Joel:
Thank you for your interesting question regarding the agent
requirements in Asia. Fortunately, the US government has done a lot
of the footwork for us, (albeit a little hard to find).
I started off the search by calling two US government agencies. The
Department of Commerce at
(202)482-4008, was helpful and directed me to the USATRADE.GOV
website, which is informative, but not helpful in this quest.
I was then directed to the department of state, where I really got
some useful information, someone at usatrade.com (1-800-USA-TRADE)
told me about documents that the US government produces called
”Country Commercial Guides”. These PDF documents are produced for
every country. Incidentally they also had the information that we
seek. Here are some quotes regarding your initial question, broken
down by country. If, for some reason, I have left out a country,
please ask for a clarification, and I will answer post-haste.
Singapore : Agents not required
Source: http://www.state.gov/www/about_state/business/com_guides/2000/eap/singapore_CCG2000.pdf
Hong Kong:
“Hong Kong has no special legislation regarding agents and
distributors.”
Source:
http://www.state.gov/www/about_state/business/com_guides/2000/eap/hongkong_CCG2000.pdf
China: “U.S. exporters need to use a domestic Chinese agent”
Source:
http://www.state.gov/www/about_state/business/com_guides/2000/eap/china_CCG2000.pdf
Indonesia: Not required.
Agents are not required, but are highly recommended, as “Appointment
of an Indonesian agent (or distributor) requires care, since it is
difficult to get out of a bad relationship.”
“For sales to the private sector, the appointment of an Indonesian
sole agent is not required by law, although Indonesians agents
prefer to have this kind of relationship.”
Source:
http://www.state.gov/www/about_state/business/com_guides/2000/eap/indonesia_CCG2000.pdf
Taiwan: Recommended
“Most foreign firms enter the market through a Taiwan agent. Taiwan
firms
prefer the partnering aspect of an agency relationship. Although some
firms
are willing to act only as distributors, there is a fear that firms
seeking
distributors are not serious about the market and will not support
their
distributor. Firms selling equipment or machinery frequently find it
necessary to find a partner willing and able to do some assembly or
manufacturing in Taiwan. Although not necessarily a formal joint
venture,
these efforts require a higher degree of commitment to the
marketplace.”
Source:
http://www.state.gov/www/about_state/business/com_guides/2000/eap/taiwan_CCG2000.pdf
Philippines: Recommended
“Capital equipment imports usually go through an
agent or distributor before reaching the end-users. Some end-users,
however, import directly.”
Source:
http://www.state.gov/www/about_state/business/com_guides/2000/eap/philippines_CCG2000.pdf
Korea: Probably Needed.
Korea has quite complex import requirements and practices. I quote
from the link below:
“Only traders registered with the government are authorized to import
goods in their own names.”
In other words, you can deal direct, but you must be registered with
the government.
“The most common means of representation include: appointing a
registered commissioned agent (or more commonly known by Koreans as an
“offer agent”) on an exclusive or non-exclusive basis, naming a
registered trading company as an agent, or establishing a branch sales
office managed by home office personnel with Korean staff.
Only traders registered with the government are authorized to import
goods in their own names. Appointing a registered trading company
(rather than an "offer agent") as an agent has the advantage that such
agents can handle all the paperwork of importing and import for their
own account. Registered trading companies tend to be larger firms and
to split their business between exports and imports. However, they may
be less attentive to building the U.S. supplier's business and place a
higher emphasis on diversifying their portfolio of products from
different countries. Similarly, while the general larger trading
companies may be influential and well known in the market, they also
may not devote as much attention to a single product as do
smaller firms.”
Source:
http://www.state.gov/www/about_state/business/com_guides/2000/eap/korea_CCG2000.pdf
India: Yes
I quote:
“For companies wishing to sell their products or services in
India without establishing a local presence by way of a
subsidiary, joint venture or branch office, it will be
necessary to carefully choose and appoint an agent. Given
the specifics of the product segment and the vastness of
the Indian market, in some cases, it may make sense to
select several regional agents.”
