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Selling through resellers, distributors or sales representatives

Things to know

  • Resellers, distributors and sales representatives in Canada will insist that your products or services comply with local laws, including French language rules and packaging and labelling requirements
  • Relationships with resellers, distributors and sales representatives need to identify who will be responsible for importing commercial products into Canada and who will be responsible for related fees and taxes
  • An “accidental franchise” relationship with resellers, distributors or sales representatives can be created under provincial franchise legislation – laws in six provinces broadly define a “franchise” and can “catch” commercial relationships not typically thought of as a franchise
  • The structure of your relationship with a reseller, distributor or sales representative may impact your obligation to pay taxes or register your business in Canada

Things to do

  • Ensure that your products or services comply with local laws, including French language rules and packaging and labelling requirements
  • Ensure that your relationship with a reseller, distributor and sales representative does not create an “accidental franchise”, create a permanent establishment in Canada for tax purposes or otherwise result in unexpected obligations to pay taxes or register your business in Canada
  • Identify who will be the importer of record (e.g., the distributors, resellers or sales representative, or a licensed customs broker) and who will be responsible for related fees and taxes
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