This document provides information on international business and exporting terms and strategies. It defines key terms like exports and exporting. It discusses reasons for exporting like expanding sales and achieving economies of scale. It also outlines strategic advantages and factors to consider in developing an export strategy. The document then discusses export plans, potential pitfalls, export processes and documentation, customs codes, intermediaries, modes of exporting, and export incentives.
2. BASIC TERMS
• Exports:
– goods and services flowing out of a country
• Exporting: the sale and delivery of goods and
services by a firm based in one country to
customers residing in a different country
– results in receipts from the customers
– affords less control over the marketing function
3.
4. REASONS FOR EXPORTING
Production Surplus. (Expand Sales)
Comparative advantages ($,Q,Quality,Avaliability).
Product and Market Diversification
(Int Competence/Local MK situation)
^ Competitiveness (New tech, Know How & Manag.
Performance)
Int. Joint Ventures (Costs, Efficiency & Diversi).
Less Risky than FDI.
Reach Economies of Scale
Economic Agreements – Get in Globalization
5. STRATEGIC ADVANTAGES OF EXPORTS
• Increase revenues and profitability
• Achieve economies of scale in production
and research
• Alleviate excess capacity in domestic
operations
• Minimize risk (as compared to licensing
and foreign direct investment)
• Diversify markets
Exporting requires expertise in dealing with government
institutions, particularly customs agencies, as well as the
documentation process.
6. EXPORT STRATEGY
• Strategic factors affecting the choice of
exporting as a mode of entry include:
– the ownership advantages of the firm
• The international experience of the firm
• The firm’s ability to differentiate its products
– the location advantages of the market
• Market potential
– the internalization advantages of specific assets
• Specific skills or assets that are not licensed or sold
7. FOUR BIG QUESTIONS
What does the company want to gain from X?
Is X consistent with other company goals?
What demands will X place on its key resources?
Are the expected benefits worth the cost?
10. POTENTIAL PITFALLS
Lack of Q. Counseling & Master Int MK plan
Lack of Commitment (Difficulties & Financial Req)
Wrong Choice of Overseas Agents or Distributors
Lack of ordery growth (Chasing worlwide orders)
Wrong distributors treatment (Dom Counterpart)
Unwillingness to adapt products (Regulat-Preferen)
Languange Misuse (Service, Features &Warranties)
Not using EMC´s when necessary. (Proper Staff)
11. STEPS FOR DESIGNING AN X
STRATEGY
1. Assess Export Potential
2. Get Expert Counseling
(Export Assistance Center – Proexport)
3. Select a Market or Markets
(Request-Trade shows-Publications-Census)
4. Formulate & Implement an X Strategy
(Short &Long Term Objectives-Tactics-Schedules &
Deadlines-Resources Allocation-Tasks Assignation)
12. EXPORT PLAN
1.TARGET MARKET RESEARCH
COUNTRIES PRE-CHOICE
• Current Dest. of Colombian X(Your Product)
• Cultural & Comercial Affinity
• Tariff Preferences
• Competitor Countries
• Transportation Availability
15. 4.X PLAN EXECUTION & FOLLOW UP
• Int Quotation or valuation
• X Logistics
• X Paperwork
• Exports Tax Legislation
• Exports Incentives
• Results Evaluation
18. AS TARIFF
• Specific
• Certain amount payment charged for each
imported good unit (volume, lenght or weight).
• Ad Valorem
• Percentage of good’s value. Mostly Used
• Mixed
19. TARIFFS
Act 370/1994: Andean Community Countries rates:
• 5%
• 10%
• 15% Varies according to the
level of process.
• 20%
• 35% (Vehicles)
20. AS CUSTOM CODE
HARMONIZED SCHEDULE
• System using a code for grouping and
classifying merchandise by cathegories for Int
Trade.
