Which payment terms and Incoterms are normal with a European manufacturer?
No source NordSourced checked says what is normal; your contract decides. Two rules frame it. Incoterms 2020, in force since 1 January 2020, gives eleven three-letter delivery rules, from EXW to DDP. Directive 2011/7/EU says a payment period agreed between businesses should not exceed 60 calendar days unless expressly agreed, with interest and EUR 40 per late invoice.
What are Incoterms, and which edition applies?
Incoterms are the International Chamber of Commerce's trade terms for delivery. ICC calls them "a set of eleven three-letter trade terms", and the current edition, Incoterms 2020, "entered into force on 1 January 2020". Each rule says where the seller delivers the goods and when the risk passes to the buyer.
The eleven rules fall into two groups (ICC Digital Library). Seven can be used with any mode of transport; four are for sea transport, which ICC Academy calls maritime only. Goods sent by road can use only the first group, because the other four are for transport by sea.
| Group | Rules |
|---|---|
| Any mode or modes of transport | EXW Ex Works; FCA Free Carrier; CPT Carriage Paid To; CIP Carriage and Insurance Paid To; DAP Delivered at Place; DPU Delivered at Place Unloaded; DDP Delivered Duty Paid |
| Sea transport (maritime only) | FAS Free Alongside Ship; FOB Free On Board; CFR Cost and Freight; CIF Cost Insurance and Freight |
A new edition is only being prepared. ICC's 2026 workplan says its commercial law commission will "begin work on the revision of the Incoterms® rules, laying the groundwork for Incoterms® 2030." NordSourced found no draft or publication date on 13 October 2026, so contracts signed now name Incoterms 2020.
What do EXW, FCA, DAP and DDP mean for a private label order?
They move the point where the seller's job ends, from the factory gate to your door with duty paid. ICC Academy warns that "EXW is suitable for domestic transport and may cause seller or buyer problems if goods are intended to be exported", and prefers FCA for exports. DAP and DDP differ in who clears the goods for import.
| Rule | Where the seller delivers, and the risk passes to the buyer | What ICC Academy adds |
|---|---|---|
| EXW Ex Works | At the named place, which may be the seller's premises, at the buyer's disposal and not loaded on any collecting vehicle | Suitable for domestic transport; may cause problems if the goods are to be exported |
| FCA Free Carrier | At the seller's premises: when the goods are loaded on the buyer's transport. At another named place: when the goods, on the seller's transport, are ready for unloading | Preferred to EXW when the goods are exported |
| DAP Delivered at Place | At the named place of destination, when the goods are at the buyer's disposal; the seller does not unload | The buyer carries out and pays for import clearance, and bears all risks of loss or damage during it |
| DDP Delivered Duty Paid | At the buyer's named place, when the goods are at the buyer's disposal | The seller clears the goods for import; the buyer pays a higher price that covers tariffs, taxes, permits and licences |
The price of EXW: ICC Academy warns it may cause problems when the goods leave the seller's country. The price of FCA: once the goods are loaded on your transport, or ready for unloading at the named place, the risk is yours. The price of DAP: you clear and pay for import, and carry the risk while you do. The price of DDP: a higher price, and a seller that must handle your country's import process.
ICC adds one more line for the delivered rules: "under DAP the seller does not unload the goods, under DPU, the seller does unload the goods."
Which rule does your situation decide for you?
Who imports and who arranges transport decide the rule. ICC Academy recommends DAP where local rules require the importer to clear the goods, and notes that under DDP "the seller is ultimately responsible for the import clearance process and any associated challenges". Whether you have your own forwarder decides the rest.
- You have a forwarder and want to control transport: FCA at the factory, so delivery happens when the goods are loaded on your forwarder's vehicle.
- You want the goods brought to your warehouse and will import them yourself: DAP to your warehouse, with import clearance on your side.
- You want a delivered price with duty included, and the manufacturer agrees to import into your country: DDP, with the import process on the manufacturer's side.
- You collect inside the manufacturer's own country and do not export: EXW, the rule ICC Academy calls suitable for domestic transport.
Write the rule, the named place and the edition together in the quotation and the contract, for example DAP followed by your warehouse address and Incoterms 2020. A rule without a place does not say where delivery happens. Buying across an EU border also raises value added tax (VAT) questions; see customs and VAT within the EU.
How long can a payment period between businesses be under EU law?
Up to 60 calendar days, unless the contract expressly agrees otherwise. Directive 2011/7/EU, Article 3(5) requires member states to ensure that "the period for payment fixed in the contract does not exceed 60 calendar days", with an exception for an express agreement that is not grossly unfair to the creditor.
