How to become a participant in foreign economic activity and what needs to be done for this

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Foreign economic activity or FEA is economic activity related to the export or import of goods and services. In other words, this is trade between a national representative and a foreign one. In this case, trade can be understood not only as the purchase and sale of goods, but also as the implementation of international projects, as well as activities related to investments and loans. Participants in foreign economic activity can be government bodies, commercial and state-owned enterprises, and individuals.

Foreign economic activity is carried out in accordance with customs legislation.

As the economy grows, more and more Russian enterprises, both large and small, are entering the world market. Every year many international contracts are concluded, not only goods, but also equipment are purchased, and not only raw materials, but also products of our own production have become the subject of export. By carrying out such activities, Russian companies become participants in foreign trade activities.

How much will foreign economic activity cost?

First of all, you need to understand how much the new direction will cost. Perhaps calculations will show that importing or exporting is not practical for you now.

If we are talking about imports, find out the country of origin of the goods and the HS code, at least the first 4 characters. This way you will find out whether the import of goods is prohibited, whether there are restrictions, what permits, licenses, certificates for import and customs clearance are required and whether you can obtain them.

Keep records of exports and imports using the simplified tax system in the Kontur.Accounting web service. Currency accounting and work instructions, taxes, automatic salary calculation and reporting in one service. Get free access for 14 days

What is the Commodity Nomenclature of Foreign Economic Activity? All goods are coded according to the TN VED classifier (Commodity Nomenclature of Foreign Economic Activity). The product is assigned a 10-digit code, which is needed at customs for declaration and payment of duties. There are more than 2.5 thousand codes in the Russian Commodity Nomenclature for Foreign Economic Activity, among which you need to find “yours.” Errors in assigning a code can slow down processes at customs, so if you have difficulties in choosing, contact specialists in the Commodity Code of Foreign Economic Activity, they will save you time and money that you have to pay for storing goods at customs during delays.

Now calculate customs duties (defined by Article 318 of the Customs Code of the Russian Federation):

import and export customs duties;
fees - for escorting and processing cargo;
taxes - import VAT and excise tax.

Duties are calculated based on the assessment of the customs value of the goods and its classification according to the Commodity Nomenclature of Foreign Economic Activity - the calculation procedure is prescribed in the law for each group of goods.

Fees are calculated based on the value of the item. There is a list of transactions that are not subject to fees - in Art. 47 Federal Law of August 3, 2018 No. 289-FZ “On customs regulation in the Russian Federation.”

The VAT rate for export is 0%, for import - 0%, 10% or 20% depending on the group of goods. Excise taxes are levied on certain groups of goods: tobacco, coffee, alcohol, cars.

There are tariff benefits for some types of goods; they depend on the purpose of import, country of origin, customs regime, and cost of goods. For example, when importing goods from the CIS, you are exempt from customs duties (but take care of a certificate of conformity that will confirm the production of the goods in the CIS country, and the sender must also be registered in the CIS country). Materials of a cultural, scientific and educational nature are also exempt from duties.

Accompanying costs also require calculation:

registration of permits with a certifying authority or with the help of an intermediary;
services of a customs broker, if you engage him - by the way, he will be very useful for a beginning importer/exporter and will help save on fines and downtime;
storage of cargo in temporary warehouses during transportation.

And, of course, we take into account the costs of purchasing, transporting and selling goods, paying for the work of specialists if you hire a customs broker or other assistant. If all these calculations have shown the effectiveness of the idea and you still want to engage in foreign economic activity, look for an assistant, negotiate with a foreign partner and conclude a contract.

Results

The organization of accounting for foreign economic activity entails not only an increase in the number of accounting documents used, but also a number of features: both in the reflection of accounting transactions and in the preparation of reporting.

Sources:

Tax Code of the Russian Federation
Federal Law of 02.08.2019 No. 265-FZ
Bank of Russia Instruction No. 181-I dated August 16, 2017
Order of the Ministry of Finance of the Russian Federation dated November 27, 2006 No. 154n
Order of the Ministry of Finance of the Russian Federation dated October 31, 2000 No. 94n
Decree of the Government of the Russian Federation dated October 13, 2008 No. 749

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Who will be involved in foreign economic activity?