21. HARMONIZED SYSTEM STRUCTURE
21 Sections
96 Chapters
1249 Custom Codes (Four Digits)
5018 Sub Custom Code (Six Digits)
Legal Notes
General Rules
22. MERCHANDISE GROUPING WITHIN THE
NOMENCLATURE
By Nature By two main By Industrial
chemistry Activity
Kingdom branches
• Animal • Pharmaceutic,
• Inorganic
(Section I) Plastic,
(Chapter 28)
• Vegetal Rubber,
• Organic
(Section II) Paper, Metal,
(Chapter 29)
• Mineral Textile,
(Section III) Machinery
and Electrical
Material,
Glass, etc.
23. NOMENCLATURE
• I. Animales vivos y productos del reino animal
• II. Productos del reino vegetal
• III. Grasas y aceites animal o vegetales...
• IV. Productos de las industrias alimentarias...
• V. Productos de las industrias químicas...
• VI. Plásticos y sus manufacturas
• VII. Caucho y sus manufacturas
• VIII. Pieles, cueros, peletería y manufacturas de estas
materias...
24. NOMENCLATURE
• IX. Madera, carbón vegetal y manufacturas de
madera...
• X. Pastas de madera o de las demás fibras
• XI. Materias textiles y sus manufacturas.
• XII. Calzado; sombreros y demás tocados...
• XIII. Manufacturas de piedra, yeso fraguable...
• XIV. Perlas finas ( naturales) o cultivadas, piedras
preciosas o semipreciosas...
• XV. Metales comunes y manufacturas de estos
metales.
25. NOMENCLATURE
• XVI. Maquinas y aparatos, material eléctrico y sus
partes. Aparatos de grabación…
• XVII. Material de transporte
• XVIII. Instrumentos y aparatos de óptica, fotografía o
cinematografía...
• XIX. Armas, municiones y sus partes y accesorios...
• XX. Mercancías y productos diversos.
• XXI. Objetos de arte o colección y antigüedades.
26. LEGAL NOTES
Including
Excluding From Section
Defining From Chapter
Precisioning From Subcode
Complement
34. CUSTOM AGENTS
If X is more than U$10.000
If M is more than U$1.000
It is compulsory to contract the services of a CA
(SIA)
35. CUSTOM INTERMEDIARY
AGENCIES – Agentes Aduaneros
( Formerly SIA)
• Do errands & Papework refering to X/M/In
Transit
• Act on behalf of the Importer or Exporter
36. HIGHLY EXPORTER USERS (ALTEX)
• Req: (12 last months FOB US2 m)(X=60% Total Sales
They can be through Electronic Trade Confirmation)
Benefits:
• No Physical Inspection (May Be Random)
• Custom Insp at their facilities
• May do M (Temporary Import for Ind Processing)
37. PERMANENT CUSTOM USERS
• 12 last m X or M U$ 8m OR 8U$m as an
average during last 3 years
• If not, 2000 M or X Declarations last 12m.
Benefits:
• Global Shipping Authorization (Partial Shipments)
• No Physical Inspection (May Be Random)
• Custom Inspection at their facilities
• May do M (Temporary Import for Ind Processing)
38. OTHER DECLEARERS
Legal Entities & Common people doing X or M
not higher than U$10.000 or U$1.000
Travelers (Baggage)
Turists (Vehicles)
National Post Office (Post Traffic & Urgent
Deliveries)
Urgent Delivery Consignees (Catastrophes)
The State, Territorial Entites,
Diplomats
Transporting Companies. (Cabotage)
San Andres Business Men
39. EXPORTING PROCESS
1. Get the Exporter National Register/RUT
2. Market Research: Potential Buyers
3. MINCOMEX Paperwork: National Producer
Register-Certificate of origin Aplication (2
Years)
4. Get the required approvals (INVIMA –
ICA)VUCE
5. Get the product ready /Approvals/Costing &
Pricing.