The 60 days is a ceiling, so a manufacturer may ask for part of the price before production and a buyer may agree. The EU IP Helpdesk notes that "national legislations usually contain limitations to the freedom of the parties", and that in some countries the term is 30 days from receipt of the invoice.
No source NordSourced opened says which payment terms are usual between private label manufacturers and brands: deposits, payment before dispatch or credit after delivery. Ask each manufacturer for its terms in the quotation and compare them like prices.
What happens if a payment is late?
Interest and a fixed fee. Directive 2011/7/EU sets statutory interest at "a rate which is equal to the sum of the reference rate and at least eight percentage points" (Article 2(6)) and gives the creditor "a fixed sum of EUR 40" for recovery costs (Article 6(1)). The Commission's Your Europe page lists each country's rate.
| Country | Rate |
|---|---|
| Latvia | 10.40 |
| Lithuania | 10.15 |
| Estonia | 10.40 |
| Finland | 10.50 |
| Sweden | 10.00 |
Your Europe adds: "The interest is due from the day following the due date fixed in the contract." If no payment period was set, interest starts 30 calendar days after the client receives the invoice, and it is calculated on the amount including VAT. The EUR 40 is a flat fee per late-paid invoice; some countries set higher amounts based on invoice value.
Will the EU replace the 60-day rule?
Not yet. The Commission proposed a Late Payment Regulation, COM(2023)0533, on 12 September 2023. Parliament adopted its first-reading position on 23 April 2024, and the Legislative Observatory still shows "Awaiting Council's 1st reading position". Until a Regulation is adopted, Directive 2011/7/EU and its 60-day rule stay in force.
Member states are split. In comments dated 30 October 2025, Austria wrote that "AT does not consider that continuing work on a text proposal would lead to a successful outcome", Belgium called for a recast of the directive, Finland did not favour continuing on the compromise text, and France recorded that the Commission had planned a 30-day maximum and asked to keep 60 days.
What should the quotation and the contract say about payment and delivery?
Five things, in writing: the Incoterms rule with its place and edition, the payment period and the event it runs from, any deposit, the interest on overdue amounts, and who insures the goods in transit. The EU IP Helpdesk writes that "it is common practice to include any agreed rate of interest payable on overdue amounts".
- Delivery: the rule, the named place and Incoterms 2020.
- Payment period: the number of days, and whether they run from the invoice, from delivery or from acceptance of the goods.
- Deposit and balance: how much is paid before production and how much after delivery.
- Interest on overdue amounts: without an agreed rate, the statutory rate applies.
- Insurance: under CIP the seller must insure to Institute Cargo Clauses (A) or similar cover; under CIF the default remains Institute Cargo Clauses (C).
- Currency, and who pays the bank charges.
NordSourced records the minimum orders (49 of 443 manufacturers publish one) and lead times (51) that manufacturers publish, not their payment terms. A model to start from is ICC's Model International Sale Contract (2024, 828E) in its list of model contracts; ICC's store prices each model at EUR 49. The manufacturing agreement guide covers the other clauses.
Questions and answers
What does EXW mean when a manufacturer quotes it?
Ex Works: delivery and the transfer of risk happen when the seller places the goods at your disposal at the named place, not loaded on any collecting vehicle. The place may be the seller's premises. ICC Academy says EXW suits domestic transport and may cause problems if the goods are meant for export, and it prefers FCA for exports.
When does the risk pass to me under FCA?
ICC Academy gives two cases. If the named place is the seller's premises, delivery happens when the goods are loaded on your means of transport. If the named place is elsewhere, delivery happens when the goods, still on the seller's vehicle, are ready for unloading. From that moment the risk of loss or damage is yours.
What is the difference between DAP and DDP?
Import clearance. ICC Academy says that under DAP the buyer is responsible for carrying out and paying for import clearance, while under DDP the seller assumes that responsibility. Under DDP the buyer pays a higher price that covers tariffs, taxes, permits and licences. ICC recommends DAP where local rules require the importer to clear the goods.
Does the seller unload the goods under DAP?
No. ICC says that under DAP the seller does not unload the goods, while under DPU, Delivered at Place Unloaded, it does. DPU replaced the former Delivered at Terminal (DAT) rule in Incoterms 2020. If unloading at your warehouse needs equipment or people, agree who provides them before you choose between the two rules.
Is Incoterms 2030 out yet?
No. ICC's 2026 Global Policy Commissions workplan says its commercial law commission will begin work on the revision of the Incoterms rules, laying the groundwork for Incoterms 2030. NordSourced found no draft and no publication date on 13 October 2026. Incoterms 2020, in force since 1 January 2020, remains the current edition.
