- Check local commercial agency registration and termination compensation rules
Limitations
- Some countries register and protect commercial agents, which can restrict termination
Tax notes
- An agent who habitually concludes contracts may create a permanent establishment
Key risks
- Channel dependence
- Weak control over brand and pricing
- Choice of dispute resolution forum
Steps
- 1Define the partnership model
- 2Screen and diligence partners
- 3Negotiate and sign
- 4Register the agency where required
- 5Set performance and compliance reviews