Execution of the contract with foreign partners: peculiarities and innovations

An agreement on cooperation in any business relationship is based on contract conclusion by the parties. Most foreign companies involved in foreign economic activity face the need to conclude contracts with Russian partners. We would like to discuss some peculiarities and innovations in this area.

Preparing for a transaction with a foreign counterparty consists of the following steps:

  1. Pay attention to the differences in legislation and business practices.
  2. Search information about the counterparty, assess the credibility of the foreign enterprise.
  3. Be aware of government control of the transaction.
  4. Pay attention to the specifics of taxation.
  5. Clearly state the terms of the contract.

A contract with a foreign company must be drawn up in accordance with the laws of the countries to which the parties of the transaction belong. In addition, the norms of international law, which are applicable to the conditions of a particular contract and which the parties considered possible to apply, are taken into account.

Any contract with a foreign company belongs to the category of foreign economic transactions, so it is necessary to consider special rules for concluding such contracts.

It is important to note that provisions of the contract must be drawn up with the interests of both parties in two languages: Russian and the language of the partner’s country.

There are certain currency control rules that apply to foreign economic contracts in terms of settlements. It is worth especially considering cases in which there is a need to put a contract on record in the currency control. It is also necessary to provide how the contract and its execution will be reflected in the accounting data, how it will affect the taxation of the parties to the transaction and the preparation of financial statements.

It is advisable to carry out a legal review of the contract at the time of the transaction. This will help to identify risks and provide options for eliminating or minimising them.

One way to conclude a transaction is to exchange paper contracts with the signature of an authorised person and the seal of the organisation. Russian law also provides for the possibility of concluding contracts electronically.

In order for the transaction to be considered valid, the document must have certain attributes:

  • The form of the contract must comply with the law.
  • The content of the contract must comply with the law.
  • The signatory must have the confirmed right to conclude the transaction.

To give the contract legal force, the following conditions must be met:

  • The document must be drawn up in accordance with the format established by the state.
  • It must be handed over to the other party of the transaction in accordance with the established document transmission regulations.
  • It must be signed it with a qualified electronic signature.

Thus, a contract with a foreign or Russian partner can be concluded in paper or electronic form, always in compliance with the established rules and taking into account the laws and business practices of the counterparty country.

 

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