Can a contract give me more than 60 days to pay?
Only if the contract expressly agrees it and the term is not grossly unfair to the creditor. Directive 2011/7/EU, Article 3(5), otherwise caps the contractual payment period between businesses at 60 calendar days. National laws can be stricter: the EU IP Helpdesk notes that in some countries the term is 30 days from receipt of the invoice.
What interest can a manufacturer charge if I pay late?
Without an agreed rate, the statutory rate: the reference rate plus at least eight percentage points, under Directive 2011/7/EU. For 1 July to 31 December 2026 the European Commission lists 10.40 for Latvia and Estonia, 10.15 for Lithuania, 10.50 for Finland and 10.00 for Sweden. Interest runs on the amount including VAT.
Is there a fixed fee for late payment on top of interest?
Yes. Article 6(1) of Directive 2011/7/EU gives the creditor a fixed sum of EUR 40 for recovery costs, and the Commission's Your Europe page describes it as a flat fee per late-paid invoice. Some countries set higher amounts based on invoice value, and reasonable recovery costs above the flat fee can also be claimed.
When does late-payment interest start if the contract sets no date?
Thirty calendar days after you receive the invoice or payment request, according to the Commission's Your Europe page. If the date of receipt is unknown, the 30 days run from delivery, and if the invoice arrived before the goods, from delivery too. Where the contract sets a due date, interest is due from the following day.
Will the EU cap business payment terms at 30 days?
Not yet. The Commission proposed a Late Payment Regulation on 12 September 2023; France's comments record that the Commission had planned a 30-day maximum. Parliament adopted its position on 23 April 2024, and the Legislative Observatory still shows the file awaiting the Council's first-reading position. In October 2025 Austria doubted the file could succeed and Belgium asked for a recast.
What payment terms do private label manufacturers in the Baltics ask for?
No source NordSourced opened answers that. NordSourced records the terms manufacturers publish: 49 of 443 publish a minimum order and 51 a lead time. None of the 443 mention payment terms in the sentences NordSourced quotes from their websites, so ask each manufacturer for its terms in writing.
Do manufacturers in Northern Europe quote EXW or DAP on their websites?
None of the 443 manufacturers listed on NordSourced name an Incoterms rule in the sentences NordSourced quotes from their websites. Ask for the rule, the named place and the edition in each quotation, and compare quotations on the same rule.
Does the late payment directive apply when I buy as a business?
Yes. The Commission's Your Europe page says the rules cover businesses, including sole traders acting professionally, and public authorities, but not consumers. A brand that buys from a manufacturer is a business, so the 60-day ceiling on agreed payment periods, the statutory interest and the EUR 40 flat fee apply to its invoices.
Where to go next
Sources
- Incoterms rules, International Chamber of Commerce (ICC). Checked 13 Oct 2026.
- Incoterms 2020: rules for any mode or modes of transport (table of contents), ICC Digital Library. Checked 13 Oct 2026.
- Incoterms 2020, International Chamber of Commerce (ICC). Checked 13 Oct 2026.
- Place of delivery and risk transfer in global trade contracts (31 July 2025), ICC Academy. Checked 13 Oct 2026.
- Incoterms 2020: DAP or DDP? (25 February 2025), ICC Academy. Checked 13 Oct 2026.
- 2026 ICC Global Policy Commissions workplan (January 2026), International Chamber of Commerce (ICC). Checked 13 Oct 2026.
- ICC model contracts (list with edition years), ICC Digital Library. Checked 13 Oct 2026.
- Model contracts and clauses (store), International Chamber of Commerce (ICC). Checked 13 Oct 2026.
- Directive 2011/7/EU on combating late payment in commercial transactions, Articles 2, 3 and 6, legislation.gov.uk (The National Archives), text of the Directive. Checked 13 Oct 2026.
- Late payment, European Commission, Your Europe. Checked 13 Oct 2026.
- Procedure 2023/0323(COD): combating late payment in commercial transactions, European Parliament, Legislative Observatory. Checked 13 Oct 2026.
- WK 13630/2025 INIT, comments by delegations on late payment (30 October 2025), General Secretariat of the Council of the EU. Checked 13 Oct 2026.
- Your Guide to IP and Contracts (15 December 2020), European IP Helpdesk (EISMEA). Checked 13 Oct 2026.
Directory figures are counted from the manufacturers listed on NordSourced, each listed because its own website says it makes products for other brands; see how we check. This page is general information, not legal advice. Found a mistake? Tell us.