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How do you start Export /Import Business from Bangladesh?
Starting an Export/Import business in Bangladesh can be a lucrative opportunity due to the country's strategic location, growing economy, and various trade agreements with international markets. Here's a step-by-step guide on how to start an Export/Import business from Bangladesh in detail:
1.Research and Select the Right Product or Service:
Before you begin the logistics and registration process, identify the product or service you want to export or import. Conduct thorough market research to determine demand, competition, and profitability.
Export Ideas:
Bangladesh is known for products like garments and textiles, jute, tea, seafood, leather goods, and agricultural products. Choose products that have international demand and align with Bangladesh’s export strengths.
Import Ideas:
Common imports include electronics, machinery, chemicals, food items, raw materials, and consumer goods. Investigate market trends and look for opportunities to bring in products that local markets require.
2. Prepare a Business Plan:
A comprehensive business plan will help you map out your goals, strategies, and financial projections. Key points to cover:
Market Analysis:
Understand your target market (both for imports and exports). For example, which countries are your target clients, and what are the buying behaviors in those regions?
Financial Plan:
This should include your startup capital, projected income, and expenses. The financial aspect is especially important to secure loans or investors.
Competitor Analysis:
Research local competitors and international market trends. Learn what makes them successful and how you can offer something unique or more competitive.
Marketing and Sales Strategy:
Outline your sales strategy, which could include online marketing, trade shows, building partnerships, etc.
3. Register Your Business and Obtain Necessary Licenses:
In Bangladesh, you need to legally register your business and get the necessary licenses. Here’s what you need to do:
a. Register Your Business
Choose a Business Structure:
You can register as a sole proprietorship, partnership, or private limited company. A private limited company is generally recommended for export/import businesses as it provides limited liability protection.
Register with the RJSC:
Register your business with the Registrar of Joint Stock Companies and Firms (RJSC). This is the first step to officially formalize your business.
Obtain a Trade License:
Apply for a trade license from the City Corporation or Municipality of your business's location. This allows you to legally carry out business operations.
b. Get an Importer-Exporter Code (IEC):
You need to obtain an IEC (Import Export Code) from the Directorate General of Foreign Trade (DGFT) or the Ministry of Commerce. This code is required to carry out any international trade and is necessary for customs clearance.
c. VAT Registration:
In Bangladesh, if your annual turnover exceeds a certain threshold (usually BDT 80 lakh), you need to register for VAT with the National Board of Revenue (NBR).
d.Customs Registration:
To import and export goods, you must also get registered with the Customs Department of Bangladesh. This will involve filing for customs clearance to handle international shipments.
e.Other Permits/Licenses:
Depending on the type of goods you are importing or exporting, you may need additional permits or certifications. For example, if you're exporting food products, you might need a food safety certificate.
4. Open a Business Bank Account:
You will need a business bank account to manage international transactions and payments. Ensure you choose a bank that has a good reputation in handling export and import transactions and offers services like foreign currency accounts, online banking, and remittance services.
5. Source Suppliers or Buyers:
For Exporting:
If you're exporting, establish connections with manufacturers or suppliers in Bangladesh. You will need to ensure they meet international standards, especially if you're dealing with raw materials or sensitive products.
For Importing:
Look for overseas suppliers from countries that produce the goods you wish to import. Websites like Alibaba, global trade platforms, or attending international trade fairs can help you connect with reliable suppliers.
6.Understand Shipping and Logistics
International trade requires efficient logistics. Here’s what you need to consider:
Shipping:
Choose reliable shipping companies to handle freight. In Bangladesh, popular ports include the Port of Chittagong and Port of Mongla. Determine the best shipping method based on your product (air, sea, or land).
Customs Clearance:
Work with a customs clearing agent to ensure that all the paperwork is in order for customs clearance. Your product must comply with both Bangladesh’s and your target market’s customs regulations.
Insurance:
Protect your shipments with insurance. This helps mitigate risks associated with international shipping, such as loss, theft, or damage.
7. Build a Network of Contacts
Building strong business relationships is crucial in international trade. Develop relationships with:
Freight forwarders to manage logistics.
Customs brokers for customs clearance.
Legal advisors to help with international trade laws.
Banks for international trade financing and foreign exchange transactions.
Networking through trade associations, such as the Bangladesh Exporters’ Association or Bangladesh Garment Manufacturers and Exporters Association (BGMEA), will help you stay updated on industry standards and opportunities.
8.Understand Trade Finance and Payment Methods
There are different ways to secure payments in international trade. Understanding these options can reduce financial risk:
Letters of Credit (LC): One of the safest payment methods for international trade.
Advance Payments: The buyer pays in advance before shipment.
Open Account: The seller ships the goods before receiving payment, but this carries more risk.
You should also familiarize yourself with foreign exchange regulations and how to handle currency conversion for international payments.
9.Market Your Business:
Marketing your export/import business is essential to get clients and generate sales:
Online Presence:
Develop a professional website with product details, company profile, and contact information. Also, leverage platforms like Alibaba, Amazon, or TradeIndia.
Attend Trade Shows:
Participating in international trade exhibitions can help you connect with suppliers and buyers.
B2B Platforms:
List your company and products on B2B platforms, both local and international, to reach a larger audience.
Local Partnerships:
Collaborate with other businesses, agents, or wholesalers who already have a network in the region you wish to trade with.
10. Understand Export and Import Documentation
Both export and import businesses require proper documentation. Ensure you handle the following:
For Exports:
You will need a commercial invoice, packing list, bill of lading, certificate of origin, export license, and customs declaration.
For Imports:
Similar documentation is needed, including an import license, bill of lading, invoice from the supplier, and customs clearance documents.
11. Stay Compliant with International Laws:
Ensure that you stay compliant with local laws in Bangladesh as well as with the laws of the country you are trading with. This includes trade restrictions, import/export bans, and product-specific regulations (e.g., food safety standards, environmental regulations, etc.).
12. Scale Your Business:
Once your export/import business is up and running successfully:
Expand Your Product Range:
As you gain experience, diversify your offerings to cater to new markets or customers.
Establish a Brand:
Focus on building a brand around quality, reliability, and customer service.
Outsource Logistics:
As your business grows, you may want to outsource logistics or hire an experienced international trade manager to handle operations.
Conclusion:
Starting an export/import business in Bangladesh involves careful planning, registering with relevant authorities, sourcing products, and managing logistics. By focusing on market research, building strong networks, and complying with local and international regulations, you can successfully establish a business that operates in the global marketplace.