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Companies Incorporated Outside India:

Right from days of East India Company foreign companies were incorporating companies in India. After the liberalization policy Indian companies also started incorporating subsidiaries outside India. Recently many foreign companies have shown interest to open branch office or liaison office to monitor their business in India. In case they opt to incorporate a subsidiary company in India they have to follow the procedures given under the Companies Act, and also the provisions of the act will apply in to after the company is incorporated. If a company incorporated outside India wish to have a place of establishment in India without incorporating separate company for various reasons then it has to follow the procedures laid down in Part XI-sections 591 to 602.

The Act, which has been enacted to oversee the functioning of companies in India, draws heavily from the United Kingdom’s Companies Acts and although similar, is more comprehensive. The Registrar of Companies (ROC) and the Company Law Board (CLB), both working under the Department of Company Affairs, ensure compliance with the Act. Sections 592 to 602 of the Companies Act of India closely follows sections 406 to 423 of the English Act barring sections 408, 416 to 418 of the act.

Foreign Companies:

A foreign company is a company which is incorporated in a country outside India under the law of that other country and has a place of business in India. Sections 591 to 602 of the Act deal with such companies.

Foreign Companies are of two classes namely:

Companies incorporated outside India, which have established a place of business in India after April 1, 1956; and Companies incorporated outside India, which have established a place of business in India before that date and continue to have an established place of business in India.

Part XI of the Companies Act, 1956 containing Section 591 to 608 deals with the Companies incorporated outside India i.e. a “Foreign Company.” The provisions of this part of the Companies Act, 1956 prescribes that its Sections 592 to 602 shall be applicable to Companies who are incorporated outside India which after the commencement of the Companies Act, 1956 establishes a place of business within India and Companies incorporated outside India having established place of business within India prior to the commencement of the Companies Act, 1956 and continue to have the said establishment. It says that a Company incorporated outside India and having an established place of business in India in which 50% or more paid up share capital is held by Indians then provisions of those sections shall apply to such Companies also. read more »

A game my 8-year old son and I love to play in a department store is to race to be the first to find an item that is Made in the U.S.A. Sometimes the race takes more than 60 seconds. Try it yourself. Our marketplace has turned into a global bazaar. Shirts made in Honduras, mangoes from the Philippines, dog collars made in Indonesia, Italian leather handbags made in China. In this day and age, importing from abroad is not just good business sense, it is necessary for survival.

But you don’t want to be just a consumer at the end of the growing multi-billion-dollar trade chain. You want to be part of the international trade money flow. Before you order your first shipment though, you need to ask yourself – is this business right for you? Here are 4 simple questions to help you decide that.

Question #1: Do you have a connection to the supply source?

You are trying to import something from a foreign country to sell in the U.S. What’s different about you that you can do this more profitably than others?

Familiarity with the source country – maybe you spent a number of years in the country, you are familiar with the culture, the language, the industry. Those things provide considerable advantage.

Contact with sellers – you may know of reliable suppliers in the foreign country, you may have met them in person, or have been referred by a trusted source; you may have established a prior business relationship with them. Trust is key in the business and having prior relationships with sellers you trust gives you a leg up.

Merchandise with huge price gap – You may be aware of merchandise that cost much less abroad than in the U.S… A large price gap allows a lot of room for testing, learning and experimenting marketing channels. read more »

There are many avenues you can take to locate an international business partner for your products. It is not as difficult as someone might think. The effort definitely needs time, patience and sometimes money. Here are 12 conventional and unconventional tools and ways you can promote your company to an international destination.