Source:
http://www.state.gov/www/about_state/business/com_guides/2000/sa/india_CCG2000.pdf
Pakistan: Not required, but like in most cases above, recommended.
“The Commercial Service of the U.S. Department of Commerce (USDOC) can
provide assistance in locating potential agents and representatives
abroad through its Agent/Distributor (ADS) and Gold Key services
available through USDOC district offices in the United States.”
Source:
http://www.state.gov/www/about_state/business/com_guides/2000/sa/pakistan_CCG2000.pdf
Sri Lanka: Not required.
“Direct marketing usually takes place when a product is sold on
a one-time or irregular basis. Companies with regional
branches or representatives have successfully entered the
market directly, but an agent is often crucial to penetrate
the market.
Source:
http://www.state.gov/www/about_state/business/com_guides/2000/sa/srilanka_CCG2000.pdf
I hope this answers your question. Each one of the above links are
Adobe PDF files, and are suitable for printing. They are all very
complete, and make interesting reading.
I wish you well with your endeavors in Asia, and do offer my
assistance should you need a clarification.
Regards,
Colin |
Clarification of Answer by
colin-ga
on
08 Jun 2002 07:15 PDT
Hello Joel:
I am glad to clarify the question on the use of agents in Asia. Here
are the missing countries.
Japan: Highly recommended
+++
http://www.state.gov/www/about_state/business/com_guides/2001/eap/japan_ccg2001.pdf
“Establishing a direct presence in Japan is the best way to penetrate
the Japanese market,
but can be a prohibitively expensive strategy to launch. The use of
agents/distributors is a more
realistic marketing strategy for the small/medium-sized U.S. firm, but
this approach requires
great care in the selection of the representative.
Distributors in Japan usually cover a specific territory or industry.
Import agents are
often appointed as sole agents for the entire country (although there
is no statutory requirement
that this be done). While in some cases exclusivity may be necessary
to ensure a strong
commitment by the Japanese agent towards expanding sales, a U.S.
company should not be
pressured into handing over control of the whole market if there is
doubt as to the ability or
willingness of the Japanese company to develop the entire market.
Regional exclusivity, a
limited term of representation, minimum sales, or qualitative
indicators of sales efforts may be
recommended in exclusive agency contracts.
”
Vietnam: Yes
+++
http://www.state.gov/www/about_state/business/com_guides/2001/eap/vietnam_ccg2001.pdf
“American companies interested in doing business in Vietnam may do
so indirectly through the appointment of an agent or distributor in
Vietnam. (Note: U.S.
companies new to Vietnam should conduct sufficient due diligence on
potential local
agents/distributors to ensure that specific permits, facilities,
manpower, and capital are
6 of 118
available.) U.S. firms which want a direct presence in Vietnam must
establish a
commercial presence utilizing the following options: 1) a
representative office license; 2)
a branch license; 3) a foreign investment project license under
Vietnam’s revised Foreign
Investment Law.
”
Cambodia: No
+++
http://www.moc.gov.kh/laws_regulation/prk-moc-trading.htm
“Article 1: Both Cambodian and Foreign Companies, which are registered
with the Ministry of Commerce shall, be allowed have the rights to
freely engage in trading activities.
All trading activities shall be subject to payment of tax as
determined by law.
Article 2: The provision stipulated under Article 1 above shall not be
applied to the
Investment Companies, which are governed under the Law on Investment
Law of the
Kingdom of Cambodia.
Trading activities shall be listed in the schedule of activities not
entitled to investment incentives as stipulated in the Sub-Decree No.
88/ANK/BK dated December 29, 1997 on the Implementation of the Law on
Investment of the Kingdom of Cambodia.
”
http://cf.heritage.org/index/country.cfm?ID=24
“Cambodia's average tariff was 9 percent in 1998 (based on import
duties as a percent of total imports), down from 11.07 percent in
1997; as a result, Cambodia's trade policy score is 1 point better
this year. Import licenses have been abolished for most items but
remain in effect for pharmaceuticals.
”
Laos No: But registration with the government is required.
