Import and export procedure(s) and documentation Leave a comment

If you are starting export-import business, then you need to be well aware all of the import and export procedure(s) and documentation. Knowing import and export procedure(s) and documentation is critical if you want all runs smoothly without surprises. We will handle export procedures.

You need to know import and export procedure(s), so you can plan and prepare all the actions in the right order. Secondly, you need to know documentation, because if you don’t prepare right documents or you prepare those incorrectly, then you may fail to export or import.

Also, starting and running a business is a process. Check out our exclusive guide for exporters and importers. This guide shows you the steps and there are crucial resources listed for each step.

Export procedure(s) or import procedure(s) are directly connected with documentation. Because anyone who wishes to export needs to provide or fill the documents required for export. Every procedure or process is related to some kinds of documents. Failing to provide the documents or failing to perform some export procedures can lead to serious problems and costs.

Import and export procedure(s)

1.Establish company, open business bank account and apply for export/import license

The followings are the crucial import and export procedure(s) what entrepreneurs need to follow through. No matter If you are exporting or importing, no matter as an export/import company or export-import agent.

In order to establish a company, you need to approach your country appropriate authorities and institutions.

Firstly, you need to fill the forms, confirm your initial capital, address details, contact details, and other formalities. After some time your company will be established. To establish a company, you also need to pay some government fees.

Note: Before, you decide to open a company, we suggest you think through your export business properly. It is smart to conclude export business plan as well. An export business plan will help you set right activities and set goals and priorities.

Secondly, you need to go to the local bank with your company corporation docs ( if you have a business plan, take this as well) and apply for a bank account. You need again to fill different forms and answer banker questions about your future business activities. After some time, you should have an existing bank account opened. You need international banking service, so you can send and receive money from abroad.

Thirdly, after you have an existing company with the bank account you need to apply for your export/import license. This is also called as IEC number ( your export/import license code no. Example, in India IEC, is a CODE  which contains 10 digit number issued by General Director of Foreign Trade,  Department of Commerce, Government of India.

So, in order, to apply the application, you need to approach to the Department of Commerce in India, in your local branch. Below are some important facts taken from the laws about obtaining the IEC in India.

Application for IEC/e-IEC

(a) Application for obtaining IEC can be filed manually and submitting the form in the office of Regional Authority (RA) of DGFT.

Alternatively, an application for e-IEC may be filed online in ANF 2A, in accordance with Para 2.08 of Handbook of Procedure on payment of application fee of Rs. 500/-, to be paid online through net banking or credit/debit card (to be operationalized shortly).

Documents/ details required to be uploaded/ submitted along with the application form are listed in the Application Form (ANF 2A).

(b) When an e-IEC is approved by the competent authority, applicant is informed through e-mail that a computer generated e-IEC is available on the DGFT website. By clicking on “Application Status” after having filled and submitted the requisite details in “Online IEC Application” webpage, applicant can view and print his e-IEC.

(c) Briefly, following are the requisite details /documents (scanned copies) to be submitted/ uploaded along with the application for IEC:

(i) Details of the entity seeking the IEC, as per Impex Policy 2015-20

(1) PAN of the business entity in whose name Import/Export would be done (Applicant individual in case of Proprietorship firms).

(2) Address Proof of the applicant entity.

(3) LLPIN /CIN/ Registration Certification Number (whichever is applicable).

(4) Bank account details of the entity. Cancelled Cheque bearing entity’s pre-printed name or Bank certificate in prescribed format ANF2A(I).

(ii) Details of the Proprietor/ Partners/ Directors/ Secretary or Chief Executive of the Society/ Managing Trustee of the entity:

(1) PAN (for all categories)

(2) DIN/DPIN (in case of Company /LLP firm)

(iii) Details of the signatory applicant as per Export Import Policy 2015-20 (FTP 2015-20):

(1) Identity proof

(2) PAN

(3) Digital photograph

(d) In case the applicant has digital signature, the application can also be submitted online and no physical application or document is required. In case the applicant does not possess digital signature, a print out of the application filed online duly signed by the applicant has to be submitted to the concerned jurisdictional RA, in person or by post.

(II) No Export/Import without IEC

(i) No export or import shall be made by any person without obtaining an IEC number unless specifically exempted under Import Export Policy 2015-20 .

