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What are the key considerations when using agents overseas?

If you appoint a commercial agent to act on your behalf and under your instruction in England, Wales and Scotland, the Commercial Agency Regulations (and equivalent legislation in Northern Ireland) will apply to your relationship with such agent.

These regulations set out statutory requirements that parties cannot contract out of, but at the same time it helps to establish the certainty and standard for commercial agency relationships in key aspects such as your control over the customer relationship or maintaining the quality and standard of your products, services and brands.

One of the key legal issues when appointing an agent overseas is that the agency activities in a non-UK territory will not be covered by the those rules so due diligence on the local laws is a must. For example, if you appoint an agent in an EEA country, the appointment will be subject to the local law of such country implementing the EU Commercial Agents Directive.

If you appoint an agent to perform activities in both the UK and EEA, then the agency relationship will be regulated by the regimes in both the UK and EU. Currently the UK’s regime is largely aligned with the EU’s, but any post-Brexit regulatory changes in either the UK or the EU may give rise to conflicting legal requirements that will make cross-border agency activities more challenging.

You should also consider the tax implications when appointing an agent as it may give rise to additional tax liabilities, especially when the agent acts for you outside the your tax jurisdiction.

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