Joel:
I have found information on your question regarding Eastern Europe
import regulations. I will quote similar sources as the previous
question you asked, and I responded to. Nonetheless, I find the
“Country Commercial Guides” from the Department of State to be well
written, informative guides to all the nuances to be considered, in
doing business with the other countries that the United States (or
other countries) should consider before conducting business overseas.
All verbiage in quotation marks has been is cited from the referenced
links within each countries section. (Sorry if that sounded like
legalese, I just didn’t want to repeat myself throughout the report).
Poland: Agents are not required.
“Polish companies tend to act more as distributors (importing, taking
possession of, and reselling a good) than as agents. Expensive
equipment is
an exception to this, since Polish companies generally do not have the
financial capability to make such purchases. However, there are no
laws
imposing roles for Polish importers, so distributor agreements may
take any
form beneficial to the parties involved.”
Poland seems to be very open to trade on many fronts, although
considered to be “young” in its trading with the west, it is sincerely
looking forward to do more international business, including
franchises.
“There are no Polish laws or regulations that specifically address
franchising…Financing is the most critical element for successful
entry and
penetration by U.S. franchisers. Although it has generally been
difficult
for foreign companies to locate Polish investors capable of becoming
master
franchisees, the number of local candidates interested in becoming
master
franchisees is on the rise.”
From:
http://www.state.gov/www/about_state/business/com_guides/2000/europe/poland_CCG2000.pdf
Czech Republic: Not required
The Czech republic and its dealings with foreign partners relies on
the distributorship system, whereas the host country provides the
land, buildings and workforce, and the investor supplies financing,
advertising and the product. Many large companies such as Procter &
Gamble, Colgate Palmolive, Wrigley and others have a firm commitment
here. The direct sales market is also strong, with entities such as
Avon, Mary Kay, Herbalife and Amway making headway.
See:
http://www.state.gov/www/about_state/business/com_guides/2000/europe/czechrepublic_CCG2000.pdf
Slovakia: Agents required.
“The Slovak Commercial Code closely follows German and EU legislation.
It recognizes agents, commission merchants, and brokers (who are not
obliged by contract).”
U.S. Department of Commerce has a service to assist in selecting
capable agents in Slovakia. Franchising is starting here, but not
widespread. Direct marketing has existed here before, but has been
subject to abuse, and is held in somewhat distaste within the general
public. Avon , Amway and others have a small presence here
nonetheless.
See:
http://www.state.gov/www/about_state/business/com_guides/2000/europe/slovakia_CCG2000.pdf
Hungary: Not required, but recommended.
“The use of local agents and distributors is recommended in those
instances when establishing a sales subsidiary is not feasible...
Selling sub-franchises, providing financing, setting lower master
franchise fees or using foreign master franchisees is the key to
succeeding in the Hungarian franchise market. Franchising is still
relatively underdeveloped in Hungary compared to U.S. or West European
standards.”
The report also details direct marketing:
“Direct marketing is still in its incipient stages. Telephone and
direct mail solicitations are only now being exploited, due in
part to improving telephone services (including frequently
changing numbers). Alternate forms of marketing such as personal
presentation marketing have been successfully employed by such
firms as Avon, Amway, Oriflame (Sweden) and Tupperware. With the
increasing penetration of cable and satellite TV and the growing
availability of credit cards, home shopping channels are targeted
to a growing segment of the population.”
See: http://www.state.gov/www/about_state/business/com_guides/2000/europe/hungary_CCG2000.pdf
Slovenia: Not required.
In 1990 the transition to a market economy began in Slovenia the
State department report asserts:
“foreign trade ceased to be the exclusive domain of a few specialized
companies. Today, any firm may now carry out both foreign and domestic
trade.”
However, as with so many of the emerging countries, a local agent is
advised.
See:
http://www.state.gov/www/about_state/business/com_guides/2000/europe/slovenia_CCG2000.pdf
Croatia: Not required.
According to export.gov ‘s Market Access and Compliance website ,
“Croatia has undertaken significant liberalization of the trade regime
and deregulation of trading activities. The Law on Trade permits all
legal persons, duly registered in accordance with the Law on
Companies, to engage in export and import activities. Croatia became a
full member of WTO in November 2000. In this context, Croatia has
committed to implementing additional trade liberalizing measures over
the transition period.”
