It can be hard to start a new business. New entrepreneurs entering the world of exports will have a lot of questions, ranging from the documents required to the legal guidelines they need to follow. It is difficult to find this information on the internet due to it being scarce and scattered across different sources. The aim of the series is to help budding new exporters set up their business. In the last few years, we have seen a growth in the export and import of goods and services in India. More and more entrepreneurs are venturing into this area because of the change. It turns into a nightmare if you jump in without weighing the pros and cons.
Table of Contents
This step-by-step guide will take you through the various activities you need to do to get your export business off the ground – right from choosing the most effective type of business model, to selecting the right markets and buyers , to setting up your final documentation and getting ready to ship your first order. You should be ready to begin your journey into the world of international trade after following these steps. You have good luck!
Get a PAN Card
There are a number of documents needed for starting a new export business. To register your business, you and your partner must have valid identity and address proof.
The Income Tax Department requires every registered business entity to apply for aPAN card. The procedure for getting a PAN for a business entity is similar to that of applying for a personal PAN, and is discussed in this guide.
Select type of Business Entity
If you want to start an export import business, you need to decide on the form your business will take. You need to register your business and choose a name for it. You can form a Sole Proprietorship firm, a Partnership firm, an LLP, or a PrivateLimited Company.
Open a Current Account
A Current Account is a bank account used by businesses. A current account is required for your export import business. The documents required to open a current account vary depending on the type of business.
Don’t forget the IEC Code!
Anyone who wants to start an import export business needs to use the IEC Code. The Director General of Foreign Trade will receive the application form along with other supporting documents.
Choose your export product
Selecting the right product is important for your export import business plan. The state of international markets, regulations, export trends, and more are some of the factors you need to keep in mind. In our guide for selecting the right export product, you can find more detailed information and a rough guide to point you in the right direction.
Your Registration Cum Membership Certificate (RCMC) is important too!
India has a number of export promotion councils that promote the export of different products. To access certain benefits under India's Foreign Trade Policy, exporters need to register with these councils. It's important to register with the RCMC. It takes about a week to register for the RCMC in India. If you are an exporter of agricultural or processed food products, there is an online registration facility on the website of APEDA.
Selecting the Right Export Market
Ensuring that your export product/service has the right market in the world is something you have to do. The viability of the export market is based on certain factors such as demand for the product, trade barriers, Profitability, political environment and so on.
Finding Buyers for your Product
After selecting the product and market, the next step is to figure out how to find buyers for your export product. You can collect leads for your product through a number of ways, such as creating a website, registration on buyer-seller platforms, participating in Trade Fairs and Exhibitions, and using government bodies.
Don’t forget to get your finances in order
Your business is unlikely to get off the ground without some initial financing, no matter how well you formulate your export business plan and how many contingencies you plan for. You have to get your financial projections right. You should start with an estimate of your business's finances. You need to figure out which type of export financing would be best for your business. The form of financing can be short-term or long-term. There are subsidies from the government that you can access.
Getting ready to go!
Your newly setup export business is ready to start operational activities such as finalize the shipping partner and freight forwarder, exploring market opportunities and promoting your business in overseas markets.
If you follow this step-by-step guide, you should be prepared to tackle your first shipment and the challenges that come with it. Stay connected!
a) Register Your Business in India for Import Export –
Before starting a business in India, you need to register. Each business formation has its own features so you can register your business according to your needs.
- When you want to test your idea in the Import or Export Business and you are sole owner of the Firm which control on the business, solo firm registration is the best. VAT/CST and IEC Code can be used as tax registration for import export businesses so they can be formed in less time and money. It is possible to save the income tax if you only pay the income tax on the Slab basis.
- The partnership firm requires minimum 2 partners instead of one. It is the best place to test your ideas in the Import Export Business with the Partners. After you open a current bank account on the firm name, you have to apply for the VAT/CST and IEC Code.
- One of the most popular business formations in India is the PrivateLimited Company. You can easily raise funds through the investor if you allow the company shares instead of bank loans or other funding options. The limited liablity in the business is another great feature. The Legal Entity of India goes to the Private Company.
- When your budget is tight and you want to enjoy company features, LLP registration is the best way to go. The most important feature of the LLP is limited liability. It is registered with the Central Government and is valid in other countries. If you want to deal with the big companies during the Import Export, then you need to use the LLP. In the United States it's called a limited liability corporation.
Are you able to register your Legal Entity for the Import Export Business?
You can either hire the Local CA/CS/Lawyer from the references or you can register your company online through myonlineca.
b)Apply for IEC Code for the Business in India :-
The registration number for the Import Export Code is required for any type of business in India. A 10 digit code has been issued by the Director General of Foreign Trade of India or the Ministry of Commerce in India. It's possible to get the IE code in an easy and simple manner if you submit all the essentialdocuments to the government.
c)Apply for VAT and TIN Registration in India :-
If you want to sell goods in India, you have to register your business with the state government. VAT is a indirect tax and its rules are very state to state. It's a little bit expensive in some states.
Now that VAT or TIN has been converted into the GST registration, you can apply for the registration directly.
d)Hire a Custom Clearing Agent :-
You need to appoint an expert customs clearing agent. He will be able to assist you in clearing the batches. It is the responsibility of an agent to calculate numerous expenses in port. Handling charge, customs duty, transportation charges, and much more are included in these expenses.
e) Use your ownfreight forwarder :-
A freight forwarder or forwarding agent is a person or company that organizes and manages point to point shipments for individuals or corporations to import goods from the manufacturer abroad.
There are some tips that are needed for import export business in India.
- Business Current Account has a code.
- You can finduted suppliers from websites.
- Purchase Order can be raised on your company's name.
- Purchase order and invoice must be the same amount.
- Third parties can be used to ship.
This article is helpful for you. There is a great Infographic on how to start an export business.