1. Foreign Students: The most overlooked source for leads and market information is through communicating with foreign students in your country. Remember that these foreign students are a representation of the foreign market consumers, a source for cultural and market information and they might be able to get you connected to their homeland market. Your business can even offer summer intern opportunities to achieve mutual benefit for your business, the intern, and the participating school.
2. Obtaining leads Lists and utilizing export management companies: You can purchase import export leads from an international leads provider or you can use International trade companies to sell your products overseas. Some exporters offer connecting you directly with a foreign agent for a fee and/or a percentage.
3. Visiting the foreign market: If your company is financially capable, you can send your sales people on an overseas business trip. Meeting face to face with different companies will enable you to make an educated choice of who should represent your business, the foreign market conditions, what your competitors are doing, and a lot of other valuable insight.
4. Advertising: Advertising about your company in internationally distributed magazines like the ones available on international flights or in a publications produced in the targeted market can draw international attention to your products.
5. US Department of Commerce: For every country, there is a Country Desk Officer at the US Department Of Commerce. This is a source for useful information. They can be located by searching US Department of Commerce website.
6. The National Trade Data Bank: Many US embassies around the world produce monthly reports pertaining to the country they are located in. These reports come with information about new laws, market research, upcoming projects, exhibits, business key contacts and companies looking for US products. The reports are provided in a government database known as the National Trade Data Bank that is accessible online as well as provided in CD format.
7. International Trade Associations: There are a number of international trade and exporters associations in every country. These associations gather within them a treasure of experienced international traders covering every spot in the world. Joining them will definitely increase your business internationally and provide you with valuable data about your primary market and other opportunities around the world. They are also usually visited by trade delegations where you will have an opportunity to make contacts face to face. read more »

The U.S. Government encourages companies to pursue business with foreign enterprises. However, there are rules in effect that govern such exporting.

Exporting is defined as the business of:

• Sending or taking hardware out of the U.S. or transferring to a foreign person in the U.S.

• Disclosing (oral, email, written, video, or other visual disclosure) or transferring technical data to a foreign person whether in the U.S. or abroad.

• Providing a service to, or for the benefit of a foreign person, whether in the U.S. or abroad This serves as a just reminder that industry needs to be cognizant of what kind of information it discloses to foreign persons. Whether or not you are in the U.S. or visiting overseas, you can only discuss what is authorized on our license. read more »

What is your advantage? What is your edge? Perhaps you’ve worked for years selling poultry to the domestic market. Or maybe you are skilled in the insurance or financial fields. Many people today are knowledgeable in computers and software. Maybe you work in the public relations department for a soap company. Your best Army buddy is living in Singapore. Your brother lives in Italy.

Whatever the case, that’s your foothold into the exporting business. You have an advantage that others don’t have. To be successful, you need to cash in on that advantage.

Your edge means you have contacts in or knowledge about a particular field. Many people who get into exporting as intermediaries use contacts developed in their job while others shift to a completely different product or service when they finally begin exporting. But the secret to success is to take advantage of every edge and contact you bring into international trade, then build upon it. This isn’t the time to start fresh. Build on what (and who) you know.

Start by making contact with manufacturers or service companies in your area. You can check with the local chamber of commerce for insights on which local companies may be interested in exporting. These companies may be looking for someone like you to help them. Your proximity to their business may be the very edge you need. read more »

These days China is a global source for the commodities and is focusing on the international trade day by day. There is tough competition in the market but still China is standing its ground and striving its best. It has proved itself in several kinds of businesses and electronic goods manufacturing industry is on its peak. China is a leading supplier of the electronic toys all over the globe. In-spite of China staying into the international trade for quite a long time, it has stood the examination of time and has survived in-spite of neck-to-neck competition in the market.

It got best processes to work with and day-by-day has improved upon the same too. Several manufacturing companies are coming up everyday and global sourcing is been practiced now. This has boosted the average income of the individual and has improved upon the economic status of the nation too. Though China has the problem of highest population in the world but still it is trying its best to boost up the nation’s economy to give a better living to its people.

More and more companies have been practicing global sourcing for quite some time now, however, there has been seen an immense intensification in the number of organizations. These institutional bodies and organizations are concentrating on better global supply base, which provides better foundation to the booming industry sector. Several countries are focusing for China to be their global outsource plant as the manpower and other goods are cheap and easily available. It is the nation getting utmost consideration and attention these days and is principally supplying immense goods in the international trade. read more »

If you operate a small business, you may feel that your income potential is quite limited. However, you can increase and diversify your income through international trade.

1. Importing

Retail store owners can find additional products to sell from foreign manufacturers, distributors, and other suppliers.

Advantages of importing include increased product selection, lower costs, and increased income.

You may even decide to go exclusively into the import business and become a wholesale distributor.

2. Exporting

Manufacturers can find new customers for their products in foreign countries.

Perhaps consumers in your country have lost interest in your product. It may have become obsolete because of technological advances. A foreign market, however, may be desirous of that very product.

Maybe there is an economic slump in your country. Another country may be experiencing a boom. Sales from customers in that country may help stabilize your income.

