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.
Last Published: 2/13/2019

The key to success in the Maltese market is having an experienced agent or joint venture partner in Malta with suitable experience and an extensive sales network.  Providing after-sales support and spare parts to the consumer is also crucial. 
As the government accounts for a sizeable share of major purchases, it is essential that local agents or joint venture partners have the knowledge and experience to participate in government tenders.  For the next two years (2018-2020), Malta will benefit from funding under European Structural and Investments Funds, covering the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF), the European Agricultural Fund for Rural Development (EAFRD), and the European Maritime and Fisheries Fund (EMFF).  These funds provide up to €1.1 billion in support for major projects, such as infrastructural development.

Before making an agreement with prospective agents or joint venture partners, we advise U.S. firms to obtain background information and credit reports about prospective partners.

Companies wishing to use distribution, franchising, and agency arrangements must ensure that agreements they enter are consistent with EU and Member State national laws.  Council Directive 86/653/EEC establishes minimum standards of protection for self-employed commercial agents selling or purchasing 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 required notice and indemnity or compensation paid to the agent in the event of a dispute.  U.S. companies should not deviate from these requirements because European courts could invalid any clause specifying the application of an alternate body of law in the event of a dispute.

The European Commission’s Directorate General for Competition enforces legislation concerned with the effects of vertical agreements on competition in the internal market. U.S. small- and medium-sized companies (SMEs) generally are exempt from these regulations because their agreements are considered “agreements of minor importance,” meaning they are incapable of impacting competition at the EU level.  The EU also considers companies with fewer than 250 employees and annual revenue of less than €50 million as small- or medium-sized and generally exempts agreements affecting less than ten percent of a particular market (Commission Notice 2014/C 291/01).

Directive 2011/7/EU addresses late payments for commercial transactions within the EU.  The directive gives a seller, who does not receive payment for goods and/or services within 30 days of the payment deadline, the right to collect interest (at a rate of eight percent above the European Central Bank rate) and €40 as compensation for recovery of costs.  For business-to-business transactions, parties may negotiate a 60-day period subject to conditions.  The seller also may retain the title to goods until the purchaser makes full payment and may claim full compensation for all recovery costs. Transactions with consumers, however, do not fall within the scope of the directive. 

Companies’ agents and distributors can take advantage of the European Ombudsman when they become victims of inefficient management by an EU institution or body.  Businesses can lodge complaints with the European Ombudsman only if they have 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.