40. EXPORTING PROCESS
6. Identify The tariff subsection
7. Negotiation (Get in touch with a buyer)
(INCOTERM)
8. Insurance and Freight Contracting (If
applicable)
9. Send Pro-Forma Invoice acceptance and
Stablishment of Method of Payment
(INCOTERMS)
41. IDENTIFICATION OF THE TARIFF SUBSECTION
It is the number of international identification of products
and it is divided in the following way:
Claveles miniatura
Capitulo 06 Plantas vivas y productos de floricultura
Partida Arancelaria Flores y capullos, cortados para ramos o
0603 adornos, frescos, secos, blanqueados,
teñidos, impregnados o preparados de otra
forma.
Subpartida Arancelaria Claveles
0603.12
Posición Arancelaria Miniatura
0603.12.10.00
42. 10. Shipping Documents
• Shipping Authorization
• DEX (Export Declaration)
• Pro-Forma Invoice
• Commercial Invoice
• Export Packing List
• Certificate of Origin
• Bill of Lading, Airway Bill, Consignment Note,
Multimodal Transport Document
• Licenses, Permissions or Approval
43. 11. DIAN/SIA ERRANDS (DIAN is gonna
Check out the following info):
There are two different types of inspection,
Physical (Merchandise) and Documentary
• Export Mode
• Tariff Subsector
• Description of the Merchandise
• Quantity
• Weight
• FOB Value in U$
• Country of destination
44. 12. VAT payback Inquiry (If it applies)
13. Exporter gets the currencies and
Reintegrates them.(Exchange Declaration
#2) (More than 12 months BR) U$10.000
(Advanced Draft - 4 Months- Ext Debt)
Resident External Debt Info (6) B. Rep
45. FINANCIAL ISSUES OF EXPORTING
• Product Price (Exchange Rts, Insurance,
Transportation, Duties, Wholesale Channels,
Banking, Antidumping)
• Method of Payment (Cash In Advance, Letter of
Credit, Draft or Bill of Exchange & Open Account)
• Financing Recievables (Factoring & Forfeiting)
• Insurance (Transportation Risk – Political,
Comercial & Foreign Exchange Risk)
47. EXPORT MANAGEMENT COMPANIES
• Export arm of the manufacturer (agent)
• Deal with X and M
• Take care of Documents
• Make Transportation arrangements
• Give advise
• Commission or Take title
48. EXPORT TRADING COMPANIES
• Register IND & COM (Duty free purchases)
• Furnisher Certificate (6Mths/ 1year / 6M)
• Work on Demand rather than Supply (Match)
• Identify suppliers who can fill orders from
abroad
49. FOREIGN FREIGHT FORWARDERS
• Import or Export specialist dealing with
movement of goods.
• “Travel Agents of Cargo”
• Provide best routing and means of
transportation (Space availability, cost and
speed) Close relation with carriers
• % of the shipment value + charge/# of
services
51. INDUSTRIAL GOOD & SERVICES FREE ZONE
Promote & Develope the ind process of Goods &
Services aiming foreign Mkts
Special Regimen (Duties, Customs, Exchange & Loans)
Goods & Services: Cartagena & La
Candelaria/Palmaseca y Pacifico/Barran/S. Marta/
/Cucuta/Rionegro/Bogota- Quindio/Cuidadela de la
Salud/Arauca
Turistic & Technological Services: Baru, Tierra
Caribe/Posos Colorados/Centro Turistico Int.
52. EXPORTING ECONOMIC SPECIAL
ZONES (ZEEE)
• Attract FDI & NI with X purposes,
employment, Tech Transfer and Region Dev.
• Buenavntura, Cucuta, Ipiales,Valledupar,
Tumaco
• Benefits in Labor & Tax matters.
