Export Procedure

Surendra Gongal
[email protected] 9851099691
 Exporting: Introduction
• Exporting is an act of forwarding goods/products/materials and services for payment to another
country.
• Invariable payment against consigned goods for export is settled in a foreign convertible (e.g. US $)
as agreed between exporter and importer.
• Exports may be sub-divided into two :
– Visible - exports goods/products and materials
– Invisible – exports services.
• A person selling goods to a buyer in another country is an exporter.
• An exporter may be a manufacturer/exporter or a Trader/exporter.
– Manufacturer/Exporter: Sells or exports goods produced by him,
– Trader/Exporter: Goods are purchased from internal sources and sells them externally or act as
an agent for a group of manufactures.

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 Stages in Exporting:
Registration of a Firm/Company

• Export can be undertaken by a registered firm/company.

• Proprietorship's and partnership's firm registration – application is to

be submitted to Department of Commerce (D0C) in Kathmandu or
– it's offices in Biratnagar, Birgunj, Bhairahawa, Nepalgunj and Dhangadhi.

• Private or Public limited company - application should be made to -

Company Registrar Office in Kathmandu.

• After the approval, A Firm/Company Registration Certificate is issued

by the mentioned respective office.
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– This allows the approved company/firm to enter into export business.
 Register a Company
Set up a public company or a private company?
Private companies are those where number of shareholders cannot exceed 50 and they cannot invite general public for share subscription.
If you want to set up a Private limited company, first you will need to register your company’s name at the website of Office of Company
Registrar. Visit http://www.ocr.gov.np/index.php/en/ to request reservation of unique name for your company. Additional details can be found
here: https://www.ocr.gov.np/CRO/resources/Manual/New%20Registration.pdf. After approval-
– Submit an application form along with NRS 5 stamp
– Two copies of Articles of Association
– Two copies of Memorandum of Association
– Attested copies of citizenship certificates of founder shareholders
– Registration fees will depend on the size of capital investment.
Public Companies are those that have - Minimum 7 shareholders; Minimum paid up capital of NRS 10 million; May offer shares to public at
Nepal Stock Exchange under Company Act and Securities Act; A Company carrying on business of banking, financial transaction, insurance
related transactions, a stock exchange, pension or mutual fund, or any other related business or transactions must be incorporated as a public
limited company.
If you want to set up a public company, first you will need to register your company’s name at the website of Office of Company Registrar. Visit
http://www.ocr.gov.np/index.php/en/ to request reservation of unique name for your company. Additional details can be found here:
https://www.ocr.gov.np/CRO/resources/Manual/New%20Registration.pdf.
– Thereafter you will need to submit following documents there:
– Application form along with NRS 5 stamp
– Two copies of Memorandum of Association
– Two copies of Articles of Association
– Attested copies of the citizenship certificates of the founder shareholders
– Copy of agreement made among founder members
– Registration fees will depend on the size of capital investment.
 Register a Firm
If you want to set up a firm instead of a Company, you will either need to register
with Department of Commerce, Department of Cottage and Small Industries or
Department of Industry.
• For sole proprietorship business or a partnership firm, either visit Department
of Commerce (in case of commerce related firm), Department of Cottage and
Small Industries (for cottage firms), and Department of Industry for other
industries.
Submit an application form to the relevant government agencies along with:
– Name of private firm
– Address of firm
– Objectives, functions and particulars of goods or commodity to be transacted by the
firm
– Identity proof of proprietor/partners (citizenship or passport)
– Restrictions imposed on partners (if any)
– Type of partnership and capital subscribed by various partners (for partnership
companies)
– Mode of profit distribution of partners (for partnership companies).
Company Registration
Certificate 6
 Income Tax Registration
• A registered firm/company is required to be enrolled with a local tax office.
• After completing necessary formalities, an Income Tax Registration Certificate is
issued by the tax office.
• To carry on the export business, the Income Tax Registration Certificate must be
renewed annually within first three months of each fiscal year.

• Tax registration takes place at the Inland Revenue Department. Fortunately, all necessary
processes can take place online.
• To apply for PAN and VAT registration, person or company must use Inland Revenue
Department website (www.ird.gov.np) and select Taxpayer Portal.
• Expand Registration for PAN, VAT, Excuse and click on ‘Application for Registration’.
• Submit details as required including Business Registration Date, Registration Number, Place
of Registration, and date of commencement of Business, Citizenship/Passport of CEO or
Managing Director.
• Recommendation letter from local Chamber of Commerce. 7
http://www.ghalegroup.com/contents/113
/Customer-Service.html#

Income Tax Registration 8

 VAT Registration
• VAT Registration is required if a manufacturing/exporting
firm/company wants duty drawback facility on the
import/purchase of raw materials and intermediate goods
imported/purchased for the production of export goods.

• This duty draw back facility will reduce the cost/price of the
goods for export and thereby to be pricewise competitive in
international market.

