Includes typical use of agents and distributors and how to find a good partner, e.g., whether use of an agent or distributor is legally required.
  • Today’s modern communications technologies have eliminated numerous barriers, but many Danish companies still prefer to deal with an established local agent or distributor rather than buying directly from abroad.  In many cases, this is based on a preference for, or even a requirement to have, a responsible, legal entity in Denmark supplying the product.  The Danish agent/distributor community has developed over centuries and is today a select and competitive group of businesses.  Many sectors are dominated by a few powerful and quite conservative companies, which have spent decades establishing lasting relationships with their clients.  There is now some slow movement toward direct purchasing, especially from European suppliers.  This trend is especially evident in the food business, where the larger retail chains maintain in-house import divisions.  At the same time, there is an increasing trend for foreign companies to establish branch offices in Denmark.  In some cases, the competitive environment may even necessitate such a step.  When a U.S. company does not wish to establish its own sales office in Denmark, it is advisable to seek a local agent or distributor.
  • Companies wishing to use distribution, franchising, and agency arrangements need to ensure that the agreements they put into place are in accordance with EU laws and member state national laws. Council Directive 86/653/EEC establishes certain minimum standards of protection for self-employed commercial agents who sell or purchase goods on behalf of their principals.  The Directive establishes the rights and obligations of the principal and its agents, the agent’s remuneration, and the conclusion and termination of an agency contract.  It also establishes the notice to be given and indemnity or compensation to be paid to the agent. U.S. companies should be particularly aware that according to the Directive, parties may not derogate from certain requirements.  Accordingly, the inclusion of a clause specifying an alternate body of law to be applied in the event of a dispute will likely be ruled invalid by European courts.
  • The European Commission’s Directorate General for Competition enforces legislation concerned with the effects on competition in the internal market of "vertical agreements." U.S. small- and medium-sized companies (SMEs) are often exempt from these regulations because their agreements likely would qualify as "agreements of minor importance," meaning they are considered incapable of impacting competition at the EU level but useful for cooperation between SMEs.  Generally speaking, companies with fewer than 250 employees and an annual turnover of less than €50 million are considered small- and medium-sized. The EU has additionally indicated agreements that affect less than 10 percent of a particular market are generally exempt (Commission Notice 2014/C 291/01).
    • The EU also looks to combat payment delays.  Directive 2011/7/EU covers all commercial transactions within the EU, whether in the public or private sector, primarily dealing with the consequences of late payment. Transactions with consumers, however, do not fall within the scope of this Directive.  Directive 2011/7/EU entitles a seller who does not receive payment for goods and/or services within 30 days of the payment deadline to collect interest (at a rate of eight percent above the European Central Bank rate) as well as 40 Euro as compensation for recovery of costs.  For business-to-business transactions a 60-day period may be negotiated subject to conditions. The seller may also retain the title to goods until payment is completed and may claim full compensation for all recovery costs.
    • Companies’ agents and distributors can take advantage of the European Ombudsman when victim of inefficient management by an EU institution or body.  Complaints can be made to the European Ombudsman only by businesses and other bodies with registered offices in the EU.  The Ombudsman can act upon these complaints by investigating cases in which EU institutions fail to act in accordance with the law, fail to respect the principles of good administration, or violate fundamental rights.  In addition, SOLVIT, a network of national centers, offers online assistance to citizens and businesses who encounter problems with transactions within the borders of the single market.

    Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.