Exporting can also help smooth the peaks and valleys of your income. For instance, if you sold winter sporting goods, you could sell to both northern and southern hemispheres to help offset the seasonal nature of your business.

Of course, you might also consider selling sporting goods for all the seasons and still export to other countries to increase and diversify your income.

You could also become an Export Management Agent. Arrange for other domestic companies to sell their products to foreign corporations and earn a ten percent commission.

You would think that selling to foreign customers would be quite risky. However, use of letters of credit can protect all parties. An Export Management Agent might actually arrange for ninety percent of the sale to be paid directly to the domestic supplier and ten percent to be paid directly to him.

3. Licensing

Consider becoming a licensing agent. Earn royalties by arranging for foreign corporations to manufacture and sell the products of domestic companies.

4. Finder’s Fees

Imagine the possibilities for earning finder’s fees in international trade!

You can earn fees from domestic companies for finding foreign buyers (or for finding suitable imports from foreign suppliers). You can also earn fees from foreign companies for finding domestic corporations that will buy their products (or for finding suitable suppliers and products from domestic corporations). read more »

Every entrepreneur’s dream is to graduate from one’s domestic trade level to international trade and thereby increase one’s profit margins manifold. Until few years ago this remained as a distant dream, but today it has been made a reality by the opportunities created by ingenious services provided by Business to Business (B2B) web portals. B2Bs have a database of exporters and importers around the globe and any legal business entity regardless of size can register in these portals.

These portals provide two types of memberships, free membership and premium membership. Free membership is a trial version made available to the trader to understand the functions of the portal. But the premium membership gives maximum visibility and interactive facility to the trader to divine the desired result in a short span of time.

History shows us that international traders used to just leave their places with their products or services, in search of new markets without any prior knowledge of the risks involved. Any such exploration in those days found success through sheer luck and these expeditions were not without any shortcomings either. They included risks related to expenditure, time and most importantly, lives of the people involved in the whole exercise. Those days, even after making a successful landing in a foreign territory, the traders had to encounter various issues like, language, socio-cultural differences and trading practices. read more »

First we will discuss the concept of trading. The trading concept is centered on the simple activity of the exchange of good or services or both. These exchanges may be the ones that simply take place between two parties within the country or between two different countries. The simple trade, which takes place between two parties, is known as bilateral trade and if these exchanges take place between more than two parties, is known as multi-Lateral trade.

Now let us deal with the issue of what International trade is? It is defined as exchanging of goods and services or both, between two or more partners from different countries (an exporter and an importer).

The country for the purpose of importing and for doing international business, generally uses the following three barriers:

1. Tariff Barriers

This is the barrier put on imports in the form of duties, tax and quotas etc. Due to which the imports are less and the price level of imported products rises and the demand for them decreases. read more »

Business to Business (B2B) portals are the most sought after international trading tool in the world. After the dotcom bubble burst the Information Technology industry was in the doldrums. The interest in IT related business showed a downward trend and then emerged B2Bs with its total solution to international trade. B2Bs give the trader the liberty to do business by lowering one’s expenditure.

Prior to B2B portals, there existed an interface in the form of brokers. Brokers helped to weld business relationships with every trader with one another across the world. But some of them evolved as middlemen one cannot do away with in international trade due to various reasons. In such an event, these brokers virtually held international trade to ransom. Consequently, in addition to international trade barriers a trader also had to carry the burden of exorbitant brokering charges. This in turn reflected on the prices of the products or/and services provided by them. The cumulative effect on the prices of the product or/and services made them unattractive in international market.

The combined effect of globalization and B2Bs enabled businesses to interact effectively. B2Bs did not try to eliminate brokers rather made them charge their clients realistically. As a matter of fact, today even brokers utilize the services of the B2Bs, and eventually have reduced cost of finding new clients. The B2Bs enabled the brokers to provide their services to a large number of traders cost effectively. Thus B2Bs virtually became an indispensable trading solution to one and all.

B2Bs success lie in its simplification of the trading needs by spending less time and money. In a glance they may seem like an interactive database of exporters and importers. But the most attractive feature of any popular B2B is the Forums. They provide inputs required for international trade through views and experiences exchanged by various traders from different countries. Such exchanges empower the trader with the knowledge of going about in the new markets. Moreover in the process they de-risk themselves from the dangers of entering new markets through the inputs drawn from those active Forums. read more »