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Basic Concepts of Import & Export

Q: What is Business?
Ans: 1.An activity
2. with an intention
3. for earning profit

Q: What is organizational structure of business?

Ans: The organization is the community of people where everyone works to achieve their aims and
goals.
The “Business Organization” is the community where the goal is profit. There are 3 types of
business organizations:

1. Sole proprietorship (The business which has only 1 owner, e.g. grocery store, fruit seller and
any shopkeeper)
2. Partnership (The business which has more than 1 owner, they are collectively called
partners, they share the profit of a business carried by all or any of them acting for all)
3. Joint Stock Company (The company is an organization:
a. which is registered under Companies Ordinance 1984,
b. Where general public invests its investment in the shape of SHARE and collect the profit
as DIVIDENED), and
4. Corporate (The Company which is registered under any other law)

Q: How many types of business according to “INVENTORY”?

Ans: There are 3 types of business according to “INVENTORY”
1. Trading Concern
2. Manufacturing Concern
3. Services concern

The business have different fields i.e. Management, production, Import & Export department but to
deal with all we need some finance.

Finance is inflow and outflow of money. To keep record of the money we need some measures and
standards. These standards are being provided by the Financial Accounting.
 (2)
How to register you firm in Pakistan
1. Verify your desire name from scci
2. Apply ntn
3. Export account
4. Scci memebr ship
5. Tdap association & membership

Important/siginficant

1 the firm name is so easy in pronunciation

2 firm names should be start from a, b
3 names should be non-Muslim like European
4 name should have proper mean
Perl hit
Black hill

Bhi
Anb industries
Anb manufacturing
Anb international

Three word logo

Verification of your desire name from scci

National tax no
Ntn
That no which provide by the govt to the businessman for doing local
international business.
Your tax no is one time for export
If the person start another business
Then NTN will be same but the new business added in old ntn
Note it’s very important for doing business
How to apply
Get from nearer tax office \& fill it correctly with capital words
2. Copy of nic
3 stamp of company
4. Get ntn after 4 working days from office free of cost.

Benefits

Without it you can’t do local and international business so you can’t get
money properly

After getting NTN you will become the tax net of govt so you can avail get
the benefit from govt as new comer of businessman
2. Without it you can’t go to abroad for attending the fair/exhibition
industrial business
3. Without it you can’t register your firm in pakistan.

Export a/c/ bank account

That account which you receive any

sort f/c from any part of the country
which converted into pak rupees
according to bank rate that is called
export account
1 Savings a/c
2 Fixed a/c

Current account = export account

How to apply
1. Find the reputed bank of city
2. form + 1 witness of that bank a/c holder bank
3. minimum amount for opening of an a/c
4. Request letter on your letter head
5. Copy of id card +ntn
6. Stamp of company + 1 pic
7 partnership deed + form “c” all
+ntn+ all cnic copies if firmed is partnership based
 Export a/c one of the significant procedures of the registration of company in
Pakistan
 Without this you can’t get bulky orders payment
 Without this you can’t register your firm properly
+can’t get the scci + association membership

 Without this you can’t get form “e” which used in bulk order and without form
e custom cannot proceed your shipment

Scci

Sialkot chamber of commerce and industry

Sialkot city
Chamber= control department tower
Industry= manufacturing unit

FPCCI
Federal pakistan chamber commerce ind

Scci
That department of the city which control the
trede(imp+exp+manufacturing units and solve the all problem as well as
make such policies of trade(imp+exp) of that city that called scci
 How to apply firm registration
How to apply

 Form + fee
 Copy of ntn +export a/c+cnic
 2 witness of the same class of the scci
 Request letter on the letter head
 1 pic+ stamp of company
 Partnership deed +form c + all ntn

Benefit
1. Free importer address
2. Free help assistance help regarding trade
3. Free library
4. Free bulletin
5. Visa recommendatory letter
 (3)
Association’s membership
-That department which provides you very specific Information regarding your business
that is called

E.g
Gloves
Leather
Surgical association Importer exporter address
Exhibition
Chamber+ association
Same to scci

Gloves association

Jacket association

Surgical Association
Trade development authority of Pakistan
Business boosting
Export imp
Exhibition fee
Exhibition subsidy
Visa recommendation

TDAP definition
That Govt department which boosts your business as well as makes the new polices and
held the fares exhibitions in the various country where Pakistani products are not going
well that is TDAP

