WHAT IS AN IMPORT AND EXPORT ENTRUSTMENT? RISKS IN THE DELEGATION PROCESS

Import and export entrustment is one of the operations that almost all goods owners must be familiar with when they want to import goods from abroad to Vietnam. However, not everyone understands and grasps the necessary information and risks to avoid in the process of outsourcing import and export. So, please join SIMBAGROUP to explore these issues with us!

What is Import and export entrustment?

The concept of import and export entrustment

Import and export entrustment is when a business hires a third-party entity (a company specializing in import and export entrustment) to replace the business in carrying out the export/import activities of goods.

Benefits of Import and Export Entrustment

For small and medium enterprises or medium enterprises that have just participated in international trade activities, businesses with little experience and understanding of international payment will face many limitations when self-importing and exporting directly. At this time, the import and export entrustment service will solve all problems on behalf of the business.
Enterprises and individuals are not eligible for legal entities to sign contracts with partners and customers in other countries. Therefore, for the exchange and import operations to take place smoothly, it is possible to sign a trust contract for an alternative third-party service company to comply with the agreed economic contract.

PROCESS OF IMPORT AND EXPORT ENTRUSTMENT

For principals:

The first is to inspect and ensure that goods and services are allowed to be traded by the provisions of law. If the goods are prohibited, they will not be allowed to be imported into the country, so there is no need to use an import authorization contract.
After that, the principal should note and discuss with the trustee to apply for a license to import goods if the goods of his enterprise fall into that category, so that the trustee can do it early without wasting time and effort later.
Check the capacity and experience of the entrusted importee company.
The two parties shall sign an import entrustment contract

For trustees:

The two parties shall sign an import entrustment contract
Payment for goods to foreign suppliers
Transportation and declaration of imported goods
The trustee is responsible for carrying out import customs procedures when a set of goods documents is available according to current regulations.
Handing over goods to the principal and related documents such as red invoices ...

WHO IS THE IMPORT AND EXPORT ENTRUSTED SERVICE FOR?

Enterprises and entities that need to entrust import and export entrustment include:

The supplier is only a factory and does not have the function of exporting and making foreign trade contracts, or export documents for goods.
The enterprise does not have legal status, and cannot sign contracts with foreign partners.
Enterprises do not trust suppliers and want to entrust a third unit to replace them to carry out appraisal, negotiation, signing contracts, and completing export documents.
The enterprise has no experience in international trade and does not have a team of personnel knowledgeable in import and export to carry out the most cost-optimal import of goods.

A FEW NOTES ABOUT VAT WHEN PERFORMING IMPORT AND EXPORT ENTRUSTMENT

When performing an import and export entrustment, there are 2 tax-incurring transactions here: economic transactions and trust transactions:

Taxes on economic transactions: VAT on imported goods or excise taxes,...
Tax on entrusted transactions: VAT included in service fees is usually 10%.

Both parties must declare and pay taxes based on arising invoices. However, note that the tax bases of these two subjects are different.

THE RISKS IMPORT-EXPORT CONSIGNMENT

Risks for businesses engaging in consignment

In import-export consignment, the greatest risk lies with the consignee. This company represents the importer on all documentation and assumes all legal responsibilities for the goods entering the country. Therefore, if it turns out that the consigned goods are prohibited items, the import-export consignment service provider violates the law. This will directly affect the entrusted unit.

The risks that a party seeking consignment services may encounter

Alongside its convenience and ease of use, import delegation also brings some limitations that the delegating party should consider before signing an entrustment contract:

Companies and individuals using the delegation service have to pay a fee to the service provider.
Delegation can make a business more passive, depending on an intermediary which can slow down economic activities compared to the company's timeline.
The risks that the trustee bears may be misinformation about imported suppliers and products, and collusion between the trustee and the exporter.

WHY SHOULD YOU CHOOSE SIMBAGROUP'S IMPORT AND EXPORT ENTRUSTED SERVICE?

When you use SIMBAGROUP's import and export entrusted service, you will not need to worry about the above risks.

SIMBAGROUP's import and export entrusted service

With many years of experience in the industry, we are confident to bring the best service experience to our customers.

SIMBA - the leading LOGISTICS unit in Vietnam:

Entrusted import and export packages
Support find sourcing - negotiation that is in the best interest of the business
Professional customs declaration, minimizing risks
Official transportation, optimal cost, no worries about border congestion
Contact for advice: 24/7 about the most dedicated import and export entrustment service
A team of import-export experts with many years of experience in understanding import and export policies and procedures
Commitment to the most optimal cost for customers Modern warehouse system, ensuring fast return of goods
Thousands of customers are using import-export entrusted services and more than 90% of customers give positive feedback about the quality of service at the company.