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VAT/PAN Registration Certificate 10
 Obtain EXIM Code
Traders (both exporters/importers) are now requested to obtain an EXIM Code before pursuing trade.
The Code is now issued by Department of Customs. In order to obtain Exim Code, you will need to
submit the following documents to online portal at the Department of Customs website:
• Application form (downloaded from website)
• Company/firm registration Certificate
• PAN Certificate
• VAT Certificate
• Special certificates (if required)
• Recommendation from bank where applicant has account
• NRS 300,000 cheque deposit issued by a Class A bank certified by Nepal Rastra Bank
• Recent photograph
• Map of the enterprise
• All documents must be scanned and deposited in the EXIM Portal in the Department of Customs
website at: http://110.34.28.82:8484/ and a physical copy must be mailed/submitted to the
Department of Customs. The Code will be issued one week after the complete submission of
application.
 Opening of Current Bank Account
To conduct trade transaction, it is required that a registered firm/company opens a current account
with a commercial bank.
– Name of the Company/Firm;
– Address of the Head Office;
– Telephone number/Fax number (if available);
– Company/Firm Registration Certificate;
– Photos, copies of citizenship cards and details of Board of Directors/Partners; and
– Authorization letter from the Board/Partners. Depending on the bank, it might take around 2-5 working days to open a bank account after
documents have been submitted.
A separate account of the foreign currency having both the exchange rates (i.e. buying as well as selling rates) fixed by
Nepal Rastra Bank can be opened in a commercial bank to retain the earning from exports in convertible currency.
You will most likely receive payments either via Advanced Payment or Letter of Credit. You will need to approach
Foreign Exchange Division of your commercial bank of choice and inform them about your possible incoming payment.
For transfer of income via letter of credit, you will also need to submit documents prescribed in the conditions of the
letter of credit which will most likely include:
– a) Bill of Lading;
– b) Certificate of Origin;
– c) Commercial Invoice;
– d) Pro-forma Invoice; and
– e) Packing List.
• Foreign exchange regulations dictate that you will also need to fill BiBiNi 1 and BiBiNi 2 and submit it to the
concerned commercial bank. Banks normally charge less than 0.2 per cent of total invoice value as commission fees,
and the process can take up to 5 working days.
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 Product for Export
• For a manufacturer, a number of products may be available
for export if there is an export marketing potentiality.
• For a trader, it is necessary to obtain a contract with a
producer to fulfill an export demand.
• The choice of products is extensive but a careful selection is
required so that export becomes a profitable enterprise.
• New products may also be developed by use of imagination
and creativity according to customer's demand and prevailing
market situation.

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 Market Selection
• It is necessary to identify probable buyers and target market.
• Markets are selected by Research and Analysis.
• Trade and Export Promotion Centre assists in providing Market Analysis
Training, Market Information and Market Counseling.
• Market research reports containing potential market's in-depth market
information on physical, social, political and economic environments, import
statistics, market access, social and consumer preference, competition,
competitors prices and quality can also be available in these organizations.

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 Contacting Potential Buyers
• The simplest method - Introductory Letter.
– Introductory Letter which should be designed to create a favourable impression
– Should include and attach details of the product its specification, delivery
terms, price and attractive promotional literature.
• Quickest transmission of the messages - E-mail, telephone, fax, cable
– Fax and e-mail are now very popular and in practice worldwide.
• Other methods of contact with potential buyers - Publicity in newspapers, journals,
magazines, internet, audio visual etc.
• Very popular method of contacting and locating foreign buyers - Participating in
national and international trade fair, exhibitions etc.
• TEPC, FNCCI, and its member associations – can arrange meetings and
appointments with these buyers and members of the delegate.
• For a volume of export - Agents or Representatives in target markets may be
required. 15
 Establishing Contact
• After correspondence, a buyer may forward a purchase order
(PO).
• PO contains details of the required
– products, quantity, price, terms of payment, packaging, mode of
delivery and scheduled date of the shipment of export
consignment.
• After a detailed examination of the order, it is confirmed by
the exporter and a export contract may be signed.
• Generally product samples are required with a pro-forma
invoice prior to receiving a confirmed order.
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 Pro-forma Invoice and Prices
• A Pro-forma invoice indicates the price (FOB, C&F, CIF etc.) and
other details allowing the buyer to open a Letter of Credit (LC) in
favour of exporter or Advance Payment.
• According to prevailing regulations LC or Advance Payment may
only be used for order exceeding US$ 1,000.
• Product prices should be reasonable and competitive.
• Normally, internal duties and taxes are exempted on exports and
duty drawback is applicable on the import of raw materials and
intermediate goods for the production of export consignment.
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 Productions of Goods
• Once the confirmed order is received, the next step is to
arrange for the production of the goods for export.
• During production and packing, the specifications of the buyer
are to be strictly observed.
– Specification - relates to size, design, color, quantity, packaging,
marking and labeling.
• To achieve punctual shipment and delivery, careful monitoring
of all the steps of the production process is essential.