(ii) Exempt categories and corresponding permanent IEC numbers are given in Para 2.07 of Handbook of Procedures.

(III) Only one IEC against one Permanent Account Number (PAN)

Only one IEC is permitted against on Permanent Account Number (PAN). If any PAN cardholder has more than one IEC, the extra IECs shall be disabled.

As you can see, in India without IEC number you are not allowed to export or import any goods. This is similar also in other developing countries like China, Vietnam, South Africa.

Only, if you are working as an export-import agent or sourcing agent, then you may not need to apply for the IEC code.

Previous was prework, for getting started in export import business, now we will look real import and export procedure(s).

NB! Actually, followings are directly related to Exporting. If you want to learn what are the steps and procedures for importing,  then read our case study about how to import from China successfully.

NB! Our guide & resources for exporters-importers will give you also tools and resources, what you need to use in each step.

2. Contact with buyers and make offers.

If your export company is set up, then real export procedures start. We assume, that you already know, what it is what you are going to export. If not find best export import opportunities from here.

You need to start contacting potential buyers from overseas. First, you should make sure where you can find buy requests. To make sure the right marketing channels, it is important to understand export-marketing. Then you should start directly approaching those potential buyers. In this export procedure, your lesson is to validate serious buyers. With serious buyers, you should start negotiations and discussions, with making sure buyers exact requirements for the products.

The validation of the buyers, this export procedure includes online research and background check of the potential buyers.

For validated and serious buyers, you should make a price offers. Price offer should include all the relevant data, such as price, delivery term, quality, validation period for the offer.

Buyer can accept or reject your offer, If reject, then you need to negotiate. If accepted, then let us move to the next import and export procedure(s).

3. Send samples to your overseas buyers

If you found a potential overseas buyer, then definitely, they will ask you to send them a sample first. You need to pack the sample and ship it to your customer, so they can check and test your product.

You need to use an airplane as a transport. We suggest using DHL, TNT or some other international shipping company. Also, they will help you, to fill export documents and will tell you, what you need to provide them. Even for sample sending, you need to fill the export declaration, where you mark product, its  HS code and, its value.

With sample sending, you need to prepare and provide following docs

  • Proforma invoice ( mark the price “0”)
  • Packing list
  • Sometimes you need provide CO ( certificate of origin)
  • You need give fill the airway bill with the receiver data, your data, destination.

Usually, it will cost around 100 USD to ship small test samples but depends on what you are sending.

NB! In sample sending import export procedure (stage), you need to make sure all the restrictions and duties related to your goods. Sometimes some goods are restricted to export.

Usually, there’s no export duty, but some goods may be restricted or prohibited to export in your country. Get yourself a customs broker in your country, they will help you make all clear. Making clear all duties, regulations, important terms related to your product is very important import export procedure, this will prevent you from future surprises.

After your buyer, received and tested your product sample, then if he is satisfied, they can move to the next export procedure ( stage). Ordering and signing the contracts.

In case, if the buyer doesn’t want to make an export order for you and it is not related with the product or price, then you should read why foreign buyers don’t want buy from you.

4. Confirm the order from buyer and receive money

Sign sale-purchase contract, issue a proforma invoice and receive the first payment

If your buyer like the sample, the next import export procedure (step) is that they will make the real export order for you. They will tell you the order quantity and terms. Now is time for final negotiation after what you need to sign the agreement of sales and purchase.

This stage belongs to the most important import export procedure.

In contract, all important terms and conditions need to be stated and confirmed. At least following terms need to be negotiated and settled into the contract.

  • Price of the goods and total price
  • shipping date
  • Description of the goods with HS code
  • Ordered quantity
  • Delivery term ( EXW; FOB; CIF)
  • Payment terms ( TT, LC, DC)
  • Inspection and warranty terms
  • Agreed advance-payment % and balance payment %
  • Packing details
  • Required docs provided by exporter
  • The step-by-step process of the work

4.1. Issue proforma invoice and request first payment

After the contract is signed then exporter need to issue the proforma invoice to the buyer. The buyer needs to arrange the advance payment to confirm the order. Advance payment is usually 30% and the balance payment need to be arranged against the copy of the bill of landing.

