Export activities can be one of the business opportunities to penetrate international markets and expand business scope. However, product export itself has stages and requirements that KH pals need to understand and do first. Yes, it is not uncommon for exports to be considered as a difficult marketing activity because the shipping costs are expensive and the customs process is quite complicated. In fact, the activity is easier than importing because it is not subject to taxes and duties abroad. Therefore, nowadays, exporting products abroad cannot only be done by large companies. MSME players and startup businesses can also do it. That way, it can be a source of pride because it means that the quality of domestic products can compete globally. So, how to export products abroad? What are the requirements and stages that need to be passed? Check out the full review in the following article! Definition and Benefits of Export Export is the activity of selling and shipping goods or services from one country to another. This activity is an important part of international trade and is one way for a country to participate in the global economy. In the context of exports, the goods sold are called “export goods” and the services sold are called “export services”.
Benefits of Exporting overseas
There are various benefits of exporting goods abroad, one of which is that products are increasingly recognized in the international market. In addition, there are still many benefits that will be obtained from knowing how to export goods, including:
Favorable to the Government
Exporting goods or services abroad can bring foreign currency to the home country and help create reserves. That is why the government provides incentives and many benefits to exporters. They will cut taxes to support exporters with other facilities.
Quality Products Will Always Sell
Furthermore, the advantage of exporting goods is that quality products will always sell. Exporting is a business that can be done by anyone with ideas and competitive product quality. The products you send must have advantages and be able to meet the needs of customers from abroad, so they will always be needed.
Unlimited Market
Only selling products domestically will limit the market size. You can export them to other countries around the world. Sending your products overseas will give you unprecedented opportunities to market your products and earn more profits. Selling products in international markets can help grow your company’s image and increase business revenue.
Increased Price Opportunity
Selling a product overseas will certainly increase its sales price than in the local market due to cost arbitrage between the two countries. This is determined based on the market where you are selling your product. This is the main reason why companies export goods.
Faster Payment Received
Competition in the local market is high and it can take a long time for a new business to make a profit. When exporting goods overseas, it is possible for you to receive payment even before shipping. This depends on the payment terms and agreement with the buyer. Also, international transactions are protected by various laws and you can generally sell your products at a higher price.
What are the requirements for export?
Before exporting products overseas, Sbat KH needs to prepare the required documents that must be fulfilled, including:
Purchase Order Document
Before exporting goods, make sure you have a purchase order document as proof of demand from overseas buyers. This document is needed as a requirement to create an invoice or billing letter to the buyer.
Export Planning
Export planning is something that needs to be carefully prepared. You must compile it in detail and thoroughly to facilitate the next process. There are several things that must be discussed with potential buyers if you want to export goods, such as:
- Products to be exported.
- Product classification.
- Country of destination.
- Product packaging.
- Shipping path.
- Determine the export schedule.
- Prepare Certificate of Origin (SKA).
- Prepare export notification documents (PEB).
Business Legality Document
It should be noted that MSME players who want to export products are required to have a business entity in the form of a Limited Liability Company (PT) first. This is in accordance with the Regulation of the Indonesian Minister of Trade (Permendag RI) No. 77/M-DAG/PER/12/2013. After forming a PT, then business actors can complete the legality documents to export, including:
- Trade License (SIUP) and Company Registration Certificate (TDP) made by the Regency/City One-Stop Integrated Service Investment Office (DPMPTSP).
- Taxpayer Identification Number (NPWP).
- Customs Identity Number (NIK) from the Directorate General of Customs.
Export Documents
Export documents that must be completed before shipping goods include:
- Exporter-generated invoice.
- Packing list made by the exporter.
- Bill of lading issued by shipping company (sea route) or airway bill (air)
Additional Documents
In addition to export documents and legality, there are several letters that are also needed before exporting goods, including:
- Shipping instruction of the exporter to the shipping line.
- Certificate of origin issued by the Regency / City Trade and Industry Office
- Certificate of analysis from the laboratory.
- Certificate of phytosanitary from the quarantine agency for plant products.
- Additional documents as per buyer’s request.
What are the Stages and Procedures for Export?
International trade allows a country to expand its market and access goods and services that it does not have. By doing so, the domestic market becomes more competitive and can result in more competitive prices. For this reason, knowing how to export products for beginners is very necessary for KH friends who are just starting to trade in the international market. The explanation of the stages and how to export products abroad is as follows:
Decide on a Destination Country
The first way to export products is to determine the destination country. Dig up information about the character and culture of the people of the destination country, so that KH Friend will have an idea whether the local community is indeed a target for your product or not. Also, find out information related to competitors who export products to that country. There is no need to go all the way to the export destination country, because all of this info can be obtained from the internet.
Register a Website on an International Business Portal
The next way to export goods is to register your business website with an international business portal. This can open up more business opportunities to acquire customers from other countries by utilizing government facilities. Through the website, you can obtain information about product inquiries from overseas companies, market briefs, and market intelligence.
Prepare legality documents
As stated in the requirements for exporting goods, you must complete legal documents before shipping your goods. To facilitate the export process, you must ensure that all information included in one document is the same. This information includes the company name, address, exported goods, and others.
Prepare Export Documents
The number of export document requirements is determined based on the product or commodity to be shipped, procedures in the destination country, and requests from buyers related to the company. Usually, exporters will not deal directly with customs because there are forwarders who will resolve all interests at customs. Forwarders are services that will ship goods by air or sea.
Make a Customs Declaration
Customs notification to the government is carried out by submitting all documents of the Goods Export Notification (PEB) and completeness documents to the Customs.
Obtaining an Export Approval Memorandum
KH buddy will obtain a Nota Persetujuan Ekspor (NPE) issued by Customs if the application is approved.
Exporting Products
The last way to export goods is to do stuffing and send the product by sea or air transportation. Don’t forget to insure the product or cargo. After going through the entire export process, you will immediately get payment according to the agreement with the destination country.
READ ALSO: Income Tax 22 on Import Exports.
That’s an explanation of the sundries of exporting products abroad, starting from the benefits, as well as the stages and ways to expand your business. Exporting is a promising business opportunity, especially if your products are of high quality and suitable for the market.
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Apart from earning huge profits, exporting is also a way to introduce local products abroad. If the quality is good, local products will become more popular. However, export activities are also accompanied by great risks. One of them is fraud that brings losses of up to tens or even hundreds of millions. Well, for KH Pals who want to export products abroad, be sure to complete all the requirements needed so that the process can run smoothly and safely. You can also consult what steps and processes must be done by business people when they want to export with Kontrak Hukum. In addition, KH pals can also simultaneously take care of the most complete and affordable business legality documents and export documents starting from the establishment of business entities, processing business licenses, and other legality documents.
What are you waiting for? Make your business expansion easier by visiting the KH Services – Starting a Business page. If you have any questions, don’t hesitate to consult with us at Ask KH or via Direct Message (DM) to Instagram @kontrakhukum.
