Sales commissions paid to agent's range from 5 percent to 20 percent, depending on sales volume and the product price. Agency relationships can be terminated for inefficiency, misappropriation, or inability to fulfill contractual obligations. MacDonald's will be entering the local market towards the end of 1998. Direct Marketing Direct marketing usually takes place when a product is sold on a one-time or irregular basis. Companies with regional branches or representatives have successfully entered the market directly, but an agent is often crucial to penetrate the market.
Joint ventures are eligible for the same preferences and tax benefits as domestic companies.
Only a few foreign companies have licensed products or services to local companies. A foreign company must apply to register with the Registrar of Companies in order to establish an industry or a branch office in Sri Lanka. A foreign company may also establish a liaison office in Sri Lanka. In addition to the above certificates, the application for registration should include a written undertaking that the company will not engage in any export, import, trade or investment in Sri Lanka. A liaison office can engage in market promotion activities, extend technical support, and source raw materials and manufactured products.