In the business of importing goods on an agency basis, there are usually two common situations. If the principal and the agent clearly stipulate in the agency agreement that the principal shall directly make the remittance payment to foreign parties, then the principal shall pay the relevant amounts such as the purchase price to the overseas suppliers through its own account according to the agreement and the progress of the import business. In this case, the principal has direct control over the flow of funds.
On the other hand, if it is stipulated that the agent shall make the remittance payment, the agent will make the remittance payment to overseas parties from its own account according to the instructions of the principal. When the agent makes the remittance payment, the funds actually come from the principal, and the principal shall pay the amount to the agent in advance.
Special circumstances such as in tripartite trade may involve more complicated arrangements, which need to be clearly defined by all parties in the contract in advance. It should be noted that no matter which party makes the remittance payment, it must ensure that the foreign exchange payment complies with the regulations of the state foreign exchange administration. At the same time, the rights and obligations of both parties should be clearly defined in the contract to avoid disputes.
Professional consultant answers
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
In the business of importing goods on an agency basis, there are usually two common situations. If the principal and the agent clearly stipulate in the agency agreement that the principal shall directly make the remittance payment to foreign parties, then the principal shall pay the relevant amounts such as the purchase price to the overseas suppliers through its own account according to the agreement and the progress of the import business. In this case, the principal has direct control over the flow of funds.
On the other hand, if it is stipulated that the agent shall make the remittance payment, the agent will make the remittance payment to overseas parties from its own account according to the instructions of the principal. When the agent makes the remittance payment, the funds actually come from the principal, and the principal shall pay the amount to the agent in advance.
Special circumstances such as in tripartite trade may involve more complicated arrangements, which need to be clearly defined by all parties in the contract in advance. It should be noted that no matter which party makes the remittance payment, it must ensure that the foreign exchange payment complies with the regulations of the state foreign exchange administration. At the same time, the rights and obligations of both parties should be clearly defined in the contract to avoid disputes.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
Usually, it is carried out according to the agency import contract signed by both parties. Execute it as the contract stipulates. If it is not clearly written, both parties should quickly negotiate and determine it, otherwise it will be easy to have disputes later.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Generally speaking, whoever signs the purchase contract with the overseas supplier is more likely to make the remittance payment. But it is not absolute. Everything is subject to the agency import agreement.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
If the principal has convenient capital turnover and is familiar with the import process, directly making the remittance payment can better control the funds. If the agent makes the remittance payment, the principal should pay attention to remitting the money to the agent in a timely manner so as not to delay the remittance payment.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
In practice, considering the risks and the convenience of operation, sometimes the agent makes the remittance payment more often because the agent is more familiar with the process of foreign trade remittance payment and can handle relevant matters better.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
No matter who makes the remittance payment, good capital supervision should be done, and the remittance payment vouchers and related documents should be retained for the convenience of subsequent verification and financial treatment.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
If the imported goods involve special regulatory policies, the remittance payment operation may need to meet specific requirements, and both parties should understand them clearly in advance.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
From a tax perspective, different remittance payment entities may have an impact on tax matters such as invoice issuance, which also needs to be considered when determining the remittance payment entity.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
Sometimes, to protect the interests of both parties, a third-party will be introduced to supervise the funds, and the remittance payment will be made after the processes such as goods inspection and acceptance are completed.