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A Referral Agreement sets out the terms when one party (the referrer) introduces potential clients or business opportunities to another party in exchange for compensation. In Hong Kong's competitive business landscape, these agreements help protect both sides by clearly outlining referral fees, performance expectations, and confidentiality requirements.

Common in financial services, real estate, and professional consulting, these agreements must comply with Hong Kong's anti-bribery laws and sector-specific regulations. They typically specify payment structures (flat fees or commissions), outline quality standards for referrals, and include provisions for handling disputes under Hong Kong law. Good agreements also address data privacy concerns, especially when sharing client information.

Use a Referral Agreement when your business starts working with partners who will send potential clients your way. This becomes essential in Hong Kong's finance, real estate, and professional services sectors where referral networks drive significant business growth. It's particularly important when the referral fees represent substantial value or when you're handling sensitive client information.

Getting these agreements in place becomes urgent before starting any referral relationship that involves commission structures, performance targets, or client data sharing. Hong Kong's strict regulatory environment around financial incentives and data privacy makes proper documentation vital. Having clear terms prevents misunderstandings about payment timing, referral quality standards, and confidentiality obligations.

• Referral Compensation Agreement: Focuses specifically on payment structures and performance metrics, ideal for professional services firms using tiered commission rates.
• Referral Agreement And Commission Agreement: Combines referral terms with detailed commission calculations, commonly used in financial services and real estate sectors.
• Agent Referral Agreement: Tailored for independent agents or brokers, with emphasis on territory restrictions and exclusivity rights under Hong Kong regulations.

• Business Owners and Entrepreneurs: Create and manage referral networks to expand their client base, particularly in professional services and consulting.
• Financial Advisors and Brokers: Use these agreements to formalize client introductions and commission structures within Hong Kong's regulatory framework.
• Real Estate Agents: Establish referral partnerships with property developers, banks, and other agents under SFC and EAA guidelines.
• Legal Professionals: Draft and review agreements to ensure compliance with Hong Kong law and protect client interests.
• Compliance Officers: Monitor referral arrangements to maintain regulatory compliance and prevent conflicts of interest.

• Basic Details: Gather full legal names, business registration numbers, and contact information for all parties involved in the referral arrangement.
• Compensation Structure: Define exact payment terms, commission rates, and payment schedules that comply with Hong Kong regulations.
• Referral Process: Document the specific steps for making and tracking referrals, including how leads will be qualified and communicated.
• Performance Metrics: Establish clear success criteria and reporting requirements for referral quality.
• Data Protection: Outline how client information will be handled to comply with Hong Kong's PDPO requirements.
• Term and Termination: Decide on agreement duration and conditions for ending the relationship.

• Party Details: Full legal names, business registration numbers, and registered addresses of referrer and recipient.
• Scope of Services: Clear description of referral activities, territories covered, and any exclusivity provisions.
• Compensation Terms: Detailed commission structures, payment schedules, and conditions for earning referral fees.
• Data Protection: PDPO-compliant procedures for handling client information and maintaining confidentiality.
• Performance Standards: Quality metrics for referrals and reporting requirements.
• Governing Law: Explicit statement placing the agreement under Hong Kong jurisdiction.
• Termination Rights: Conditions and procedures for ending the agreement.

A Referral Agreement differs significantly from an Agency Agreement in several key aspects, though both involve business relationships and client interactions. Here's how to distinguish between them in Hong Kong's legal context:

• Scope of Authority: Referral Agreements only permit introducing potential clients, while Agency Agreements grant broader powers to negotiate and act on behalf of the principal.
• Legal Liability: Under a Referral Agreement, the referrer has limited liability once the introduction is made. Agency Agreements create ongoing obligations and potential liability for the agent's actions.
• Compensation Structure: Referral fees are typically one-time payments for successful introductions. Agency agreements often involve regular commissions or ongoing fee structures.
• Regulatory Requirements: Agency Agreements face stricter regulatory oversight in Hong Kong, especially in financial services and real estate, requiring specific licenses and compliance measures.