How to register firm in uae

1. Find a good Arab or kafeel

2. Find good place/apartment
3. Verify firm name from scci
4. Apply in municipality of the city for noc and fixed board of the shop
5. After NOC,then apply for trade liecence in CCI and municipality +apply for p.o.
Box#
6. Apply in the immigration for immigration card
7. Then clear the amount of the kafeel
8. Apply 3-4 visas on one trading licensee
9. Do business \& live happily

How to register firm europe

1. Find a good lawyer and make agreement with him/ her and also define
registration fee with lawyer
2. Find a shop /apartment through lawyer
3. Give your Pakistani firms doc to the lawyer
4. Lawyer will get the NOC of the your desire name of firm from cci& also
with apply vat
5. Then lawyer will get permission for doing business in europe country
6. After clearance all these procedure lawyer
Will get him/her all fee and apply your visa/work permit and then apply
police card
7. Investment ministry and from ministry of commerce
 (4)
Invoice
That paper on which you write the compete detail of your business goods that is called invoice, it is
very important in business and without this you can’t manage your product`s detail in well equipped
manner. You are importer or exporter, without this you can’t do business well. Invoice has following
main kinds which are under noted below:

1. Simple Invoice
2. Order Performa invoice
3. Custom Invoice

Simple Invoice:

That invoice usually and mostly used in the local retail shopsE,G you go in the market and purchase
some items/ shopping than shopkeeper take a paper book and write the detail of your shopping
items and than finalized the bill of your shopping that is called the simple invoice. In other words you
can be called it as retailer`s invoice.

PERFORMA INVOICE

When exporter & importer agrees and finalized all the terms of business orally than Exporter writes
the complete detail of the order’s goods on the paper like the delivery of the goods, price, packing,
shipment address etc with the company`s stamps and signature on the paper and sends to importer
by fax/ Email. Buyer reads this and resend back to exporter after signature and stamp and confirmed
the order finally and after receiving the payments of the order. Exporter starts the production and
then send to buyer by Air/Sea.

That paper called Order Performa Invoice. And short form mostly customer use this in OPI

CUSTOM INVOICE

Whenever the exporter ready the shipment and send to custom than exporter writes the complete
detail of his order`s goods in all the parcels on the paper that is called custom invoice. Custom invoice
is too important because after custom clearance. Custom house stamped on it and then later on this
custom tested invoice use in bank, customer. Insurance and rebate department
 (5)

Terms of delivery in international

business
The term in which
exporter/Manufacturer sends the
shipment to consignee that terms
are called terms of delivery. The
most important are under noted
below.
 CIF
 C&F
 FOB

CIF
CIF stands C=COST,I=INSURANCE,F=FREIGHT, mean, such Delivery term in which
exporter /Manufacturer pays the cost of goods, its insurance and also freight
(by Air or by Sea) and then add his profit % and give the price to
customer/buyer. That is CIF Term of delivery. The formula of CIF is:
Cost+ insurance + Freight + Packing + Expense + Profit% = Total
1% On cost (per pc) (2% on cost) ( 2% on cost)

C&F
C&F stands C = COST,F=FREIGHT. Means, such delivery term in which exporter/
Manufacturer pays the cost of goods and also its freight of(By Air Or By Sea) and
Then add his profit 20% and give the price to customer/ Buyer. In this term
exporter does not take insurance of the goods and importer /buyer himself take
the insurance of goods in his/her country. That is called C&F Term of delivery
Cost + Freight + Packing + Expense + Profit% = Total
( per pc) (2% on cost) ( 2% on cost)

FOB
Fob Stands F=FREE,O=ON,B=BOARD. Board mean plane whether airplane or sea
ship.
Mean such delivery term in which exporter/ manufacturer pays the cost of goods & also
Its local freight charges for going to air port/sea port and then add his profit 20% and
give the price to customer/ Buyer.
In this term exporter does not take any insurance of the goods as well as not pay the
freight. Customer/buyer himself takes the insurance as well as freight of goods in his
/her

Country. That is called FOB Term of deliver. The formula of FOB is:
Cost+ handling +packing+ expense+profit20%=TOTAL
 (6)
Different types of terms of payment in International Trade.

Advance payment

• The customer sends money first to the exporter.

• The exporter checks that the money has been received.

• The exporter sends the goods to the customer.

