Exporting goods is a complex process, for which not all companies are prepared. Exporting outside the European Union (EU) can be even more challenging. Before starting the export process, it is necessary to find out whether the company has the necessary tools to do so. Having experience in the target market, having the necessary human, financial and legal resources, having a concrete export strategy and having a well-structured financial/commercial plan are some of the most relevant aspects to consider when starting an export process.
There are, therefore, 5 essential steps to follow for your company to be successful in exporting goods:
First, you must identify a market as well as a buyer for the product. To identify the target market, you should consult the trade statistics of the target market(s). Subsequently, you can identify potentials through trade fairs and/or events, or assistance from chambers of commerce.
Next, you need to be aware of the basic requirements for exporting outside the EU. You can export directly to a buyer (company or end consumer) in the target market, or via e-commerce. In order to meet all legal requirements, to export goods you need to have a company/stable establishment established in the EU, be registered in the national trade register of the target market, have a work permit (if you live outside the EU). You must also have an Economic Operators Registration and Identification number (EORI) to be able to export goods. Additionally, it is relevant to find out if the product to be exported is subject to any restrictions in the EU and/or the target market, as well as applicable tariffs, trade defence measures, technical and safety requirements, certification, packaging and labelling requirements, and intellectual property protection of the product. It may also be beneficial to know if there are any applicable trade agreements between the EU and the destination country.
To prepare the sale and organize the shipment, it is necessary to know how the liabilities are shared between the company and the buyer. At this stage, Incoterms® can prove to be a powerful aid. Incoterms® make it possible to establish the responsibilities of sellers and buyers for delivery, insurance and transportation of goods. Incoterms® also determine which party is responsible for customs formalities in the EU and import formalities in the target market country. There are several Incoterms, but the most commonly used are:
- FOB (Free on Board): means that all local expenses are borne by the exporter/seller – includes transportation to the port of shipment, loading costs, and customs clearance processes in the country of export;
- CIF (Cost, Insurance and Freight): means that the exporter is responsible for the local costs of FOB plus the costs of insurance and transportation fees;
- EXW (Ex Works): means that the price paid for the product ex works includes the value of all materials used in its production, as well as all other costs related to it;
- DDP (Delivered Duty Paid): means that the buyer assumes the responsibilities that the exporter cannot fulfill in the country of destination.
You should also take into account the documents required for customs clearance, these being:
- Invoice and shipping documents, and loading list;
- VAT and export records;
- Certificates or licenses.
Upon arrival in the country of destination, the goods are subject to local import requirements and processes, and some documents are required. These documents can consist of commercial invoices, packing list, import certificates, proof of preferential origin, certificate of origin, among others.
If you are looking to export goods, Market Access is available to help your company. Learn about our services here.