How to Start an Exporting Business

exporting businessWhat is a good way to start a successful business from nothing and have fun doing it? The export business may be your answer. Not only does it require little financial investment to start, but it offers the prestige of working with customers from all over the world. One good example of this is Jovelito M. Cipriano, owner of Pinoydelikasi.com an online store selling Filipino delicacies.

From his initial startup capital of P10,000, a computer and a 24-hour fast Internet access, his business has grown into a million peso enterprise, delivering Filipino products around the globe.

Exporting is both challenging and rewarding. Export procedures are simple and the export documentation required has been lessened.

Build your knowledge and develop skills on the dynamics of exporting by attending seminars/training courses on the basics of exporting, letters of credit, negotiating with the foreign buyers, etc. The Philippine Trade Training Center offers courses on these topics.

How to Set up an Exporting Business

To set up an exporting business, you have to register with the Department of Trade and Industry (DTI) if it is a sole proprietorship. Partnership and Corporations have to be registered with the Securities and Exchange Commission (SEC). You also need to register with the city or the municipality where you intend to operate the business as well as with the Bureau of Internal Revenue.

However, even before operating your business, make sure first that the basic elements of a viable export enterprise are present. These are:

* Organization Readiness – Management is willing to commit resources of the enterprise.
* Product Readiness – Product meets foreign buyers’ requirements in both quality and price.

General Export Procedures

1. Upon receipt of a purchase order from a foreign buyer, immediately send him a proforma invoice for confirmation. An order is confirmed when the proforma invoice is signed and returned to you by the buyer.

2. Payment for exports is normally made through the banks. The foreign buyer’s interest in the Philippines is represented by a local authorized agent bank, which is designated by the foreign buyer’s bank. The local Authorized Agent Bank (AAB) will assist you in negotiating the collection of the payment for your exports.

3. The AAB will explain to you all the instructions concerning your shipment to ensure its acceptability for payment. Make sure that you understand all the instructions provided by the bank. If the instructions are written in a foreign language, ask the bank to give you an official translation in English or ask the bank to officially recognize a translation of the instructions, if the translation was made by someone other than the bank.

4. Exporters may be paid through banks by means of letters of credit (L/C), documents against payment (D/P), documents against acceptance (D/A), open account (O/A), cash against documents (CAD), prepayment/export advance, inter-company open account, offset arrangement, consignment, or telegraphic transfer.

5. You may or may not need outside financing to produce export products ordered by the buyer. Should you, however, find the need for outside financing, you can either tap the assistance of government or non-government financial institutions.

Export Documentation

1. When you are ready to ship, fill up an Export Declaration (ED) form. Sample ED forms are available at BETP, DTI Provincial offices, BOC Processing Units, OSEDCs and PHILEXPORT offices.

2. Secure an export commodity clearance/export permit from the proper government commodity office, if your product is included in the list of regulated products for exportation or if the buyer requires.

3. With the required supporting documents, submit the accomplished ED form to the BOC Processing Unit for the approval of the Authority to Load (AL).

Sending Sample Shipments
Follow steps 1, 2, and 3, of Export Documentation.

Loading in Manila
Cargoes to be transported by air are inspected by the BOC at the NAIA. Conventional cargoes, whether containerized or non-containerized, to be transported by ship are inspected by the Customs Container Control Division and the Piers and Inspection division, respectively, after payment of the wharfage fee and arrastre charges. Wharfage fee and arrastre services may be paid at South Harbor or MICP.

However, for BOI and PEZA registered companies, stamping or exemption from payment of wharfage fee may be done at the PPA Unit of OSEDC-Manila at Roxas Boulevard. Loading can either be at the North or South Harbor.

Loading at Provincial Ports
Documentation (steps 1-3) may be done in Manila. After approval of the Authority to Load, BOC sends message to BOC at the Port of Loading.

You can also process documents and secure Authority to Load from the local OSEDC (now in Clark, Davao, Baguio, General Santos, Iloilo, Cebu, Cagayan de Oro, and Subic Bay Special Economic Freeport Zone).

After loading, the BOC issues the following documents upon request:

1. Certificate of Origin, Form A (for export products covered by the Generalized System of Preferences (GSP). You can inquire about the GSP from DTI Bureau of International Trade Relations or Bureau of customs.

2. General Certificate of Origin (for export products not availing of preferences under GSP).

3. Certificate of Origin, Form D (for export products covered by the ASEAN Common Effective Preferential Tariff Scheme).

4. Certificate of Shipment.

Furnish the AAB, for record purposes, a copy of the duly accomplished ED form together with other shipping documents, if export negotiation or payment is coursed through them.

For shipments that are prepaid, send the original commercial and shipping documents to the buyer.

Sources: dti.gov.ph, gmanews.tv

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5 Responses

  1. Laila says:

    I want to learn how to export vegetable products from baguio to overseas.
    How to find buyers and how to have them.

  2. Gil A. Altamira says:

    Let me have more information please.

  3. Norman L. Bongat says:

    This is a good tool for beginners…

  4. Reco says:

    mucho miedo y poca verguenza marquez!! you footboxer!!! malverguenza!!!

    • Airen Elpa says:

      I want to learn how is the process and documents needed of exporting local products (Phils.) to export.

      Thank you in advance for the assistance.

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