Can businesses act as sales agents for foreign traders?

Sales agents for foreign traders are a cooperation model that brings many benefits to businesses. By becoming an agent, businesses not only can access quality goods from international markets but also expand their business capabilities and increase revenue. Furthermore, through cooperation with foreign traders, businesses can improve their reputation, learn from experience and access international standards, contributing to increasing competitiveness in the market.

Role of sales agents for foreign traders

Agents buying and selling goods for foreign traders act as a bridge between foreign traders and the Vietnamese domestic market. Specifically:

• Accessing the Vietnamese market: Through agents, foreign traders can quickly penetrate the Vietnamese market without having to open a direct branch. This helps save costs and reduce initial risks.
• Minimize risks: Agents are responsible for negotiating contracts, promoting products, implementing import procedures and processing payment transactions, and helping foreign traders avoid legal and administrative risks.
• Cost savings: Hiring an agent will save personnel and management costs for foreign traders because agents usually have a system and understand the Vietnamese market.

Can businesses act as sales agents for foreign traders?

Pursuant to Article 50 of Decree 69/2018/ND-CP, Vietnamese enterprises are allowed to act as sales agents for foreign traders. However, there are some exceptions:

• Goods banned from import and export: For goods on the list of banned exports, temporarily suspended exports, banned imports or temporarily suspended imports, businesses are not allowed to sign agency contracts.
• License: For imported and exported goods under the license, businesses can only sign agency contracts after receiving approval from the licensing state management agency.

Conditions for trading with foreign traders:

Money transfer in foreign currency: The Vietnamese agent needs to request the foreign trader to pay in freely convertible foreign currency through the bank to purchase goods according to the agency contract.

Legal regulations on sales agents for foreign traders

Legal regulations related to goods purchase and sale agents for foreign traders are governed by the Law on Commercial 2005 and Decree 69/2018/ND-CP. These regulations ensure transparency and legality in the process of implementing agency contracts.

Forms of agents

According to Article 169 of the Law on Commercial 2005, goods purchase and sale agents have the following forms:

• Off-take agent: An agent who undertakes to sell a complete volume of goods to the principal.
• Exclusive Agent: An agent may only sell to one merchant in a certain geographic area.
• General agent: An agent organizes a system of affiliated agents to carry out the purchase and sale of goods.

The parties can agree on other forms of agency suitable to their business needs.

Responsibility for declaring tax on goods that Vietnamese traders accept as buying and selling agents for foreign traders

Article 51 of Decree 69/2018/ND-CP stipulates that goods that Vietnamese enterprises receive as buying and selling agents for foreign traders must be subject to taxes and other financial obligations. Enterprises are responsible for declaring, registering and paying relevant taxes such as:

• Value Added Tax (VAT): According to Circular 219/2013/TT-BTC, VAT calculation prices for goods purchase and sale agency activities need to be declared.
• Corporate income tax (CIT): Enterprises must declare and pay corporate income tax.

Import and export procedures for goods under agency contracts for foreign traders

Article 52 of Decree 69/2018/ND-CP stipulates that when exporting and importing goods under agency contracts with foreign traders, they need to be carried out according to normal import and export processes. Specifically:

• If the goods are licensed, the enterprise must have a license from a specialized management agency.
• If the goods are subject to specialized inspection, businesses must comply with regulations on inspection of import and export goods.

Consulting services on businesses acting as sales agents for foreign traders in Long Phan

Working as sales agents for foreign traders is a great business opportunity for Vietnamese businesses. At Long Phan, we provide detailed consulting services on:

• Consulting on legal regulations and conditions for establishing agents for foreign traders.
• Support import and export procedures, tax declaration and agency contracts.
• Detailed advice on agency forms.
• Support to ensure businesses comply with current laws and optimize business operations.

To act as sales agents for foreign traders, customers need to clearly understand tax regulations, import-export procedures, and contracts to ensure legal operations. Contact Long Phan via the hotline 0906735386 for detailed support on procedures and agency contracts.