At present, with the development of the market economy, the buying, selling, and exchange of goods among countries are increasingly emphasized and encouraged. In such a context, international commercial representation is a common form of activity in international trade. So, what is international commercial representation? and How are its rights and obligations regulated? Let us explore these issues with NPLaw through the following contents.
At present, with the development of the market economy, the buying, selling, and exchange of goods among countries are increasingly emphasized and encouraged. In such a context, international commercial representation is a common form of activity in international trade. So, what is international commercial representation? and How are its rights and obligations regulated? Let us explore these issues with NPLaw through the following contents.
I. Overview of international commercial representation
1. What is international commercial representation? Forms of representation
International commercial representation is an agreement between the parties whereby the representative is authorized by the principal to conduct international commercial activities at the request of the principal and receives remuneration for providing such international commercial representation services. International commercial activities are understood as the exchange of goods and services (both tangible and intangible goods) between different countries.
Currently, the forms of representation recognized by law include:
- Representation by law: Legal representation is specifically stipulated in the enterprise registration certificate and the company’s charter. In such a case, the legal representative represents the organization in conducting international commercial activities for the purpose of generating profits for the company.
- Representation by authorization: In such a case, the principal may authorize the representative to perform international commercial activities. The commercial representation contract must be made in writing in accordance with legal regulations.
Thus, at present, there are two forms of representation for performing international commercial activities, namely representation by law and representation by authorization.
2. The role of an international commercial representative
An international commercial representative acts as an intermediary connecting enterprises with related parties and customers. The representative plays an important role in searching for customers, introducing and advising on the enterprise’s products and services to business partners. In addition, the international commercial representative represents the enterprise during negotiations for the conclusion of contracts.
Besides representing the enterprise in contract negotiations, the international commercial representative may also perform other roles such as product marketing, pricing, and related activities, with the aim of developing business operations and generating higher profits for the enterprise.
II. Legal regulations on international commercial representation
1. Rights and obligations of the international commercial representative
The rights and obligations of the international commercial representative are specifically regulated as follows:
An international commercial representative has the following obligations:
- To perform international commercial activities in the name and for the benefit of the principal;
- To notify the principal of opportunities and the results of performing authorized international commercial activities;
- To comply with the principal’s instructions, provided that such instructions do not violate legal regulations;
- Not to conduct international commercial activities in their own name or in the name of a third party within the scope of representation;
- Not to disclose or provide to others any secrets relating to the principal’s international commercial activities during the term of representation and for a period of two years from the termination of the representation contract;
- To preserve and safeguard assets and documents assigned for the performance of representation activities.
In addition to the above obligations, the international commercial representative is entitled to receive remuneration commensurate with the representation services provided.
2. Termination of international commercial representation
Under the law, the duration of international commercial representation is determined by agreement of the parties in the international commercial representation contract. Accordingly, upon expiration of the agreed term, the international commercial representation shall terminate.
In cases where the parties do not have an agreement on the duration, international commercial representation shall terminate when the principal notifies the representative of the termination of the international commercial representation contract, or when the representative notifies the principal of the termination of the contract.
3. Conditions for becoming the international commercial representative
To become the international commercial representative, the following conditions must be satisfied:
- Age requirement: The international commercial representative must be at least 18 years old and have full civil act capacity.
- The international commercial representative must not fall into prohibited categories for enterprise management and establishment, including:
+ Cadres, civil servants, and public employees.
+ Commissioned officers, non-commissioned officers, professional soldiers, defense workers, and defense officials in agencies and units of the Vietnam People’s Army; commissioned officers, non-commissioned officers, professional officers, and police workers in agencies and units of the Vietnam People’s Public Security, except for those appointed as authorized representatives to manage the State’s contributed capital in enterprises or to manage State-owned enterprises.
+ Managers and executive officers in State-owned enterprises as prescribed by law.
+ Persons who are being criminally prosecuted, held in custody, serving a prison sentence, subject to administrative handling measures at compulsory rehabilitation centers or compulsory education institutions, or who are prohibited by a court from holding certain positions, practicing certain professions, or performing certain jobs.
Accordingly, to become the international commercial representative, individuals must satisfy the conditions regarding age, civil act capacity, and must not fall within the cases prohibited by law.
III. Common questions regarding international commercial representation
NPLaw respectfully provides answers to several frequently asked questions related to international commercial representation as follows:
1. Is it necessary to extend the duration of international commercial representation?
The duration of international commercial representation is agreed upon by the parties in the contract.
Upon expiration of such duration, the contract shall terminate. In cases where the parties wish to continue the representation, they must extend the contract term in order to continue exercising their respective rights and obligations.
2. Is the international commercial representative liable for errors caused by themselves?
The international commercial representative performs international commercial activities in the name of the principal. Therefore, if errors occur during the execution of the international commercial representation contract due to the fault of the representative, the representative shall take responsibility for such errors.
IV. Legal consultancy and drafting services relating to international commercial representation
NGOC PHU LAW COMPANY LIMITED is an experienced firm in providing consultancy and drafting services relating to international commercial representation, with a service process including:
- Receiving information and documents relating to international commercial representation contracts.
- Guiding relevant parties in preparing dossiers and documents for negotiation, execution of contracts, and carrying out procedures related to international commercial representation contracts.
- Assisting clients in drafting international commercial representation contracts and working with competent state authorities.
- Advising on other matters related to international commercial representation.
The above are the contents that NPLaw wishes to share with clients regarding international commercial representation. Should clients have any questions concerning the above matters or other legal issues, please contact NPLaw for timely support. Sincerely thank you!
