Why International Influencer Agreements Are More Complex
As brands expand globally and audiences transcend borders, influencer partnerships increasingly involve parties in different countries. A US brand working with a UK influencer, or a European brand partnering with a creator in Southeast Asia, faces legal, financial, and regulatory considerations that domestic partnerships do not.
Cross-border influencer agreements must address varying legal systems, different advertising disclosure requirements, international tax obligations, currency considerations, and data privacy regulations. Failing to address these complexities can expose both parties to regulatory penalties, tax liabilities, and unenforceable contract terms.
Jurisdiction and Governing Law
Choosing the Governing Law
Every contract needs a governing law clause that specifies which country's or state's laws apply to the agreement. In cross-border partnerships, this is particularly important because different legal systems treat contracts, intellectual property, and consumer protection differently.
Common approaches:
- Brand's jurisdiction: The laws of the brand's home country or state govern the agreement. This gives the brand the advantage of familiarity.
- Influencer's jurisdiction: The laws of the influencer's country apply. This may be necessary when the influencer is in a country with mandatory consumer protection laws that cannot be contracted away.
- Neutral jurisdiction: The parties agree on the laws of a neutral country or state that neither party is based in.
Dispute Resolution Location
Specify where any legal proceedings will take place. For international disputes, consider:
- International arbitration: Organizations like the International Chamber of Commerce (ICC) or the London Court of International Arbitration (LCIA) offer international arbitration services.
- Online dispute resolution: For lower-value disputes, online arbitration or mediation may be more practical than requiring either party to travel internationally.
The choice of governing law and dispute resolution forum can significantly affect the cost and outcome of any disputes. Choose a jurisdiction that both parties find accessible and whose legal system is well-suited to commercial contract disputes.
International Tax Considerations
Withholding Tax
When a brand in one country pays an influencer in another, withholding tax may apply. The paying party may be required to withhold a percentage of the payment and remit it to the tax authorities.
Your agreement should address:
- Whether payments are subject to withholding tax
- Which party bears the economic burden of the withholding
- Whether the influencer will provide the documentation needed to reduce or eliminate withholding under an applicable tax treaty
VAT and Sales Tax
Value-added tax (VAT) applies to services in many countries. When an influencer provides services across borders, questions arise about which country's VAT applies and who is responsible for payment.
Address in your agreement:
- Whether the influencer's fees are inclusive or exclusive of VAT
- Which party is responsible for determining and paying applicable VAT
- Requirements for proper invoicing, including VAT identification numbers
Tax Documentation
International payments often require specific tax documentation:
- US brands: May need a W-8BEN or W-8BEN-E from foreign influencers to apply reduced withholding rates under tax treaties.
- EU brands: May require VAT registration numbers and confirmation of the influencer's tax status.
- Multiple jurisdictions: If the influencer creates content that is distributed in multiple countries, tax obligations may arise in each jurisdiction.
Advertising Disclosure Requirements by Region
Beyond the FTC
While the FTC sets disclosure standards for the United States, other countries have their own advertising regulations that may apply when content reaches their audiences.
United Kingdom: The Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA) enforce disclosure requirements that are broadly similar to the FTC but with specific UK terminology and enforcement mechanisms.
European Union: The EU's Unfair Commercial Practices Directive provides a framework, but individual member states implement their own specific rules. Germany, France, and Italy, for example, have distinct disclosure requirements.
Canada: The Competition Bureau and Ad Standards Canada enforce influencer disclosure rules that align broadly with FTC guidelines but have specific Canadian requirements.
Australia: The Australian Association of National Advertisers (AANA) has guidelines for influencer marketing that require clear and prominent disclosure.
Agreement Provisions
Your agreement should require the influencer to comply with the advertising disclosure requirements of all jurisdictions where the content is accessible. This may mean different disclosure language for different markets or ensuring that the disclosure is compliant with the strictest applicable standard.
When working with international influencers, provide a disclosure guide that covers the requirements of the markets where the content will be promoted. Include specific language examples for each market to make compliance straightforward.
Data Privacy and GDPR
GDPR Compliance
If either party is located in the European Union or European Economic Area, or if the campaign targets EU audiences, the General Data Protection Regulation (GDPR) likely applies. Key considerations include:
- Data sharing: If the brand shares customer data, audience data, or analytics with the influencer (or vice versa), a data processing agreement may be required.
- Tracking and cookies: Campaign tracking methods (pixels, cookies, UTM parameters) must comply with GDPR consent requirements.
- Audience data: If the influencer shares audience demographics or analytics with the brand, this data may include personal information subject to GDPR.
Other Privacy Regulations
Beyond GDPR, other privacy regulations may apply:
- CCPA/CPRA: California's privacy laws apply to certain businesses that process California residents' data.
- LGPD: Brazil's data protection law, similar in scope to GDPR.
- PIPA: South Korea's Personal Information Protection Act.
Your agreement should include a mutual obligation to comply with all applicable data protection laws and a commitment to cooperate in addressing data protection obligations.
Currency and Payment Considerations
Currency Specification
Specify the currency for all payments. Options include:
- Brand's local currency: Simpler for the brand but exposes the influencer to exchange rate risk.
- Influencer's local currency: Simpler for the influencer but the brand bears exchange rate risk.
- USD or EUR: Using a widely traded currency provides stability for both parties.
Exchange Rate Risk
For agreements spanning multiple months, exchange rates can fluctuate significantly. Address who bears this risk:
- Fixed rate locked at the time of signing
- Market rate at the time of each payment
- A shared risk mechanism (such as a currency collar that sets upper and lower bounds)
International Payment Fees
Cross-border payments often involve wire transfer fees, correspondent bank charges, and currency conversion fees. Specify who bears these costs and consider using international payment platforms that offer competitive rates.
Intellectual Property Across Borders
Copyright Varies by Country
Copyright terms and protections differ between countries. A work that enters the public domain in one country may still be protected in another. Your IP clause should specify which country's copyright law governs the content ownership and licensing terms.
Trademark Considerations
If the influencer uses the brand's trademarks in their content, consider whether those trademarks are registered in the influencer's country. Unauthorized use of an unregistered trademark may not have the same legal protections as use of a registered mark.
Practical Tips for International Agreements
Language
If the parties speak different languages, specify which language version of the agreement is controlling. It is common to have the agreement in English with a translation for the influencer's reference, with the English version prevailing in case of discrepancy.
Communication Across Time Zones
Include practical provisions for communication, including expected response times that account for time zone differences and preferred communication channels.
Local Legal Compliance
Include a mutual representation that each party will comply with all applicable laws in their respective jurisdictions. This catch-all provision supplements the specific compliance requirements addressed elsewhere in the agreement.
International influencer partnerships offer brands access to global audiences through trusted local creators. A well-structured cross-border agreement addresses the unique complexities of these partnerships, enabling both parties to collaborate with confidence across borders.