How to start new export firm in India?

What we are trying to understand in this post is that how to set up, how to export, how to take off in the international market, which I just mentioned to you, that the geopolitical situation in the world, the changes which are happening is in favor of the country, our country. Because we are at the right side of the the soft power which we have in comparison to countries like Russia or China or similar other countries. So to benefit from this change, geopolitical change. It is very, very important that more and more people get into the export business and they know how to set up the export business and how to really start what preparations are required.

So in this post today, our agenda will be to talk about the different choices we have, to start a company.

What kind of formation of the firm?

What type of firm we can start for exports, which is in alignment with the requirement of the different agencies which are involved in the export business?

I’ll also talk about which are the agencies which are very, very important to set up your export business or to start on export and to help you in exports and the compliance which are required. So we’ll be talking about the compliance as well as the legal compliance to set up the export business. And in one of our agenda, we will be talking about some of the important registrations, some of which are mandatory and some of which are good to have to really benefit from the export business, the kind of incentives to claim, you know, what kind of registrations are required or to get benefits, to get the benefit of the taxation which is the GST relief. So those things we will be talking about.

And the kind of interaction we are going to have with the bank which touch points from the bank point of view, what formalities are required? So we’ll be talking about for the exporters so that they can freely deal with the foreign exchange. So this will be our agenda of this particular session for which we have something like more than one hour, one hour 20 minutes something. So we can talk about these things and you can in between if you have any questions you can definitely ask. And when I talk about these different forms of organizations, the organizational status which should be chosen, for example.

So it serves very well for the kind of products you are dealing with or you plan to deal with, like the corrugated boxes or any kind of manufacturing of the animal feed or the organic products, anything. Agri products especially. If you’re dealing with agri products, there are certain extra formalities, whichever are required. So I’ll be definitely touching upon that agri business, agri products also. So let us start on this.

Let us first talk about that the first thing is the formation of a firm which actually, you know, when we see formation of the firm, we need not at that this time probably we do not know exactly what products we will be dealing with. You may be already dealing with certain products, but you must be introspecting yourself and asking yourself whether any changes are required on those products to make them exportable. So for example, when we say of the corrugated boxes, we are doing a great job for the domestic market, but this great job that we are doing for the domestic market is because there is certain kind of demand in the Indian market and there may be a demand for similar product, but not the exactly the same product in the international market.

So when we form the firm, probably we are not talking about what kind of tweaking is required that we can do later also. But definitely at this stage we are looking for a company which makes sense to your brand name, existing brand name, your existing products. If you already have a firm, then you can continue with the same firm and apply for the requisite registrations and you can carry forward with the existing firm.

So it can be an individual proprietor firm. Definitely nobody in India, nobody stops you to run a proprietor firm. You already know in the proprietor firm, your taxation is on the personal basis, on the individual basis. So those things will remain. But there is nothing, no problem with the proprietor firm. One very important thing I want to share with you in this, that generally whether you have a proprietor firm or you have a LLP or a private LTD, generally my experience is that in the international market, it doesn’t really matter. Because let me share with you some of the feedback which I got from the companies which are dealing in the domestic market, in India. They go for private limited or even public limited companies to impress upon the clients to get better business or to align with the requirement of the some of the government orders. So they either go for LLP or private limited or public limited. My experience is that in international market, it really doesn’t matter whether you are an OPC or you are LLP or what ever type of firm you are.

You can still continue business until you have got a better history. If you can create a good history of yourself, you’re able to create a good profile of yourself on the right platforms, in today’s time, Online platforms, you can create a good name for yourself. It really doesn’t matter whether it is a proprietor company or any other different type of companies which can be a one person company also OPC also. It can be the limited liability company also. It can be a private limited. In LLP, you should have minimum of two partners. probably you know about it. This is the most easy way to start the company, and it can be done mostly on online itself. So two partners can start LLP, and there can be more also. And in the LLP there, if you wish, you can have a foreign partner also. So those facilities are available like in the public Ltd or private ltd companies.

So about the private limited companies you already know they are also you have directors and about the public LTD companies. So normally your CA will give you a better advice on this. Depending on your capital which you are employing for your business, what are your plans, what type of markets you are into, you are likely to be targeting? That may also decide the choice of the formation of the firm. So for example, suppose you are dealing with the African market. Maybe there is some situation that they know more about India. And in many of the African countries you will find many Indian diaspora who are actually the buyer. So probably they are they may not like to deal with the proprietor company. May be they look for a private limited or public ltd company in India. So that is possible.

So you have to take this decision based on the situation, based on different factors, and especially the advice of your CA. One thing here I want to tell you that as per the Indian legal system and the law related to the export import, foreign trade policy, even a society or an NGO, non-government organization or trust, you can carry on your export business. So you can apply for the requisite registration and licences for exports even as society or NGO or a trust.

So these are very important thing which I wanted to share with you, with respect to the status of the firm which you want to start with, with which you want to take off, to your international journey, global business. So this is one thing I wanted to share with you about the different types of companies, You can start with. So your choice should be very smart choice and need not focus too much on this. You need not really be very much bothered about what kind of company you want to start with.

More important thing would be that what is your overall marketing strategy, your overall business strategy, the kind of markets you select, the kind of products you either already have or you select or modify, Those things matters more than the formation of the firm, any type of firm you can start.

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