See:
http://www.mac.doc.gov/EEBIC/COUNTRYR/Croatia/ccg2002/regul-standards.htm
Bosnia and Herzegovina : Not required.
B & H is broken up into many Free Trade Zones. And is member of the
Multilateral Investment Guarantee Agency, which guarantees investments
for long-term political risk insurance.
See:
http://www.fipa.gov.ba/guarantee.html
Serbia
Montenegro
Macedonia: Recommended
Looks like a lot of paperwork here. Although seeking foreign
investment and imports there are taxes and quotas on certain products
that “defend the national economy and to prevent mass export of
natural resources”
See:
http://faq.macedonia.org/economy/import.export.regulations.html
Bulgaria: Recommended
“U.S. exporters, especially small and medium size enterprises, will
most likely
choose to enter the Bulgarian market through an agent or distributor.
This is
because the small size of the Bulgarian market, distance and language
differences will make it unattractive to set up a branch or subsidiary
at the
outset. Even some well-known large American companies are currently
represented in Bulgaria by an agent for these reasons.”
See:
http://www.state.gov/www/about_state/business/com_guides/2000/europe/bulgaria_CCG2000.pdf
Romania: Not required.
“The Romanian market is open, requiring no special conditions for
access or operation.”
This according to:
http://www.tradeport.org/ts/countries/romania/regs.html.
As always I enjoyed answering your question, and if I left anything
unclear, please ask for a clarification.
Regards,
Colin |
Clarification of Answer by
colin-ga
on
08 Jun 2002 06:14 PDT
Hello Joel:
I am glad to clarify the question on the use of agents in Eastern
Europe. Here are the missing countries.
Albania Yes, unless licensed by the government
+++
http://www.state.gov/www/about_state/business/com_guides/2001/europe/albania_ccg2001.pdf
“CURRENTLY, THERE
ARE THREE BASIC CUSTOM RATES FOR IMPORTS DEPENDING ON PRODUCT
TYPE: 5 PERCENT, 10 PERCENT AND 18 PERCENT. THERE IS TALK OF
ESTABLISHING A REGIONAL FREE TRADE ZONE IN SOUTHEASTERN
EUROPE BUT NO SUCH ZONE CURRENTLY EXISTS.
46. IMPORT - EXPORT COMPANIES MUST HAVE A LICENSE TO OPERATE
BUT DO NOT NEED TO SPECIFY THE TYPE OF PRODUCTS THEY WILL
IMPORT/EXPORT IN THEIR LICENSE APPLICATION. MOST IMPORT - EXPORT
COMPANIES ARE FORMED AS SOLE PROPRIETORSHIPS. THERE ARE NO
PROHIBITED IMPORTS.”
Estonia: No
+++
http://www.state.gov/www/about_state/business/com_guides/2001/europe/estonia_ccg2001.pdf
“Distribution channels in Estonia are similar to the United States
market. Goods may be sold
through an agent, distributor, established wholesaler, or by selling
directly to retail organizations.
Privately-owned wholesale and trading houses are particularly strong
in certain specialized
sectors, such as electronics, electrical components and instruments,
pharmaceutical and health
care products, technical products and machinery, raw materials and
chemicals.”
Latvia: Yes
+++
http://www.state.gov/www/about_state/business/com_guides/2001/europe/latvia_ccg2001.pdf
“U.S. companies looking for agents or distributors in Latvia should
contact the nearest U.S.
Department of Commerce Export Assistance Center for Agent/Distributor
Service, Latvian
Development Agency for a list of Latvian importers or the Commercial
Office in the U.S. Embassy
in Riga.”
Lithuania: Recommended.
+++
http://www.state.gov/www/about_state/business/com_guides/2000/europe/lithuania_CCG2000.pdf
‘Advertising may be conducted freely in any printed or electronic
media. The leading newspapers in Lithuania are "Lietuvos Rytas",
"Respublika", "Lietuvos Aidas” published in Lithuanian and Russian.
The leading business newspapers are "Verslo Zinios" and “Baltic
Business News".
At present, there are no laws that regulate the relationship between
a foreign company and its distributors or agents in Lithuania. A
distributor relationship can be determined according to the
provisions of each specific distributor agreement.
