How To Start Import And Export Business In Pakistan

Pakistan is an under developing country. It has a low-frequency job rate. Jobs in Pakistan are less and demand a high qualification. Underfortunality, the majority of the public is powerless and can not afford higher education. So the unemployment rate is increasing day by day. To help the public for survival, the government is pushing them towards business. There are several businesses that a person can do to run his family peacefully.

Nowadays, the import and export business is getting its fame among the public. Pakistan is an agricultural country, so it can export a large number of products to the world. This business is growing at a fast rate in Pakistan. You can start it with a little investment. The import and export business is suitable for those who love traveling. This business also has an adventure in it because people get a chance to travel.

A nation has to cooperate with other countries for its survival. Import and export are key factors in raising the economy of a country. Natural sources, production, and development vary from country to country. To meet the needs of life, governments have to cooperate with each other.

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They should promote import and export business to the level they can.

In this article, we will tell you briefly how you can start your Import or Export business in Pakistan. But before that, let's get to know what are imports and exports in the language of a layman.

Imports

Import is a process in which an individual or country buys products from another country. Countries import things that are not found in their own country or have a deficiency.

Pakistan imports fuel and mineral oil. It is approximately 30 % of the total imports. Machinery, nuclear reactors, and electronics are 9% of the imports. Other imports include iron, steel, organic chemicals, and plastics, etc.

As an importer, the most challenging thing is to clear the product from the custom branch. To overcome the problem, contact the clearing agencies. Clearing agencies help you to compile the documents. When products have arrived at the custom, they allot an import general manifest number to the shipment. With the help of this number, one can locate its products.

Exports

Export is a process in which an individual or organization sells products to other countries. Pakistan exports textiles, carpets, rugs, and sports items. In the food industry, Pakistan exports vegetables, ghee, fish, fruits, rice, wheat, and seafood. Also, Pakistan exports surgical instruments, leather, and dairy products to the world.

The procedure for imports and Exports

The procedure for imports and exports is as follows.

Documents for Imports and Exports

The most important factor in import and export business is documentation. There are four types of documents in imports and exports business:

• Commercial Documents
• Financial Documents
• Government Documents
• Transport Documents

Commercial Documents

The exporter prepares these documents with the aid of companies. These documents are:

Trade Enquiry

It is the first step in the process. Trade inquiry is a report written by the buyer. The buyer writes all the details in this report. This report includes product description, quantity, size, and weight, etc. It also contains the delivery timing, packing, and receiving of the product.

Contract of the product

It is the contract between the importer and the exporter. The exporter makes it with all the product details. It includes all the details relevant to the product and order.

Invoice proforma

The exporter provides this performa to the importer. It includes all the details of the shipment. This performa should have product weight, size, and quantity. The importer receives the performa and arranges the amount of the product.

Packing List

It is also known as PL. It contains the product's comprehensive details of shipment. Details include the packing arrangement, product packing style, and dimensions of the products. The Packing list also consists of the weight and the serial number of the product.

Inspection Certificate

The next step after the packing list is the inspection certificate. The buyer requests the exporter to inspect the packing from a company. The company ensures the quality and quantity of the product according to the contract. After the inspection, the company issues an inspection certificate. Exporter provides the inspection certificate to the buyer.

Insurance Certificate

The insurance certificate is very important in imports and exports business. The insurance company issues this certificate. It ensures the loss or damage recovery to the merchant during the transport of goods from one place to another. For quality and successful business, insurance of business is necessary.

Health Certificate

Another certificate that is a health certificate is issued. The food ministry issues this certificate. They check the products thoroughly according to health. They issue the health certificate if the product is not harmful to humans. It is essential in the case of food items.

Laboratory certificate

Authentic laboratory issues a laboratory certificate. Laboratory subjects the product into a number of tests. The laboratory performs several tests on quality, items used in the product, and safety of the product. After satisfaction, the laboratory issues the laboratory certificate.

Photosynthetic Certificate

When plants are exported, the photosynthetic certificate is attached to them. This certificate justifies that plants are free of pests and diseases. It is clearly mentioned in the certificate that plants are healthy. In Pakistan, the Ministry of National Food Security and Research issues photosynthetic certificates. The photosynthetic certificate is issued after observation and experimentation of the plant.

Fungal Free Certificate

A Fungal free certificate is issued in the shipment that contains wooden packing. Products having wooden packing carries more risk of fungus growth. This certificate is issued after the observation of complete packing.

ATA Carnet

It is also known as a passport of goods. It is an international level document. Besides, it provides duty-free import and export for a particular time. This document also allows tax-free import and export.

It is beneficial for large organizations and merchants. It makes the import and export easy.

Commercial Invoice

The exporter generates it. In this document, the exporter demands the payment of the products. The payment is demanded according to the rules and regulations of the sales contract. This document is also used in the customs clearance. Customs duty can be easily cleared with this document.