Or if you are using LC (Letter of credit) payment, then the buyer should open the deposit for you in the agreed bank. Also if LC, then all the LC conditions need to be agreed, so bank knows in what conditions the LC deposit will be released to the seller ( You).

In this stage, exporter needs to know all the buyer custom requirements and must be sure, that all can be done. Then exporter can prepare all docs and certificates and send together with the goods. (if using T/T payment).

If LC payment, then your bank will send the docs to the buyer’s bank and buyer bank will give over to the buyer.

For first time exporters, it is smart to use service of freight forwarders and custom-agents. They can help you with all the export formalities.

5. Prepare order to your customer

Now, you should have received the advance payment from your customer, this means the order is confirmed.

If you work 100% on LC, then, you should get a notice from the bank, that LC deposit is opened for you.

Nextly you need to arrange the agreed order to the buyer. You need to send the order to the shipping port. The exporter can use a freight forwarder to collect, pack and send the goods to the shipping port.

6. Final inspection by the buyer before shipping and final payment

This is very critical part of any export import business. Usually, the buyer is not going to make the final payment or accepting the goods, if he hasn’t got the inspection and test report. Buyer can come over and conclude the inspection by himself, or he can authorize some third party to do it. I si internationally common to use SGS for such inspections.

Final inspection will be done at your warehouse or on the port, before sending it to the shipping board.
This export and import procedure is critical. If inspection results are not what they should be, then you are in trouble.

But If this export and import procedure runs smoothly and all test report is what it should be, then buyer shouldn’t have any complaints. Also, Bank will check test report results ( if LC is being used).

If this export and import procedure is successfully finished, then we reach to the next stage.

7. Receive balance payment against B/L and test report copy

Before the goods have been taken on the ship board, you need to arrange the export custom. You need to provide needed details, docs to your country custom bureau. It is wise to use the service of a custom broker, so they will arrange all for you.

Export procedures of customs are specific and formal. If you don’t have previous experiences, then is it clever to let customs brokers and freight forwarders arrange everything for you.

If you send the goods to the ship, then you will get the Bill of lading (B/L) from a shipping company.

Now you are done and now you need your balance payment from your buyer, against the copy of the bill of lading and other docs if required.

You provide the copy of the bill of lading to the buyer and buyer need to arrange the payment to you.
If you used LC payment, then you need to present all the docs to your bank where LC is opened for you.

After you receive the balance payment or LC deposit, your export risk is over.

This import export procedure ( stage) is the riskiest for the exporter, after this, all risk will go over to the buyer.

NB! In export-import business, LC is often the best payment way for both, exporter and importer.

8. Send all the original docs to your customer and support him

Now, after you have received the total amount of your goods, you need to provide all the original docs to your buyer. Buyer needs original docs for the import custom. Without required export-import documentations he cant clear the importing customs in his country.

Even, the goods arrive at the buyers port, but the buyer doesn’t have the original docs of the goods, then he cant import the goods into his country.

You can send the docs with express, I usually use DHL for this.

Also, maybe your customer need some further help from you. Maybe he need some extra docs from you, so you should help him and provide all to him. It is important to support your buyer because then he is often willing to make next order for you.

Previous 6 import export procedure(s) are most important. But we didn’t handle here, how to find buyers and how to select right products or how to select right export markets. You can read more article about those topics below:

If you are more interested in importing, then we are sure you love our own case study about how to import from China.

Also, if you are serious about starting your export-import business, we have in-depth online course: “Zero to first deal” you can see it in our programs.

Now,  after the import export procedure(s) we will show you the most important docs in the export import business.

Documentation in export import business

Followings are the neccesary documents what every exporter and importer needs to provide or receive if you are importing/exporting. All the following docs are needed for clearing import or export custom.

NB! Having well crafted documents is very important in your export-import business. If you dont have professional documents, it can ruin your deal!

We have put togheter a full set of documnt templates, you would need in your business. You can get all the documents templates (HERE)

1.Proforma invoice (PI)

Mandatory Export import document.

This is a document, which will state the value per unit for the goods. And will show the total value of the goods exported. Also, the exporter and importer details are stated. There is no formal format for the proforma invoice, just make sure all the needed data is stated.