The exporter may request advance payment because (for example) they are unwilling to send unpaid-for
goods to the buyer’s country because of some risk over payment. The buyer may agree to pay in
advance because they want to induce the exporter into an established relationship.

If advance payment is agreed, the buyer sends the payment before the exporter consigns the goods for
delivery. The exporter sends off any documents that the buyer will need (e.g. original bills of lading,
export licenses) after handing the goods to the carrier or carrier’s agent.

Letter of credit.( L.C.)

A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received
on time and for the correct amount. In the event that the buyer is unable to make payment on the
purchase, the bank will be required to cover the full or remaining amount of the purchase. Due to the
nature of international dealings, including factors such as distance, differing laws in each country, and
difficulty in knowing each party personally, the use of letters of credit has become a very important
aspect of international trade.

CASH AGAINST DOCUMENT

A payment arrangement in which an exporter instructs a bank to hand over shipping and
title documents (see document of title) to the importer when the importer fully pays the accompanying
bill of exchange or draft. Also called documents against payment.
 (7)
SAMPLING

A good sample plays a very vital and significant role in the field of business for the Permancey of the
customer as well as leads a good and favorable order form international buyer or local market buyer.
Because buyer can judge from sample that if sample looks like fine then what will be the condition of
the order`s goods.

So in business sample is 1st step for creating the nice, well impression
on the customer, so, that’s why we can say that a sample must have
the following

Characteristics which are under noted below:

 GOOD MATERIAL
 GOOD WORKMANSHIP
 GOOD OUT LOOKING
 GOOD PACKING
 GOOD PRICE
 GOOD WAY OF POSATGE

GOOD MATERIAL
1ST Of all when you send sample to any customer, you should purchase material for sample himself, by
this you can know the material`s rate, quality etc Because if you will go to maker or trader than they
must use the material less quality for getting more and more profit, so you should purchase by
yourself in the market material is main stepping stone for good sample.

Good workmanship
Workmanship mean (MAKING STYLE) you should make /stitch the sample from a skilful person.
Because if stitch /making will be good, sample look like good nice

Good out looking & good packing

If you go bazaar, you can see most of the item made by china and its fully assure that the life of
Chinese products not so long but out looking + packing of the Chinese product`s not so long but the
out looking +packing of the Chinese product`s not so long but the out looking + packing of the Chinese
product is excellent .that why most of the users/ buyers attract from packing and purchase it
LAST WORK OF NOTES
SO YOU SHOULD adopt this formula that your products out looking +packing must be goods and fine
as well as quality of the goods also should be excellent .so, you can present/survive in the market very
long time.

Good way of postage

In sampling you must consider that what the better way of postage is. for example if your customer
demands urgently and you send the SAMPLE BY SEA OR SIMPLE GPO post than how can you get order
from buyer.so,after completion/manufacturing of samples than you take the proper service of the
postage and send the sample to buyer. The the following are the ways /services for sending the
sample to customers which are under noted below:

a) Courier service(DHL,TNT,FEDEX,UPS)
b) EMS(GOVT COURIER)
c) REGISTERD POST BY GPO

If you send sample of 1kg by service-A-than your sample can be reach to any part of the world
within 96 HOURS (3-4 DAYS)
If you send sample of 1kg by service-B -than your sample can be reach to any part of the world
within A WEEK

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CUSTOM DOCUMENSTS
 For exports goods
When exporter ready/ make the shipment then exporters calls his/her Cargo Agent.
And his/ her agent take the goods and send to the dry port (Mean custom House) for
Custom. The cargo agent which documents demands that is called cargo documents or
Custom documents. The detail of documents as given below:
 Invoices 8-10 copies
 Packing list 8-10 copies
 Form “E” set Tested by bank
 (1 set contain 4 same paper called original, duplicate, triplicate & quadruplicate ) 1 set
 Copy of NTN (company‘s NTN if partnership based) 1 Copy
 Copy of CNIC 1 copy
 Copy of sales Tax (if you have) 1 copy
 Declaration on your letter head for anti-Narcotics

When you will send the shipment/ goods to custom House with these documents then with2-3
days the shipments will be forward to port (Air or Sea) and send back to the documents after
attestation with AWB or B/L from custom to Cargo agent again for further process.

