guide to exporting Requirements
Exporting is a way to increase your market size and profits. On average, by doing exporting, you could potentially grow your sales, more jobs are created and have access to global markets. Here’s a summary to help you understand everything about exporting requirements. To learn more in depth about guide to exporting, you can check out Beginner’s Guide to Exporting.
Today’s small businesses can operate anywhere around the world and exporting becomes essential for them in order to grow. Exporting can be profitable, gain more access to consumers and businesses as well as diversifying your market opportunities. Other reasons why companies are doing export are to expand their sources of revenue, to enhance competitiveness and to achieve economics of scale. However, before venturing into export markets, there are six considerations that companies should consider which are:
Production - Adequate supply of raw materials and able to expand production capacity.
Financial - Healthy financial standing, access to funding both commercial & government and understanding the payment instruments.
Human Capital - sufficient trainable and knowledgeable staffs, multi-skills and multi-lingual workforce.
Marketing - sufficient marketing collaterals, have access to various distribution channels and knowledge in export market strategy.
Export Requirements & Compliance - comply with import and export requirements, adhere to labelling and packaging requirements of the importing country.
Legal - comply with international legal requirement, understanding the Free Trade Agreement (FTA), awareness on Intellectual Property Rights (IPRs), knowledge on arbitration and dispute settlement.
understanding export requirements of products and services
The export of products and services are regulated by the relevant authorities. However, these regulations can change from time to time. Thus, it is important for exporters to check with the relevant authorities.
Requirements to meet the international standards will bring at least three major benefits such as :
• Increase competitiveness in the global marketplace
• Translate into faster, easier access to foreign markets
• Simultaneous acceptance to countries adopting common standards.
Market requirements may vary between countries depending on the types of products. Among the requirements to be fulfilled are:
• Labeling And Packaging
• Products Safety
• Sustainable Products
• Product Design
• Consumer Preference
• Import Restrictions
All these payment instruments are applicable for both conventional financing or islamic trade financing.
• Letter of Credit (L/C)
• Advance Payment
• Open Account
• Documents Against Payment (D/P)
• Documents Against Acceptance (D/A)
• Open Account
Free Trade Agreement (FTA)
FTA is a legally binding agreement between two or more countries where member countries provide each other more favourable treatment such as :
• Lower or zero tariff for export of goods
• Relaxed or removal of quantitative import restrictions
• Hassle free custom procedures
• Improved market access for various services
• Easier entry for businessmen
• Better terms for investment
Government placed restrictions on trade between nations which can be in the form of subsidies, tariffs, quotas, duties and embargoes.
- Tariff Barriers: High tariff rates imposed by importing countries
- Non-Tariff Barriers: Restrictions imposed by importing countries namely licensing, quotas, duties, embargoes aimed at reducing the quantity of imports in order to protect the interest of the domestic producer or to conserve the currency exchange.
- Other Barriers: Language, political, cultural, religion, infrastructure and currency are other common barriers faced by exporters.
To have a better understanding on Malaysian export and other export compliances, you may click here.
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