Say you’re a value-added reseller (VAR) who wants to broaden your reach and grow your profits by expanding into foreign markets. You’ve heard horror stories about the seizure of every item in Brazil. You’ve caught word that India is highly protective of their local production and has begun raising duty on certain imports. But is throwing up your hands and giving up on huge markets the wisest choice for you?
Below are a few examples of tricky nations in which it can be a challenge to do business, as well as some important tips on what you can do to expand your presence in any country – including how to reduce costs when importing items and making smart partnerships to maximize efficiency.
South America is appealing to IT manufacturers and VARs because of its large population and growing consumer middle class. Brazil is the eighth largest economy in the world, but shoppers often complain about their goods getting seized and stuck at customs. Brazil requires multiple tax ID numbers to be registered there. Firms spend many man hours filing the tax forms required. Rumors of corruption and items ‘disappearing’ certainly aren’t encouraging, either. Hearsay? If true, is it worth the hassle?
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They have some of the lowest electricity bills in Europe – appealing for a VAR pushing a variety of hardware – but it also takes businesses several months to get an electricity connection.The country has a bad reputation for the time it takes to export goods, but if you’re the seller, this isn’t a problem. American companies face troubles trying to export to the nation because of tariff and non-tariff trade barriers making it difficult to ship some goods, e.g., alcohol. In 2014, U.S. food and agricultural exports were banned after Crimea’s annexation.
It’s incredibly hard to start a new business here because of the 1.5 month minimum launching time for a new business. Infrastructure issues cause many new companies’ hopes to crumble. They’re begging for investors to drop billions in their bucket. They do have some appealing natural resources like coal that has caught China’s eye. Some of these issues are potential problems for new businesses to set-up shop, but are they necessarily a problem for your company’s specific expertise and products?
If a country has a bad reputation for doing business, you’re automatically going to have decreased competition because of the number of lazy companies who will check out. The nation’s problems might not have much to do with your goods, either. Often people won’t take their time to look into rules and regulations before they spread bad word-of-mouth. There’s a simple way to handle much of this –get an expert to do it for you.
Hands down, the best choice you can make if you want to expand globally into any country is partnering with an importer of record (IOR). TecEx, for example, has a long record and presence in any country where you might want to conduct business. How can an IOR help? Well, to start, you might be legally required to use one. They’ll look after all required import permits and arrange brokerage, clearance, and local delivery to your destination. There’s no need to worry about import compliance and your shipment will clear smoothly through customs. It’s also important to find an importer of record who can provide full tax recovery services for all of the indirect taxes incurred. TecEx specializes in shipping electronics and IT equipment abroad, and these items usually suffer import VAT, customs taxes, co-location taxes, and taxes on purchasing local goods.
Some nations might be tricky to conduct business in; however, if you make smart partnerships with companies who can streamline the process, and if you do some research into whether these nations are actually troublesome for your specific type of business and product, you’ll find the barriers were just a smokescreen, providing your partner with the right IOR services.