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, exposing you to potentially significant liability
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

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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