Simplified Trade Finance
We know that setting up any new business can be a challenging task, and export businesses are no exception. New entrepreneurs entering the world of exports will likely have a thousand questions, ranging from the documentation they need to the legal guidelines they must adhere to. Unfortunately, this information is rather scarce and scattered across different sources on the internet, making it difficult to find. Through this series, Drip Capital aims to guide budding new exporters through the process of setting up their exports business.
This step-by-step guide will take you through the various activities you need to do to get your export business off the ground -- right from choosing the right type of business model to selecting your markets and buyers to setting up your final documentation and getting ready to ship your first order. Follow these steps, and you should be ready to start your journey in the world of international trade. Good luck!
As the promoter of the business, you and your partner(s) must have a valid identity and address proofs in order to register your business.
To incorporate your business and form a "company", you have to choose a name for your business entity and the type of entity you want it to be. You can form a Sole Proprietorship firm, a Partnership firm, Company, etc. We discuss the various forms and which will be best for your needs here.
Every registered business entity must mandatorily apply for a Permanent Account Number (PAN) with the Income Tax Department. The procedure for getting a PAN for a business entity is largely similar to that of applying for a personal PAN, and is discussed further in this guide.
Your new business entity will need a bank account to transact with customers and vendors. The documents required to open a bank account vary depending on the type of business entity, and we cover the basic types and procedures for opening the same here.
The IE Code is required for anyone looking to get into the import-export business. Various supporting documents will accompany the IE Code application form which will be filed with the Director General of Foreign Trade. Read more here.
Selecting the right product is key to your export business. There are various factors you need to keep in mind such as the state of international markets, regulations, export trends, and more. You can find more detailed information as well as a rough guide to point you in the right direction here.
India has a number of export promotion councils to encourage the export of specific products and services and the Registration Cum Membership Certificate is essential to registering with them. These RCMCs are valid all over India and take roughly a week to get the registration done. Here's how you can get yours.
You have to ensure that your product/service has a market somewhere in the world. There are some specific ways of establishing an export market, as you can find out in this brief guide.
No matter how well you prepare your business plan and how many contingencies you prepare for, your business is unlikely to get off the ground without access to some initial financing. This can take the form of short-term as well as long-term financing based on your business’s requirements, plus there are additional subsidies from the government that you can access.
By completing these steps your business is ready to start the operational activities like finalising the shipping partner and the customs clearing agent, exploring the market opportunities and promoting your business in the overseas market. Follow this step-by-step guide, and you should be ready to tackle your first shipment and the challenges that come with it -- topics that we will cover in our next guide! Stay tuned!