Exporting Procedure 19
 Documentation
Documents to be prepared and presented for export to third country air freight include:
– Commercial invoice
– Packing list
– Certificate of origin
– GSP certificate -if applicable
– Photocopies of LC or advance payment statement received from the bank
– Foreign exchange declarations form of Nepal Rastra Bank
– Copy of Firm/Company Registration Certificate
– Copy of income tax registration/renewal certificate
– Separate certificate for specified products like forest based, agri, handicrafts items of no archaeological
value, readymade garments, bone & horn products etc.
– Value certification from the Handicrafts Association of Nepal for handicrafts and silver products
– Letter of authority to clear the consignment
– Transport manifesto (for sea cargo)
– Customs transit declaration (for sea cargo)
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– Transit declaration invoice - export-for Bangladesh transit (for sea cargo)
 Appoint a Freight Forwarder
Freight forwarders are professionals (individuals or companies) who specialize in shipments from your factories
till the importers’ doorsteps.
• Well versed with all export/import related procedures
• Chargeable Fee (which can range from NRS 10,000 to NRS 30,000 depending upon nature of your export
consignment), will
• Complete your documentation and all shipment related requirements.
• Have strong logistics network and will arrange different modes of transportation for shipping your items and
will also handle other official responsibilities like clearing your goods from customs and ports, and paying
duties at customs.
– Pro-forma invoice
– Commercial invoice
– Packing list
– PAN/VAT certificate
– CO/GSP
– Firm/company registration certificate
– Letter of Credit
– Appointment letter of customs agent

Appoint Transporter
• To move your consignment from your factory premises to your choice of Customs office. Depending on your choice of port and the nature
of your goods, the transport charges can vary from NRS 8,000 (for transporting till Tribhuvan International Airport from Kathmandu) to
NRS 25,000 (for transporting to Birgunj) to NRS 50,000 (for transporting to Kakarbhitta). You can also approach a Freight Forwarder to do
this job for you.
 Appoint a Custom Agent
• Customs Agents help you clear customs when your goods enter
customs premises.
• Suggest you find a permanent Customs Agent to assist you with
your customs related operations.
• Number of Customs Agent offices near Customs office premises
near related Customs Office.
• More appropriate choice of action would be to find a Freight
Forwarder who will already have a selected choice of Customs
Agent not only in Nepal but also across Cross Boarder.
 Customs Clearance
• After all documentations and packing of consignment, it is to be
cleared by customs.
• On completing the procedure of the Customs Declaration Form
(Bhansar Pragyapan Patra) and other export documents, the goods
are examined, documents are verified and endorsed.
• And then the consignment is cleared for shipping.
• You will have appointed a Customs Agent or a Freight
Forwarder for clearing your goods at the Customs. Export
charges are not applicable for exporting items from Nepal.
Inspecting charges amount to less than NRS 200 and loading
and unloading charges will be applicable during process of
transshipment inside Customs.
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 Automated Process Asycuda World
• Broker Fill up BPP
• Assessment Officer Assess the Declaration
• Inspector checks goods and write comment on Inspection Act
• Officer review Inspector comments and take action
accordingly.
• Officer reroutes the SAD to Been
• Bank Collects Revenue of the SAD
• Inspector / Officer generates Exit note.
• Vehicle exit from the Customs premises
Bhansar Pragyapan Patra
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HACCP (Hazard Analysis and Critical Control Point) certification

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CITES - Convention on International Trade in Endangered Species of Wild Fauna and Flora Certificate

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CITES - Convention on International Trade in Endangered Species of Wild Fauna and Flora Certificate

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 Shipment
• The terms and conditions in the sales contract determine the method of shipment.
– A reliable shipper can ensure correct shipment and delivery.
• When goods are consigned by air, booking will be required with a reliable air carrier
or agent.
– An Airway Bill is issued when the consignment is booked.
• For Sea Cargo, goods is transported through transit routes to the ports in India or
Bangladesh.
– Procedures of transit agreements are observed for smooth and unhindered transportation of
the consignment for export.
– Special documents are prepared and endorsed at customs exit/entry points.
– Goods are normally transported by closed rail wagon or container truck.
– On arrival at the dispatch port, dock customs undertakes clearances before shipment. Shipping
agent books cargo space and arrange shipment.
– After loading of the cargo aboard a vessel (ship), a Bill of Lading is issued.
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Export to Tibet and India normally takes place through land route by
truck.
• When transport is booked, the transport company issues a
consignment note.
• Internal destinations in India are normally served via rail route and
a railway's receipt is issued after goods are booked on Indian rail.
– Freight charges are not payable by an exporter when a FOB
contract is in force.
– For C&F and CIF contract, freight charges are payable by the
exporter.
• CIF contract also requires a suitable insurance policy.

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 Payment
• Original copies of all export documents are required by the
buyer to effect clearance and delivery at the entry point of
importing country.
• The documents are submitted to the bank.
• If shipment is in LC terms, the bank credits the account of
exporter with the amount of export earning after LC
negotiation between exporter and the bank.
• Advance Payment terms require dispatch of documents to the
buyer directly.

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 Follow up
• After completion of the delivery, the buyer should be
contacted to determine
– Performance of the product and
– Consumers reactions.
• This information assist with the improvements in
– Quality, size, packaging, colour and labeling etc.
• Follow-up is required to obtain additional or re-order.

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Thank You

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