International trade between countries is not easy, especially in the field of import and export. Transactions in import and export often have problems and risks that can cause your business to be adversely affected. Therefore, importers and exporters need to recognize problems early to have timely solutions. Below, Vncomex will show you importing and Exporting Issues to Avoid in Vietnam.
Import and export issues to avoid first: Border Control And Distribution Laws
Customs clearance, unexpected levies, and a review of conformity with local norms and regulations are just a few of the issues that could arise before the goods even reach the market.
Use the services of trade compliance and customs law advisors to assist you transport items across the border promptly and safely. You may prevent the agony of having your exports held up at customs by exercising sound judgment.
Direct exporting, licensing, and partnerships/joint ventures are the three most popular distribution channels. The target country may make the decision for you. Protectionist regulations, such as “buy local” rules, encourage foreign enterprises to cooperate with indigenous firms or manufacture in the country.
When selecting in-country partners, be cautious. Bribery and other forms of corruption are tolerated in many emerging market business environments. Ascertain that your partners are aware of and abiding by the laws of your native country.
Lack of Knowledge on Exchange Rates is Import and export issues to avoid second
When trading internationally, if you don’t understand the exchange rates, you’re vulnerable to currency changes and limited in your ability to plan ahead and get the best deal.
What’s the fix? Consult your banker about the best ways to lock in a transaction’s profit and avoid risk. If you’re too busy to sell in other currencies, only sell in US dollars. You may protect yourself against the currency market’s ups and downs this way.
Records are kept incorrectly
One of the importing and exporting Issues to avoid is bad record keeping. Retain good records on all your international transactions for as long as you keep IRS records—from how you declare a good (Harmonized code, for example) to how you terminate a transaction, whether by email or other means, to how you finance a trade.
Never double-check a supplier’s or customer’s reputation and legitimacy
Have you done your homework on the company with which you plan to do business? Confirm the legitimacy of potential vendors. Check to see if they have a separate website if you locate them on a global sourcing site like Global Sources or Alibaba. What’s the harm in that? So, what do you make of that? See what comes up when you do a search on the Internet.
Conduct an online search to see what comes up on search engines when it comes to validating customers. Also, go out to government officials to discover what information they have about the customer.
Request references from anyone you work with, whether it’s a vendor or a consumer. Take a close look at them. Inquire about the supplier or customer you’re about to do business with from the references. Remember importing and exporting issues to avoid isn’t forget to verify the identity of your supplier and customer.
Incoterms’ Unfamiliarity and How They Affect Sales
Incoterms are a set of terminology that must be used in international contracts for the sale of products. For example, in this article, I cover drafting a proforma invoice using one of the most frequent phrases, CNF, which stands for cost and freight—you are responsible for paying the freight expenses and collecting afterward from your customer.
You must be aware of the expenses and obligations that come with employing a particular Incoterm. If you don’t, you may be underpaid on an export sale or overpaid on an import, for example.
It can also cause issues with customs, such as wrongly produced papers. By negotiating appropriate trade agreements, you can lower the risk of selling your goods worldwide.
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Being unaware of import restraints or controls on a product
Restrictions, import license requirements, and other import limits are examples of import constraints. Importing goods that violate quota rules or are dangerous may result in fines and penalties, which may eat into your revenues. Make sure you fully understand the import restrictions and controls in Vietnam so that you encounter importing and exporting issues to avoid.
Relationship with customs officials is terrible
Don’t overlook the value of a solid working relationship with customs authorities, transportation providers, and customs brokers. And don’t make the mistake of thinking you know more than they do! You’re in charge of ensuring that all U.S. import and export rules are followed, so get along with everyone and pay attention to what they have to say. Even if you employ a company to handle your import-export operations, you are ultimately responsible.
Undervalue or overvalue your products
Undervaluing your items might have disastrous consequences in terms of insurance and customs clearance. If it is discovered that the product’s worth was fudged to save money on insurance or avoid paying high customs charges, it will be labeled a fraud, the products will be confiscated, and if the buyer is found, he will be jailed and may be imprisoned.
So that no complications develop during the process, the price on the business invoice must always reflect the genuine price of the goods.
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All forms of delays are importing and exporting issues to avoid
You can lose a lot of money and chances if you wait too long. When a prospect requests information for a potential purchase, it’s up to your company to respond quickly, or you risk losing out on the chance to develop a long-term partnership that could see your company earn anywhere from a few thousand to millions of dollars each month for a year to five years.
Apart from missing out on opportunities, delaying customs duty payments or cashing in a Letter of Credit as payment for goods supplied could cost you a lot of money because every day your cargo sits in customs, you pay demurrage fees, and if you don’t clear them in time, the products may be completely forfeited.
Please contact Vncomex for further support and advice on importing and exporting goods in Vietnam.
Thanks for reading!