Through a trading company, it is possible to facilitate the import and export process between buyers and suppliers from different countries.
Intermediary companies act as mediators between their product and the foreign market, through indirect export of products. There are two types of organization modalities that carry out these processes: The Exporting Commercial Company and the Trading Company.
A Trading company has the objective of facilitating the commercialization and making more agile among manufacturers and purchasing companies, acting as a facilitator of trade with foreign countries, by promoting the indirect export of products. In this way, it is possible to reduce the barriers for importing goods.
Through a trading company, it is possible to facilitate the import and export process between buyers and suppliers from different countries.
But, what is a trading company?
In Brazil, a trading company is also understood as an ECE (Commercial Exporting Company), which has a Special Registration Certificate. The term trading company does not appear in Brazilian legislation and its definition is quite confused with that of commercial export, but there are some distinctions between the two types of modality.
Trading companies work as an export trade, but they expand their scope to encompass companies that:
They are incorporated as Corporations (S/A)
Present Special Registration Certificate
They have a minimum capital from 703,380 UFIR (Reference Tax Unit)
They were not penalized for infractions in the scope of foreign trade.
Trading companies are governed in the country by Decree-Law No. 1.248, of 1972 and its purpose is to acquire goods in the country where its headquarters are located for subsequent commercialization abroad.
As well as commercial export companies, this modality requires registration with "Siscomex" and "Radar Aduaneiro".
It is normal to observe large international trading companies that have units in different countries, so that they can use them in different types of business. Other trading companies do not have representation in the country of origin of the goods. This condition restricts the activity, reducing the company's competitiveness.
In this way, it is possible to distinguish trading companies due to their wide operation in the international market. The requirement to be constituted by high capital brings this modality security to carry out transactions even with market fluctuations and unforeseen conditions, which cause increased costs and other risks.
Main advantages of importing via Trading company:
More security and seriousness for being incorporated under a corporation (S/A)
It features medium to large company characteristics, ensuring more security for business transactions
Offers tax benefits for exporting goods
Has the financial capacity to carry out extremely high value transactions
It is an intermediary of indirect exports
Presents financing and industrialization possibilities
Reduces the number of shipments
Assists the customer throughout the process
Experience and knowledge of the foreign market and foreign customers
In addition to advising clients to enter internationally
What are the differences between an export trading company and a trading company?
Although the two modalities act in a similar way, acquiring goods in the host country and trading with others, the trading company also needs the same legal mechanisms to function.
The main difference between them is whether or not they have the Special Registration Certificate and it is also found in the large operations in the international market carried out by trading companies. The requirement of high capital for its constitution makes trading companies more solid even in market fluctuations.
From a tax point of view, there are no differences between the two modalities in Brazil:
Both have tax benefits for the Tax on Industrialized Products (IPI), for Social Contributions and for the Tax on Circulation of Goods and Services (ICMS).
Now that you know the advantages of a trading company in Brazil, it is now possible to import and export your products with KGMG/Trading Co. No matter the size of your company, small or medium, it can be part of the select team of companies that ship products to markets around the world.
If you are looking for a company that can assist you in these specific processes, count on KGMG.
There are more than 25 years of experience, based on a quality policy, and trained professionals, experienced in the area.
Contact us and find out more in detail about the know-how, expertise and essential guide in import and export via trading company.