External activities require special preparation. You or the manager who will be responsible for the direction must be able to:

know English, and better yet, the partner’s language: you will have to work a lot with documents in a foreign language, and also negotiate;
know customs legislation with its subtleties;
be able to negotiate and negotiate at customs.

If a manager has experience in foreign trade with the country with which they plan to trade, this is a big plus: knowledge of the mentality and specifics of the country increases the chances of lucrative contracts.

If you are not competent in these matters, consider outsourcing foreign trade activities or individual parts of the process.

Selection of goods and negotiations with the supplier, from which the organization of foreign economic activity begins

Recommended sequence of actions to search for a product:

We analyze the structure of demand, as well as advertising and (if possible) samples of competitors' products in order to build on a solid foundation of specific facts and figures.
We proceed from the fact that any wholesale product is intended for sale directly to the consumer or for wholesale distribution . We analyze whether it is possible to ensure the competitiveness of the product in different markets.
We do not focus on the purchasing method chosen by your competitors, or the one that has historically developed in this market. If everyone unanimously purchases goods from Vasya and K LLC, this does not mean that they need to do the same.
Selecting a supplier is a procedure for comparing the economic weight of options. Having chosen a specific one, get comfortable and gain a foothold for as long as possible. A change of suppliers can only be justified or forced.
Use all four main channels for obtaining information about products : Internet, domestic market, outsourcing (search through an intermediary), exhibitions. Consider an economically viable combination of several options (information is not an end in itself).
Concluding an agreement for the supply of goods directly from a Russian factory makes sense only when the delivery of a large batch is agreed upon, and it meets the needs of your buyer in terms of key characteristics.
The decision to wholesale purchase through an intermediary of goods produced abroad can only be made under the following circumstances: you are satisfied with the conditions of the intermediary; the transaction is one-time in nature; You yourself create an assortment and select products that, in your estimation, will be in demand by the buyer.
If a trial batch of goods purchased through an intermediary fully meets your expectations, start searching for a manufacturer. Just first evaluate the range of economically profitable product costs.
Be careful when purchasing perishable goods. You should not start with large quantities; it is better to make a test purchase and import the goods in limited portions. Do not succumb to possible psychological influences.
When working with Chinese businessmen, do not try to buy goods at the lowest price. Of course, you can bargain, reducing the price to an acceptable one, but if the bargaining leads to values “on the verge of a foul,” beware of losses due to unexpectedly low quality of the goods.

Negotiation. Chinese characteristics:

The location and format of negotiations are the most important details of the process . If this responsibility is assigned to a foreign partner, please read the details of the regulations. This is especially true when it comes to eating. If you were not notified in advance that the regulations provide for dinner or lunch, then you have the right to refuse the treat.
If negotiations are taking place in Russia, do not allow your partner to choose the location . Don't skimp. Rent a decent hotel room, a comfortable office in the business center or at the embassy. This will confirm the seriousness of your plans.
Businessmen from the Middle Kingdom are conducting seemingly “empty negotiations” for the sake of practice, simultaneously trying to impose enslaving conditions on you through blackmail. Defend yourself against such tactics with their own weapons. If such actions are on the verge of what is permitted, say that you are conducting parallel negotiations with other applicants and are close to agreement on a number of proposals, and much more profitable ones. An effective weapon against Asian cunning is reframing, a technology developed by neurolinguistic programming specialists.
If partners show dissatisfaction for no obvious reason, try to remain calm. The anger display tactic is just a psychological trick to get you to give in.
Do not tell the Chinese the exact date of your departure , otherwise they may deliberately delay the negotiation process in order to force you to make concessions. You can reschedule your flight if you think that signing a contract is only a matter of time. If the Chinese negotiator simply delays signing the contract, state that you are leaving not the day after tomorrow, but tomorrow.
Businessmen from the People's Republic of China tend to take notes on their partners' statements in order to then blackmail them with inconsistencies . Try to always operate with the same numbers, facts, and details.
Get ready for persistent and lengthy bargaining . Starting with an artificial, at first glance wild, price increase is standard practice. Don't react to sky-high numbers. Negotiate persistently and patiently to arrive at reasonable prices by the end of the process.
Carefully analyze all the details and subtleties of the contract . Make sure that the contract language complies with the strictest standards and does not allow for ambiguous interpretations.
Try to get to know the culture and mentality of your foreign partner more deeply. It is much easier to achieve mutual understanding if you imagine how the person with whom you plan to do business perceives the world and reacts to different situations.