Financial Documents

The documents used in the financial purpose are known as financial documents.

The financial documents are as follows.

Bank Account

An active and current bank account is required. Bank account helps in the safe and easy transfer of money. Bank account makes the money transaction reliable for both importer and exporter.

Bill of Exchange

It is a document, which is required in international trading. This document is issued to the importer. It demands the importer to pay the amount of product to the exporter within a specific limit of time. Three parties are involved in the bill of exchange. These parties are the drawer, the drawee, the payee.

Promissory Note

It is the evidential financial document. It is evident to the importer that he paid the amount to the exporter. A promissory note is a similar document as an exchange bill. The only difference is that bills of exchange have three entities and promissory notes have two entities.

Letter of Credit

A letter of credit is a bank document. The bank of the importer issues it to the bank of the exporter. A letter of credit ensures the transaction of the amount on behalf of the importer. It has great value in the business of import and export.

Form E

It is an export form. The bank issues form E. Exporter attaches this form with goods. After export, this form is referred to as Foreigners Exchange Regulations.

Government Documents

In the import and export business, the documents that need government approval are known as government documents. The government documents are as follows.

National Tax Number

The National Tax Number is also commonly known as NTN. The sales tax department of Pakistan issues it. NTN is required for the import and export business. It is issued once for any business.

Sales Tax Registration

The exporter does not need sales tax registration. In contrast, the importer needs it. The importer gets the sales tax registration from the sales tax department of Pakistan.

Chamber Membership

For starting the import and export business, one should register its trade company or organization to the chamber of commerce and industries. After the registration, the chamber of commerce and industries issues the membership certificate.

Import and Export license

Certain imports and exports need a license in Pakistan. Mostly imports and export licenses are not needed in Pakistan. Exports do not need any license at all. For imports, sales tax registration works as an import license.

Import and Export Declaration

It is the document prepared for the director of the customs. It contains all the information relevant to the product. The information includes the product name, quality, quantity, shipment, and delivery place. It also contains the product receiving date and time and the final destination of the cargo. Import and export declaration documents are further used in trade statics.

Certificate of Origin

The chamber of commerce and industries issues the certificate of origin. This certificate ensures that the products being exported are manufactured within the country. The chamber of commerce and industries issue the certificate after the satisfaction.

Transport Documents

The documents that are necessary for the transportation of imports and exports are known are transport documents. The transport documents are as follows.

Shipping Document

The shipping document contains all the shipping details. It includes details of product weight, size, and dimension. The shipping document is further used in documentation.

Bill of Lading

It is an international import and export document. Bill of lading is a contract between the exporter and the cargo company. Bill of lading confirms that the shipping company has loaded the exporter's product on the cargo. It can be used as loading proof.

Airway Bill

The airway bill is similar to the bill of lading. The airway bill is formed when the export is through air cargo. That is only a single difference between the bill of lading and the airway bill.

Documents Checklist

The following are the documents that you will need before you start your import or export business.

Importer Documents

There are a few documents that you will need for the imports. These documents are as follows.

• National Tax Number
• Bank Account with details
• Chamber membership from the chamber of commerce and industries
• Sales Tax Registration from the sales tax department

To import any product in Pakistan, the importer should have all the above documents. You cannot start the business of imports without these documents.

Exporter Documents

To export anything from Pakistan, you will need the following compulsory documents.

• National Tax Number
• Bank Account with details
• Chamber membership from the chamber of commerce and industries
• Sales Tax Registration from the sales tax department
• Certificate of origin from the chamber of commerce and industries
• Commercial invoice
• Packing list with a comprehensive detail of product exported
• Letter of credit
• Form E

The export business does not require any license, but you will need all the above documents for proper export business.

Steps to have successful import and export business

To have a successful import and export business, keep the following points in mind.

• Research your business category. Do as much research as you can. You should know the value of your business, its market, and the profit of your business.
• Select a suitable mode of marketing. You can do marketing through direct selling, hiring an agent, giving distribution, or starting a partnership with a company.
• To regulate the effective traffic towards your business, use social media apps. Promote your product or company by using social media. One should have an attractive appearance to promote his business. Provide good guidance to the customers.
• Always try to move forward. Use techniques that are effective for your business. For moving forward, build your standard.
• Try to have projects and contracts with new companies. Always start a new project with a reliable person.
• Manage all your documents in a better and professional way.
• Be professional.
• Always use legal ways to access documentation and goods.

So now you know all the basics to start import and export businesses. While you will do exports, you will bring foreign exchange to the country. Also, you will provide employment to the people of Pakistan by manufacturing goods. In contrast, if you do imports, if you crack a good deal with foreign companies, it will benefit the people of Pakistan. This way, people will be able to get quality products in their local markets at a reasonable price.

So we can say that whatever you do in international trade will benefit our country a lot.