Distribution of goods sold by a foreign company in France
A foreign company setting up a sales force in France for marketing purposes is linked with its French trade subsidiary by one of the following agreements:
1) Purchase / resale agreement The French entity buys goods from its parent company and resells them in France.
2) Commissionaire agreement /undisclosed agent The French entity, acting in its own name but on the parent company’s behalf, does not own the goods sold to the French customers who are unaware of the foreign parent company. Sales invoices are printed on the French entity’s headed paper.
3) Agentagreement / disclosed agent The French entity is an authorized agent, concluding sales agreements with French customers in the name and on behalf of the foreign parent company. Contrary to the commissionaire, the authorized agent does not act in his own name and customers are aware that the contracting party is the foreign parent company via its French authorized agent. Invoices are printed on the parent company’s headed paper.
4) Marketing support agreement The French entity acts as an intermediary, putting customers and the foreign parent company in touch. The latter is the direct contracting party. Unlike the sales agent, the marketing support structure has no power of attorney and is not authorized to sign official documents (purchase orders, sales agreements) that would be binding for the parent company. The French entity’s compensation shall be described in the above agreements, and shall depend on the nature of activity and on the risk incurred by the French entity. According to the type of agreement and the type of goods sold in France, French VAT will be applicable (or not) to the French entity’s income billed to the parent company.
