Currency, payment terms, and invoicing across borders

Cross-border licensing involves decisions about which currency you pay in, when payments are due, and how invoices and statements are handled. Getting these right avoids delays, disputes, and unexpected costs from exchange rates or bank fees.

Currency. Contracts with Japanese licensors may be priced in Japanese yen or US dollars. If your sales are in another currency, exchange rate movements can change what your royalties cost. The contract should say which exchange rate applies and on what date, such as the rate on the last day of the reporting period.

Payment terms. Royalties are commonly reported and paid quarterly, often within a set number of days after each quarter ends (see 5.7). MG installments and advances have their own dates. Late payments may carry interest or trigger termination rights, so treat deadlines seriously.

Invoicing and bank transfers. International wire transfers can involve fees from both sending and receiving banks. Agree on who covers them, and confirm bank details directly with a known contact at the licensor before the first payment, since fraudulent payment requests do happen.

Taxes. Withholding tax may reduce the amount the licensor receives, and your contract should state whether payments are gross or net of withholding (see 7.5). Work with your accountant or tax advisor on the correct process and documents.