Aspects of Export
The advancing
development of international cooperation and exporting is making
economic activity increasingly complicated. Business transactions not
only need to be seen from a commercial point of view; it is also
necessary to take technical, legal, fiscal and human factors into
consideration.
Fairplay in Export
The
provisions of the OECD Model Agreement (especially Section 5), for
example, have made it quite difficult for a company to set up a sales
organization in a foreign country without at the same time establishing
a place of business there.
Go local Since, however, the
administrative requirements for setting up a place of business are more
or less the same as for a foreign branch, it makes sense in this case
to opt for setting up a legally independent branch from the outset.
General import
You of course have the option of developing the market with the help of a general importer.
What
may at first glance appear to be a simple solution, however, as a rule
turns out to be risky and expensive. Risky, because the entire risk
lies with one person or organisation (the importer is your only
customer in that country). Expensive, because to market your product
the importer has to calculate margins, which, in competition with other
suppliers, makes your product less attractive.
Your own subsidiary
After
considering the alternatives and weighing up all the arguments, there
is really only one viable possibility for developing foreign markets: a
wholly-owned sales subsidiary.
Organise your export activities with
your own means, present yourself to your customers as a local business
and sell your products under your own corporate identity. What was and
is the right approach in your country of origin applies in equal
measure to the foreign markets you are aiming to develop.
History