• Customs and Tax matters
• Requirements: New Invst, 1U$ M, X 80%
55. EXPORT MODES – DECREE 2685
1. DEFINITE EXPORT (Exportación
Definitiva)
2. TEMPORARY EXPORT FOR PASIVE
COMPLETION (Exportación Temporal Para
Perfeccionamiento Pasivo)
3. TEMPORARY EXPORT FOR REIMPORTING
IN THE SAME CONDITION (Exportación
Temporal Para Reimportación En El
Mismo Estado)
4. RE-EXPORTING (Reexportación)
5. RE-SHIPMENT (Reembarque)
56. 6. URGENT DELIVERIES & POST TRAFFIC
EXPORTS (Exportación Por Tráfico Postal Y
Envíos Urgentes)
7. NON VALUED SAMPLES EXPORTS
(Exportación De Muestras Sin Valor
Comercial)
8. TRAVELER’S TEMPORARY EXPORTS
(Exportaciones Temporales Realizadas Por
Viajeros)
9. MENAGE EXPORT (Exportación De Menajes)
10. SPECIAL EXPORT PROGRAMS (Programas
Especiales De Exportación) PEX
DOCUMENTS KEPT FOR 5 YEARS
57. TEMPORARY EXPORT FOR PASIVE
COMPLETION
• It is the export mode which regulates the
temporary exit of national or nationalized
merchandise from national custom territory,
for transforming, manufacturing or repairing
abroad or in a FTZ.
• Key elements:
– Permanence is determined by DIAN.
– Documents need to be explicit.
58. TEMPORARY EXPORT FOR REIMPORTING IN
THE SAME CONDITION
• It is the export mode regulating the temporary
exit of national or nationalized merchandise from
national custom territory, to attend a specific
purpose abroad, in a fixed term, during this term
merchandise has to be reimported without
undergoing any modification.
• Key elements:
– It follows the same process as a definitive export.
– Normal deterioration is excluded
59. RE-EXPORTING
• It is the mode regulating the definite exit from
NCT of merchandise which were under a
temporary import mode or a transforming and
assembling mode.
• Key factors:
– Temporary import
– Docs: DIM & mandate
60. RE-SHIPMENT
• It is the mode regulating the exit from NCT of
merchandise coming from abroad which are
being stored and have not been legally
abandoned nor undergone any import mode.
• Key factors:
– Chemical substances controlled by Consejo
Nacional de Estuperfacientes are not authorized.
61. URGENT DELIVERIES & POST TRAFFIC
EXPORTS
• Postbags, Mail and Urgent Deliveries with no
higher value of 1000 USD requiring urgent and
fast delivery for their consignee can be
included in this mode.
• Key factors:
– No value higher than 1.000 USD
– Only DIAN authorized companies.
62. NON VALUED SAMPLES EXPORTS
• Simplified DEX has to be presented.
• Those merchandise declared as samples which
total FOB Value does not surpass the limit
established by DIAN.
• Key factors:
– Value no higher than 10000 USD yearly.
– That limit does not apply for coffee and Proexport
samples.
63. TRAVELER’S TEMPORARY EXPORTS
• Export of National or nationalized merchandise
which are taken by travelers going out of the
country and want to be re-imported once they
get back to the country, without payment of
duties.
• Key factors:
– Support Documents: Simplified DEX, passport and
ticket.
– Personal Belongings taken by travelers going out of
the NCT are not included in this mode.
64. MENAGE EXPORT
• In this operation, the personal belongings of a
household unit or family or individual, leaves
the NCT with the intention of living for an
indefinite time abroad.
• Key factors:
– Simplified DEX must be presented and subscribed by the
menage owner or an authorized person.
– Merchandise has to be presented before DIAN together
with a detailed list indicating quantities and description.
65. SPECIAL EXPORT PROGRAMS
• It is the operation in which a person living abroad buys raw
material from a local producer in Colombia, demanding the
merchandise delivery to another producer also living in
Colombia who is contracted to manufacture and export the
goods made out of the raw materials according the
instructions given by the foreign buyer.
• Key factors:
– The raw material or inputs delivery to the final good
manufacturer is considered an Export.
– Final good manufacturer receives the raw material or inputs as a
temporary import.
– The limit term to export the final good is 6 months. It can be
renewed by DIAN just once for maximum 3 months, with a
justification from the interested.
