Anyone can go to a country like Brazil and try to set up business operations and sales channels, but to truly make the most out of Brazilian business opportunities, it is best to hire the services of a “Despachante”. Despachante is a word derived from efficient in the Portuguese language, but it normally translates to business or customs agent. This person has many industry and government connections. Without this person’s help all business tasks can slow down to a glacial pace. This role may have different names in various countries and languages, but in Africa, Latin America, Asia and parts of Europe, a local business agent can help make your business interactions with government agencies and other vital business transactions run more smoothly.
Before Americans go running for the hills in fear of being arrested for corruption under the U.S. Foreign Corrupt Practices Act, much of what a business agent does is legal. They know how business is done, which lines to stand in, what permits are needed, which lawyers are honest, etc. Here are tips for working with an in-country business agent:
Hire Only Intermediary Agents that Come Recommended from Trusted Sources
This is important. Be wary of business agents approaching your company at trade shows and through direct mailing/calling campaigns. While there may be reputable agents in the mix, you can just as easily put your trust in the wrong agent who could actually be working directly against your interests.
Instead, contact your country’s consulate for referrals for that market or else the local chamber of commerce. Check more than one source to validate the reputation of a particular business agent BEFORE starting to work with them in the new market.
Keep Clear Accounting Records for Transparency
In countries like Brazil and China, the business agent may operate in a “gray” set of business practices where government officials and key business contacts expect to be bribed for expediting your company’s paperwork, bank transaction, etc. If you are American or any other nationality that has strict anti-corruption laws, your company cannot directly OR indirectly bribe officials in any country. The best way to make sure that your in-country business agent does not act in a way that could leave you vulnerable to criminal or civil indictments is to require full transparency of how your fees are spent. It may be difficult to get this information from your business agent, but you will sleep easier at night.
Keep in Regular Contact
While working with a business agent, it helps to keep regular contact. Some companies make the mistake of signing an agreement and then rarely reaching out to follow up on tasks that the business agent should accomplish. Regular contact helps keep a business agent focused on moving your business interests forward and brings process and information bottlenecks to your attention sooner for resolution.
Provide Enough Product and Company Information to Understand Your Business
A business agent might not have extensive industry experience and so may not be well-versed in what you sell. Be sure to provide product and company information, preferably in the agent’s language, in order to avoid misunderstandings. This information should include how your product works, who it is normally sold to, company history and key company policies (ex. Anti-corruption). Do not be surprised if this material is not initially read, but refer back to it as a resource for your business agent if you hear discrepancies between what the agent has said compared with the written information.
If you would like more information about setting up and managing business agents abroad, please contact me. I wish you the best of success in all of your international business dealings!