+++
http://www.business-in-asia.com/laos_importexport.html
“The government regulates the import of goods by systematically
classifying them into groups or types of goods like those encouraged,
controlled and prohibited by the state through a taxation and duties
scheme.
The encouraged imported goods are machinery and equipment required for
the construction of the basic economic infrastructure.
The importers of foreign goods must be enterprises registered
correctly under the relevant laws of Laos and operating in authorized
business sectors.
The goods prohibited for import under regulation No. 482 dated
8/2/1994 of the Ministry of Commerce include all types of war items,
all kinds of drugs, toxic chemicals and dangerous industrial products
and all types of obscene items.
”
Thailand: No for consumer, yes for government.
+++
http://www.state.gov/www/about_state/business/com_guides/2001/eap/thailand_ccg2001.pdf
“Distribution and sales channels of industrial goods normally comprise
two channels: 1)
exporter, importer to end-user; and 2) exporter to end-user. The
selection of distribution and
sales channels depends largely on the type of product and the
end-user. Products that require
after sales service should have an importer representing them locally.
Generally, the end-user’s
confidence will increase if there is a place where he/she can go and
get assistance every time a
machine needs service. The end-user normally prefers dealing with an
agent or distributor as
there is not any language and distance barriers. The end-user can
expect an immediate response
to inquiries. The agent or distributor also facilitates customs
procedures for the end-user. It
should be noted that, in general, only local agents, distributors, or
manufacturer’s branch offices
in Thailand are eligible to enter bidding for government tenders.”
Nepal: Yes.
+++
http://www.state.gov/www/about_state/business/com_guides/2001/sa/nepal_ccg2001.pdf
“U.S. exporters sell through a Nepal-based intermediary such as a
trading company or a local
agent or distributor.”
Bhutan: Must be licensed through the Ministry
+++
http://www.asiatradehub.com/bhutan/trade.asp
Bangladesh : Yes.
+++
http://www.state.gov/www/about_state/business/com_guides/2001/sa/bangla_ccg2001.pdf
“The primary channel for selling U.S. goods in Bangladesh is through a
resident agent or
representative (importer, wholesaler, or distributor). An agent may be
appointed on an exclusive
or non-exclusive basis. Approximately half of Bangladesh’s imports are
made through tender or
direct purchase by public sector corporations, autonomous bodies, and
government-controlled
corporations. These agencies prefer to deal with local firms acting as
exclusive agents or
distributors of foreign manufacturers and suppliers. An exclusive
agency or distributorship
arrangement ensures that foreign suppliers submit only one bid. In the
private sector, too,
businesses prefer deals with exclusive agents to ensure after-sales
service, continuous supply of
spare parts, and to solve possible future technical problems.
”
Burma: License required.
+++
http://216.239.37.100/search?q=cache:nP5BsiDoxJMC:cf.heritage.org/index/country.cfm%3FID%3D102+burma+import+regulations&hl=en
“Burma has 14 tariff bands ranging from 0 percent to 40 percent. The
average tariff rate is 30.6 percent (based on import duties as a
percent of total imports). Non-tariff barriers include licenses and
import bans. The Economist Intelligence Unit reports that "a number of
ad hoc non-tariff restrictions remain: restrictions were imposed on
imports in March 1998, when non-priority imports were banned; further
restrictions were imposed in September 2000, with traders limited to
importing Kt1m/month…. [L]icenses are required to import goods; proof
of foreign-exchange earnings is required."
Mongolia : Recommended
+++
http://www.state.gov/www/about_state/business/com_guides/2001/eap/mongolia_ccg2001.pdf
“Many US companies are represented in Mongolia by distributors or
agents who handle internal
distribution and marketing. The US Embassy in Ulaanbaatar can help US
exporters find
appropriate sales agents in Mongolia. A distributor search is an
excellent way to gauge interest
in your product and begin the process of finding a suitable
representative.”
Joel, I apologize for missing these Asian countries, and hope that
this added information and links will help you in your market
research. I look forward to serving you again.
Sincerely,
Colin
|
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