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If you wish to set up a company which deals in import export business then you should consider reading this article till the end. Setting up a company involves adhering to major compliances and regulations of the country where you seek to establish the company. Similarly, in case of the import export company, you need to consider and fulfil various requirements before the business can operate. In this article, we will apprise you about the procedure, basic requirements and other aspects of setting up an import export company in the United States of America.
Import/export businesses are usually very profitable. However, nothing is given in life so in order to improve the profitability of your company, you will have to conduct deep research on your industry and have a well-documented business plan. Knowing the costs associated with imports/exports business & determining profit margins while pricing your products is also a crucial factor.
The United States of America is one of those countries where import export business set up is a seamless exercise as in case of other countries license requirements are more stringent in nature. In order to import different kinds of items you may not require a license but there are some cases where having a license is a must. Commodity limitations applies to various government bodies. Importers will also be required to adhere to numerous regulatory standards.
In the last few years or so, the rates of import export in United States of America have increased rapidly. As per government records from the US Bureau of Economic Analysis, in December 2021 itself, average imports surged by 7.1 billion dollars and average imports rose by 7 billion dollars. This shows that customers are seeking unique and new products from around the globe when they shop. This also means that operating an import export business can be a lucrative business opportunity, however, as stated earlier numerous considerations should be kept in mind in order to run a profitable business in the longer run.
Basic types of import/export business are as follows:
An Export Management Company takes care of all the details for a company to ship goods out of the country. This includes hiring distributors, creating marketing materials and preparing shipping logistics.
It is a company that researches on the buyers likes and dislikes and then locates domestic companies to export such goods.
An import/export merchant purchases merchandise from a manufacturer then sells that around the world.
In the US, some of the common products that are exported includes the following:
As per the US Bureau, some of the top products that were imported into the US in 2020 were:
As far as exports are concerned, some of the top products exported from the US included the following:
The process of obtaining the license has been discussed below:
Before the import export business can start its operations, firstly, you will have to draft a business plan and specify how your business shall operate and other key factors.
Firstly, the Company Identification Number will be required, which is used by the Department of Commerce to track international trade operations and liabilities. One can visit the website of the Commerce Bureau of Industry and Security Department and fill the company registration form.
Before setting up the import export company in the US, one should be aware of the export restrictions imposed by the Dept. of Commerce. Certain things with military significance cannot be exported to other countries and export of specified items can be restricted by federal agencies.
Most of the products imported into the US don’t need a license. The US Customs & Border Protection have notified rules and regulations which specifies which items necessitate having an import export license. Different types of commodities like agriculture, food, livestock, and others mandate an import license.
You can apply for the license with the relevant agencies in the US while US Custom & Border Protection acts in an administrative capacity to verify the license. The procedures of obtaining the license may vary, but you may take the help of a professional or a consultant in order to have an understanding of the local regulations and requirements of the place where you want to set up the business.
Setting up an import export company can be a prudent option for those that like to build relationship with other countries however you need to go through the entire process of setting up the company and once it is set up you need to take care of the logistics that can be a challenging task.
Read Our Article: Import Export Code (IEC) Registration Procedure