Agency Agreement in Russia: All You Need to Know

An agency agreement, also known as an agent agreement, is a legally binding document that defines the relationship between an agent and a principal. It outlines the terms and conditions of the agreement and the responsibilities of both parties. In Russia, agency agreements regulate the relationship between a foreign company and a local agent.

Foreign companies that want to do business in Russia often choose to partner with a local agent or distributor to gain access to the Russian market. This is because a local agent has a better understanding of the market, including its laws and regulations, and can provide valuable assistance in navigating the complexities of doing business in Russia.

An agency agreement in Russia must comply with the regulations set forth in the Russian Civil Code and the Federal Law on Commercial Representation. In addition to these laws, the Russian Federal Antimonopoly Service (FAS) also regulates agency agreements in Russia and requires companies to register their agreements with the FAS.

The most important provisions of an agency agreement in Russia include:

1. Duration of the Agreement: An agency agreement can be either fixed-term or indefinite. Fixed-term agreements are for a specific period of time, while indefinite agreements do not have a specific end date.

2. Territory: The agency agreement must specify the geography of the agency`s activity. This can be a specific city, region, or the entire country.

3. Scope of Work: The agreement must outline the specific tasks and responsibilities of the agent. This can include marketing and sales, distribution, after-sales support, and other services.

4. Payment: The payment terms and commission rates must be clearly defined in the agreement.

5. Exclusivity: An agency agreement can be either exclusive or non-exclusive. An exclusive agreement means that the agent has the exclusive right to market and sell the principal`s products or services in the specified territory.

6. Termination: The agreement must specify the conditions for termination, including notice period and the reasons for termination.

In conclusion, an agency agreement in Russia is a crucial tool for foreign companies looking to do business in the Russian market. It is important to ensure that the agreement complies with the Russian Civil Code, the Federal Law on Commercial Representation, and the regulations set forth by the Russian Federal Antimonopoly Service. By having a well-drafted agency agreement in place, both the principal and the agent can protect their interests and ensure a successful business relationship.