Below is a sample proforma invoice from our own business.

proforma/commercial invoice sample in the export-import business documentation

2. Sales-purchase contract

Belongs to mandatory export-import documentation.

This is the proof of purchase-sale between the parties. You need to present this to your country custom together with the proforma invoice. The sales purchase contract needs to be well-crafted and prepared. Entrepreneurs should use the service of professional lawyers.

It is not wise to use the contract forms that are available on the internet for free! We have included professional international sales-purchase contract form ( ready for use and modify) in our premium course.

Also, you can take a full set of business document templates, which we have packed for you from (here)

3. Export-import agent commission agreement

If you are working as an export-import agent, you are basically a representation of a supplier. You will be doing marketing and sales for the chosen supplier, against the commission fee, from the sales/transactions you have generated for the supplier.

In this case, you as an Exim-agent need the solid commission agreement to be signed with the supplier first. In the commission agreement, you should state all the related and important terms about the business relationship you will have with the supplier. Especially pay attention to state clearly the terms related to your commission fee.

4. NDA agreement

NDA ( Non-disclosure agreement) document, which protects, you as a supplier or export-import agent. It is a tool, protecting your business interests. It prevents the buyer from going directly to your supplier. We suggest this document to be signed with both, suppliers and buyers, before entering into business transactions with them.

NDA sets penalties for the signed parties. If one signee surpasses you as a supplier or agent, then based on the NDA you can take legal actions to get back the profit you lost, because of one side breaking the NDA.

5. Packing list (PL)

Mandatory export import procedures and documentation

The packing list states the quantity of the goods exported. Also those packing and weights and CBM,s. also, the amount of the packages are stated on the packing list.

On the packing list, also the product HS code is marked.
HS code is a code, that all the nations understand the same way. This code will determine the import duties and other formalities.

Below is again one example of our Chinese partner.

packing list in export-import business documentation

6. Bill of landing/Airway bill/Railway bill

Crucial Export import document for importers custom.

Afer, the goods had been taken on the shipboard, then shipper will issue the Bill of landing ( B/L).  This document confirms, that goods had been taken on the ship and are ready for shipping.

This is the proof for receivers and banks that the goods are ready for shipment.

Similarly, if the goods are transported by the airplane, then there is airway bill. If goods are transported by Train, then there is railway bill.

Below is an example of a bill of landing from our own business.

Bill of landing in export-import business documentation

8. CE certificate

CE belongs to the export import procedures and documentation if you are exporting to Europe.

With all the products, the CE certificate is required, in trading with Europe.

The producer must have been certified by third country to have CE certificate. CE confirms, that the product meets the European Union safety standards.

Below is the example.

Ce certificate
Ce certificate

9. Material safety sheet (MSD)

Sometimes this document is required by importing country custom. This doc can be issued by the exporter and must confirm that product is not harmful to the humans and nature. This doc is usually required for liquids.

10. Freight insurance certificate

This doc is not mandatory in export import documentation.

If the goods are precious then usually the buyer requires that exporter signs insurance-policy for the goods. The insurance certificate is issued by companies who provide insurances. Also the international shipping companies like DHL, DSV provide the insurances.

Below is one example of our own export-import business:

freight insurance certificate in export-import business documentation
The previous documents and the import export procedures are the most common ones in the export-import business.

Conclusion about import and export procedure(s) and documentation

NB! if you want all the crucial documents, all at once. Then check out our full-set of business document templates.

There are lot more documents and procedures that are required if exporting some specific product. For food product example, the exporter needs to provide health inspection certificates and sanitary certificates.

Some export and import procedure(s) and documentation can turn out to be very costly as well. All costs need to be considered for your export business.

In order to apply those certificates, special import and export procedure(s) need to be concluded.

If to export medical products, then the rules are even more strict and special licenses may need to apply. Then import export procedure(s) and documentation could be much more complex and involve special institutions and organizations.

NB! That’s why, at the stage of sending the samples to the buyers, you need to make sure what docs and licenses are required by importing party custom for a specific product.

Sometimes it may come clear, that some docs cant be issued. Then also the product cant be an exporter. It is crucial to make all sure at the very beginning.

Previous were primary import-export procedure(s) and documentation, we hope it was useful.

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