Before Starting an Import and Export Business you have to require pre-checklist i.e are followings:–
- Register Your Business as Legal Entity like Proprietorship Firm/Partnership Firm/LLP/Company.
- Apply for Import Export Code Registration for your business.
- Apply for VAT/TIN Registration for your business. ( Now its called GST Registration in India)
- Hire a Custom ClearCustomsent.
- Use your own freight forwarder.
Register Your Business in India for Import Export
Before Starting any Business in India you have to require register your business. you have to register under a firm/LLP or company. so every business formation depends upon your requirements. Each business type of formation has own features so you can register your business according to your needs so we explain in simple words below about each type of business formation
- Solo Firm Registration: Basically Solo Firm Registration is the best when you want testing your idea in the Import or Export Business and another Best thing that you are the sole owner of the Firm which controls on the business. As an Import Export Business, you have to require only the tax registration as a firm like VAT/CST and IEC Code so it can be done at less cost of formation. Even you have to pay just only the Income tax on the Slab basis as Individually so you can easily save the income tax.
- Partnership Firm:- Partnership Firm is the like Sole Proprietorship Firm But its require minimum 2 partners instead one. It has an unlimited liability in the business but best for the testing your ideas in the Import Export Business with the Partners. Its require just draft only a Partnership Deed and open a current bank account on the firm name, after that you have to apply for the VAT/CST and IEC Code.
- Private Limited Company:– Private Limited Company one of the Most Popular Business Formation in India. Maximum Big Importer and Export Choose the Private Limited Company because you can easily raise the Funds through the Investor by just allowed them Company Shares instead of Bank Loans or other funding option. Other great features are the limited liability in the business. India’s 60% Legal Entity go to the Private Limited Company.
- LLP:- LLP Registration is the best way to doing the business when you have partners and your budget is tight but you wanna enjoy company features. In the LLP Most important feature i.e is limited liability. even in the LLP, you can do multiple businesses under one LLP. Its Registered with the Central Government (MCA) and valid in other countries also. If you want to deal with the big companies during the Import-Export then must go with the LLP. In the US(United State) Its called LLC(Limited Liability Corporation).
Apply for IEC Code
Basically, for any type of business in India need IEC ( Import-Export Code) Registration Number for doing Import Export Business. so after the Business Registration, you have to apply for the IEC Code. This code consists of a 10 digit code, which has issued by Director General of Foreign Trade, Government of India or Ministry of Commerce to Indian firms or companies. Submitting all the essential documents to the government can give you a support to have the IE code in an easy and simple manner.
Apply for VAT and TIN Registration
VAT and CST or Sales Tax or TIN Registration is required for selling the goods in India for the retailers and manufacturers. so after the business registration, you have to apply for the VAT Registration from your state government. VAT is an Indirect taxes so its rules and regulations vary state to state. Even in some state, there is security concept so its little bit expensive.
Note:- VAT or TIN has been converted into the GST Registration so now you can directly apply for the GST Registration
Hire a Customs Clearing Agent
Last but not the least, you need to appoint an expert customs clearing agent. He will be able to assist you in clearing the batch at the port. Calculating numerous expenses in port is also important, which is the responsibility of an agent. These expenses include handling charge, customs duty, transportation charges and much more.
Use your own freight forwarder
A freight forwarder or forwarding agent is also known as an NVOCC (non-vessel operating common carrier), is a person or company that manage and organizes point to point shipments for individuals or corporations to import goods from the manufacturer abroad to your location.
Some Tips which is required for Import Export Business in India:-
- Business Current Account has a SWIFT Code.
- Find Reputed Supplier from Alibaba or other Website.
- Raise Purchase Order ( PO) in your Company Name.
- Purchase Order and Invoice amount must be same.
- Hire third parties for the shipping.