Read the article: Methods of international trade in the modern global economy

How to conclude a foreign contract

Open a foreign currency account, enter into a foreign economic contract and register it with the bank.

Requirements for foreign contracts are specified in customs legislation. The structure and execution of the agreement are similar to internal agreements. The difference is that the foreign contract is drawn up in two languages of the partner countries. Write down the terms of the transaction, provide the technical characteristics of the goods, their quantity, delivery conditions according to Incoterms 2010, the moment of transfer of rights to the goods.

Incoterms 2010 are international terms associated with the delivery of goods during foreign trade activities. We talked about them in our article.

If you enter into an export contract worth more than 6 million rubles or an import contract worth more than 3 million rubles, you will have to register it with the bank. Registration takes one day.

Import operations

Import is the import of foreign goods into Russia for further use. Imports in Russia are booming; everything from food to cars and equipment is imported from abroad. Imported goods are subject to the import customs regime (Chapter 20 of the EAEU Labor Code). Read about organizing imports at an enterprise in our article.

How to become a participant in foreign trade activities

To trade with foreign countries, you will have to register with customs. Registration takes 5 days, so take care of this in advance so that your cargo does not have to sit idle.

Submit the following documents to the customs office where the goods will be processed:

a copy of the organization's Charter;
decision to create an organization;
registration certificate;
TIN;
a copy of the certificate from Statistics;
bank account certificates;
documents on the appointment of the director and chief accountant;
copies of passports of the director and chief accountant, certified by the seal of the organization;
a lease agreement at the legal address or a certificate of ownership of the premises.

Within 5 days you will be registered and given a foreign trade participant card.

Who is this?

Foreign trade manager is a specialist who manages the export/import of products of the company or its partners abroad/from abroad.

What about the abbreviation? FEA - foreign economic activity. What does this concept include? All types of foreign economic activities of the company (economic, organizational, economic, commercial) that are aimed at the world market. This will also include the chosen strategy and methods of cooperation.

Foreign trade managers, therefore, work in companies that intend to cooperate or are already in contact with foreign partners.

How to keep records of foreign trade activities

In addition to technical processes, you will have to keep records of foreign trade activities, which are distinguished by their subtleties. We talk in detail about accounting and tax accounting for foreign trade activities in this article, but in brief it is this.

accounting of primary documents - in two languages: this is a foreign contract, customs declaration, invoice, payment slips, etc.
accounting - there may be difficulties when forming costs (including fees and customs duties, delivery costs and employees), you also need to remember about exchange rate differences;
tax accounting - payment of VAT, excise taxes, income tax, deduct VAT on imports, reflect these expenses in reports.

Author of the article: Irina Nikolaeva

Keep records of exports and imports using the simplified tax system in the Kontur.Accounting web service. Accounting for foreign trade and ruble transactions, taxes, automatic salary calculation and reporting in one service.

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Re-export operations

Re-export is the export abroad of goods that were previously imported into the territory of the Russian Federation. Such transactions are not subject to customs duties, and if payments have already been made, they are refunded. Examples of re-exported goods: gas, oil, precious metals, and so on. For example, gas flowing from country A to country B. The pipeline passes through country B. In country B, this gas is not used or processed, in fact it is simply moved to another country. For re-exported goods, only minor processing is allowed in the re-exporting country: repacking and sorting. Customs procedure - re-export (Chapter 32 of the EAEU Labor Code).

Getting started and career growth

As a rule, after receiving a specialized education, a graduate has several options:

Find the required position in a small company.
Get a job as an ordinary employee in the foreign trade department of a large corporation.
Find a position as an assistant, assistant manager for foreign trade activities.
Achieve appointment as responsible for the development of a small international project, delivery of a specific product.

All of these paths will help you gain much-needed experience in this specialization. Of course, you shouldn’t hope for high wages here just yet.