What is the mean of AWB B/L

AWB mean Air way bill, if your shipment will be forward by air, from any international airport and
B/L mean, bill of lading, if your shipment will be forward by sea.
 (9)
In Pakistan Form E or E Form stands for Export Form which is issued by the Bank at the
time of export to client. It’s a declaration that this export is being processed against the foreign
exchange either it has arrived in the exporting country or is contracted to arrive after shipment
maturity. Form -E is issued to the shipper from his dealing bank and Bank also provide him the
following supporting documents to obtain bill of lading from the shipping carriers; Normally the
payment is released to the shipper or exporter when the Bill of Lading or Airway bill is issued for
the goods being exported.

1. NOC
2. C&F Certificate
3. B/L Issuing Authority Letter

NOC:
No Objection Certificate (NOC) is issued when the shipment is being export against 100%
payment in advance and bank issue this NOC to shipper to consign the shipment directly to
consignee.

C&F Certificate:
This certificate is issued when the shipment is processed on the basis of C&F incoterm.

B/L Issuing Authority Letter:

This certificate is issued when the shipment has to move By Sea. In case of By Air export
shipment; this certificate is not issued.
 (10)
CUSTOMER DOCUMENSTS
When shipment forward from custom to the port (airport or seaport) then custom sends the
shipment documents with custom clearance stamped as well as AWB or B/L to the cargo agent
of exporter.
Cargo agent informs to exporter that come to the cargo office and collect the documents of
shipment.
And if exporter has received the documents then he will forward the shipment documents to
customer directly for releasing the consignment from port. The detail of that documents are
under noted below:

 AWB or B/L 1 st Original

 COMMERCIAL Invoices 2 Copies
 Packing list
 Certificate of origin(if you send shipment to Middle east, get it from
CCI 1 st original copy
 GSP(if you send shipment to EU get it from any TDAP office

1 st original copy
 Insurance certificate 1 st original copy
 (10)
GSP definition
The Generalized System of Preferences, or GSP, is a preferential tariff system which provides
for a formal system of exemption from the more general rules of the World Trade Organization
(WTO), (formerly, the General Agreement on Tariffs and Trade or GATT).
 (11)
BUSINESS VISA GENERAL REQUIREMSTS OF EU & MIDDLE
EAST
There are many kinds of visa of every embassy but we take a detailed look on the
Business kind visa. And we also study of its general requirements which mostly same
Of the every embassy if you want to get business visa for going to business meeting
With your buyer or business marketing as an importer or exporter. Then you must
Complete the following general requirements which are under noted below:

 Valid passport (Minimum 6 months before expiry)

 2 passport size latest pics(with white or blue background as per demand of
embassy)

 CNIC copy and also take original for showing to clerk there.

 Passport’s copy 1st+2nd page( copy of all last visa if you have)

 From of embassy filling correctly

 INVITAION Letter from you buyer.

 Ticket reservation (take from any travel agency)

 Travel insurance which cover 25000 Euro for any Europen

Country not UK.(Take from any travel agency in 4000 Pak Rs approx)
 Hotel booking of same city in which your customer living.
(take from any travel agency against very nominal fee)
 Visa recommendatory letter from CCI or association
 Bank statement of company +personal
 Last correspondence’s copies with your customer

Copy of Email,OPI,AWB, INVOICES ETC

 Personal appearance & interview in which try to satify the
Ambassador that you will come back after meeting/marketing within
The valid visa
 And your luck

While in Middle East (

(Yeman. kuwait, ksa, uae, qatar, Oman, Bahrain) there is no any
Requirements just send to your passport’s copy to your
Friend/Colleague/Relative he will issue visa after paying fee and his kafeel’s
approval letter in immigration
Department there and send to you by Fax/ post than you can book the air ticket
after showing that copy of visa in travel agency easily.
 (12)
R E B A T E.

When any importer imports any legal thing which is consumable from anywhere
of the world through the Air or Sea port. Then Government takes some
percentage of taxes as product duty, import tax..
And when exporter uses this raw material or this imported thing in his exported
goods
And send to any part of the world against F/C then governments drawback to
some percentage of that duty which government had taken at the arrival at port
from importer to that exporter. That is called DUTY DRW BACK OR REBATE.

HOW TO APPLY

The rebate apply on your FOB value after clearing the all amount of your OPI.
So, you take the file from Custom House of your City and then complete the file
and papers according to this by any typist. It’s not so difficult...Don’t try to
complete by yourself it’s easy but lengthy. So, the typist knows how to complete
and type well. After getting experience you can complete by yourself easily.