’
Belarus
+++
http://www.firstgov.gov/fgsearch/resultstrack.jsp?sid=&url=http://www.state.gov/r/pa/ei/bgn/5371.htm
“As a matter of policy, the U.S. Government currently does not
encourage U.S. companies to invest in Belarus. Belarus' continuing
problems with an opaque, arbitrary legal system, a confiscatory tax
regime, cumbersome licensing system, price controls, and lack of an
independent judiciary create a business environment not conducive to
prosperous, profitable investment. In fact, several investors into
Belarus have left in recent years, including the Ford Motor Company.
The investment climate is exacerbated by the fact that the IMF and the
World Bank have had to cancel or suspend their programs of cooperation
with Belarus in recent years. ”
Kaliningrad : No, but recommended due to complexity of laws.
+++
http://www.firstgov.gov/fgsearch/resultstrack.jsp?sid=&url=http://www.state.gov/www/about_state/business/com_guides/2000/europe/russia00_06.html
“Import licenses are required for importation of various goods,
including ethyl alcohol and vodka, 14-, 21- and 25-inch color TVs,
combat and sporting weapons, self-defense articles, explosives,
military and ciphering equipment, radioactive materials and waste
including uranium, strong poisons and narcotics, and precious metals,
alloys and stones. Import licenses are issued by the Russian Ministry
of Trade or its regional branches, and controlled by the State Customs
Committee. Licenses for sporting weapons and self-defense articles are
issued by the Interior Ministry. ”
“Importers are required to complete a Russian customs freight
declaration for every item imported. Certificates of origin and
conformity (see "Product Standards" below) should also be presented at
customs. Exporters are required to complete an export declaration and,
if necessary, present the appropriate export license at customs. In
addition, currency control authorities require issuance of a
"passport" for both exports and imports to ensure that hard currency
earnings are remitted to Russia and transfers of hard currency
payments for imports are for goods actually received and properly
valued. ”
Ukraine : Highly recommended
+++
http://www.state.gov/www/about_state/business/com_guides/2001/europe/ukraine_ccg2001.pdf
“While the extent of information on Ukrainian companies has improved
slightly, there is still a
significant dearth of background data and credit histories on
potential Ukrainian distributors.
This presents the greatest obstacle to finding reliable, competent
distributors. In order to
obtain a due diligence report on a potential Ukrainian partner, a U.S.
company is advised to
contact either a law firm or use the services of the Dun&Bradstreet
representative in Ukraine:
”
“The Embassy strongly advises that all U.S. companies consider legal
counsel before and
while doing business in Ukraine. Given the tenuous commercial
environment and weak legal
infrastructure, it is essential to obtain solid legal advice in
structuring your company’s
investment.”
Moldova No.
+++
http://www.state.gov/www/about_state/business/com_guides/2001/europe/moldova_ccg2001.pdf
“Moldova is still in the process of implementing the principles of a
free market economy.
Although Moldova has achieved substantial progress on the road to
reforming the Sovietbased
command economy, it is faced with the arduous task of making the
existing
market-based institutions and laws more efficient. Moldova’s
commercial environment
is heavily affected by the country’s excessive foreign debt burden, a
struggling public
sector and a series of natural disasters which have severely damaged
the country’s crops.
Business in Moldova is undermined by a weak public sector, lack of a
coherent body of
commercial laws, and uncertainty surrounding the legal status of the
breakaway region of
Transnistria.
Moldovan business attitude toward the United States
Moldovan businesses view favorably their American counterparts, due to
the latter’s
rigorous business standards and access to cash. Moldovans are
generally willing to do
joint business projects with American firms. Also, Moldovans look at
the U.S. as a
source of technology and know-how and oftentimes are willing to offer
their own
technology solutions. No strong attachment toward locally produced
brands is evident,
except for a few traditional local products such as juices, wines, and
confectionery.
Moldovans feel no cold war era prejudices toward Americans.
”
Turkey Yes.
+++
http://www.state.gov/www/about_state/business/com_guides/2001/europe/turkey_ccg2001.pdf
“Unless a U.S. firm's interests are large enough to warrant opening an
office in the country,
the most effective means of selling in Turkey is through a reliable
and qualified local
representative. Personal contact is extremely important in Turkish
business in both private
and public sectors. When dealing with government tenders, an agent is
an absolute
necessity in view of complicated bureaucratic procedures and the
language barrier.”
Joel, I apologize for missing these eastern European countries, and
hope that this added information and links will help you in your
market research.
Sincerely,
Colin
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