The most important thing at the beginning of a career is to thoroughly study the world market, engage in marketing research, and make business contacts and acquaintances.

Since the profession in our country is young, but at the same time quite in demand, the forecasts for rapid career growth are very high. As the employee’s responsibility increases and the scale of his field of activity increases, wages will also increase.

Cash reward

The salary of a foreign trade manager consists of three components:

The fixed part is the salary.
Interest on concluded transactions.
Annual bonuses based on the results of particularly successful completed projects.

It is difficult to identify any specific numbers. Salaries depend on the locality and the size of the employing company. And of course, from the professionalism and diligence of the manager himself. For a beginning worker, the average salary in Russia is considered to be 20-40 thousand rubles. Experienced specialists, professionals in their field, receive about 100 thousand rubles monthly, or even more.

Manager of foreign economic activity is a young, but quite promising specialization. Fast career growth and decent pay are possible here. But quite high demands are placed on the specialist. What is unfavorable for newcomers is that what is primarily valued here is work experience and established business connections. However, there are several ways to achieve all this soon. It is important not to forget about your personal qualities, because the success of a specialist here depends on his interactions with partners.

Stage of agreeing on the terms of the transaction

After identifying a reliable counterparty, mutual agreement follows on each point of the international transaction: terms of purchase, payment and delivery of the order.

Delivery conditions are determined according to the rules of Incoterms, the latest amendments were adopted in 2021. In the new edition, the amount of the insured amount has been increased - over 110% of the cost of the consignment. The changes also affected the rules for issuing a sea bill of lading and the conditions for transporting cargo by own transport.

Additional payment and transaction details that require agreement with the partner:

payment terms;
advance amount and total order amount;
advance repayment conditions;
characteristics, name, weight, full description of the product;
details of cargo marking and packaging;
procedure for notifying the location of the cargo;
method of confirming the shipment of goods;
list of shipping documentation;
duration of the contract.

These details will protect the new foreign trade participant from unnecessary problems.

Main responsibilities of a manager

Summarizing all of the above, let's highlight the key tasks and responsibilities of a specialist in foreign economic activity:

Conclusion and support of foreign trade (import/export) contracts.
Negotiations, business correspondence with logistics partners, brokers on the terms of cooperation. Foreign trade activities and logistics in any organization will be interconnected.
Supporting deliveries from their placement to receipt by the addressee.
Control over timely payment for products by partners, transfer of finances to suppliers.
Preparation of all necessary supporting documentation for foreign economic transactions - licenses, certificates, permits, delivery schedules, etc.
Participation in international exhibitions and conferences.
Monitoring the foreign market aimed at finding new partners.

These are the main job responsibilities of a foreign trade manager. Let's move on to the next important question.

Cons of the profession

Like all other work activities, this one will also have disadvantages. Let's list the most important ones:

Quite a nervous and stressful job. This is due to the fact that in conditions of uncertainty you need to quickly make decisions on which both your own career and the development of the employing company depend.
So-called deadlines are situations when a large amount of work needs to be completed in a limited time.
A high share of responsibility for each of your actions or decisions.
The need to find a common language and establish successful communication even with diametrically opposed partners.

Customs clearance of consignment of goods

When registering the first shipments of cargo, experts advise seeking the help of a customs broker. Lack of experience in doing customs clearance yourself may result in administrative fines up to and including serious losses.

The customs broker completes the tasks of customs clearance of goods, the subject of foreign trade activities only provides a package of documents and information about the cargo. After customs clearance, the goods are released into free circulation at the full disposal of the owner.

Foreign economic activity is a complex multilateral set of activities that requires thorough knowledge from the most diverse fields (international economics, law, finance, transport logistics, etc.). Foreign economic activity subjects often face a choice: maintain a staff of multidisciplinary specialists or outsource some business processes.

Building a reliable sales system will be ensured by:

Detailed analysis of companies’ experience on foreign trading platforms;
Cooperation with retailers with smooth delivery of products to shopping centers and stores;
Opening your own dealer network;
Development of a franchise with favorable conditions for foreign partners.

When searching for counterparties, it is important to take into account the interethnic economic agreements of the Russian government with other states.