We signed a contract with a Malaysian company through the contact and assistance of an overseas Chinese company. The buyer paid the goods directly to my company, but we need to pay some commission to the middleman that provides help. Is this practice in line with relevant national regulations? How should I do this?
According to some current national regulations, it is reasonable and legal to pay commissions to middlemen. In general, a single commission payment of no more than $100000 or its ratio of less than 10% can be paid smoothly.
The procedure for paying commission is not complicated either. After receiving the payment of the main contract, you provide the bank with the commission agreement signed with the middlemen, the commission invoice, the invoice at the time of export, the original trade contract, etc., and let the bank arrange to pay. You can consult the bank clerks, and they are more clear about the process.
After paying the commission, the commission agreement, invoice and so on should be properly preserved. The procedures for the internal approval of the commission contract and the approval of the commission payment shall be complete, to avoid unclearness in the future audit.
You should pay the commission to middlemen after the execution of the contract and the collection of all foreign exchange. Sometimes, some merchants claim to know a president or a governor and have a photo with them. And then, they tell you that there is a government project, but you must first pay a commission to introduce business to you. Such people are unreliable and do not cooperate with them.
Some middlemen prefer to have the seller pay commissions when he receives every advance payment. I don’t agree with this, because some agents don’t care about other things after collecting money. The seller still insists on paying after the execution of the contract. This is less risky. Of course, the commission promised to the middlemen should be timely.
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