Starting a new export import business can be a challenging task. New entrepreneurs entering the world of exports will likely have a thousand questions, ranging from the documents required, the legal guidelines they must adhere to. Unfortunately, this information is rather scarce and scattered across different sources on the internet, making it difficult to find.
Please refer this step by step guide to help yourself set up your new business.
Select type of Business Entity
For starting an export import business, one first needs to decide the form your business will take depending on the structure of ownership. Then you need to register your new business and choose a name for your business entity. You can form a Sole Proprietorship firm, a Partnership firm, an LLP, A Private Limited Company.
Get a PAN Card
After deciding the type of business entity, it is mandatory for every registered business entity to apply for a PAN Card (PAN) with the Income Tax Department.
GST Registration
After receiving PAN card ask your CA to register the company with GST India as it is compulsory as Customs department and GST department of India works hand in hand. It is also mandatory in order to get the government benefits and other tax refunds.
Open a Current Account
Bank Account which is used by business entities is called a Current Account. Your new export import business will need a current account to transact with customers and vendors. The documents required to open a current account vary depending on the type of business entity.
IEC Code
The IEC Code is required for anyone looking to start an import export business. Various supporting documents will accompany the IEC Code application form which will be filed with the Director General of Foreign Trade.
Choose your export product
Selecting the right product is key to your export import business plan. There are various factors you need to keep in mind such as the state of international markets, regulations, export trends, and more.
RCMC Certificate
India has a number of export promotion councils that work to promote the export of different product and service verticals. Registration with these councils gives exporters access to events and assistance to expand their business, and is also necessary for accessing certain benefits under India’s Foreign Trade Policy. The RCMC is essential to registering with them.
Selecting the Right Export Market
You have to ensure that your export product/service has the right market somewhere in the world. There are certain factors which a new exporter has to keep in mind such as Demand for the Product, Trade Barriers, Profitability, Political Environment etc. Based on these factors the exporter has to analyse the viability and accordingly choose his export market.
Finding Buyers
You have to ensure that your export product/service has the right market somewhere in the world. There are certain factors which a new exporter has to keep in mind such as Demand for the Product, Trade Barriers, Profitability, Political Environment etc. Based on these factors the exporter has to analyse the viability and accordingly choose his export market.
Managing your finance
No matter how well you formulate your export business plan and how many contingencies you prepare for, your business is unlikely to get off the ground without access to some initial financing. First, you need to get your Financial Projections right. It is important that you start with an estimation of your business’s financial requirements. Then you must figure out which type of export financing would be best suited for your export business. This can take the form of short-term as well as long-term financing based on your business’s requirements. Additionally, there are subsidies from the government that you can access.
Final Step
Your newly setup export business is ready to start operational activities like finalizing the shipping partner and freight forwarder/customs clearing agent, exploring market opportunities and promoting your business in overseas markets.
