Red Tape and Taxes - How To Lessen The Effects of Bureaucracy When Trading Internationally
In the third part of my exporting series, I am looking at the challenges small businesses face from red tape (bureaucracy) and taxation.
Red tape can really stifle growth, both on a domestic and international level. Bureaucracy causes businesses to spend time on compliance and paperwork rather than innovation and growth. In a recent report, the FSB stated that '23 per cent of small businesses currently export but 32 per cent of them are put off by bureaucracy.'
Here are some of the key issues affecting international trade, with some suggestions as to how you can avoid problems.
Compliance with local tax regulations
This is the number one obstacle for businesses looking to trade abroad. Remember that, unfortunately, most taxation systems are set-up for the benefit of the government collecting tax, rather than businesses trading within that country. This can result in a lot of hassle and confusion.
Your own country's taxation authority website is the best place to start when you are at the planning stage of export. I have included a list of some of these at the end of this post.
Compliance with local laws
You need to research, for every country you trade with, the local laws, regulations and product standards. In some countries, you may need to modify your products or packaging and, to ensure acceptance into the country, there may even be the need to have your products inspected locally.
Including the correct documentation
If you fail to provide the correct paperwork (and the exact number of copies required) you run the risk that your products may be delayed or even seized by Customs, and you may end up having to pay a hefty fine. Make sure you understand what you need to include, and exactly how to complete it, to avoid problems.
Protect Your Intellectual Property
This is surely your greatest asset; so again, you need to research this area thoroughly. Understand what happens to your rights concerning IP, as it varies across the different countries with which you trade. The UKTI provides some great advice on protecting your IP abroad. It is UK-specific but a lot of the information would apply elsewhere in the world.
Unfortunately, I can't give you any simple shortcuts to avoid red tape when exporting. We live in a world where almost every nation has different rules and regulations, and they change all the time. The key is to research your markets, and seek out expert help if you need to. Thankfully, most of what you need is available online, via websites such as those whose links are below.
Don't let red tape put you off; if you need reminding, here are some reasons why exporting is great!
Online Export Resources
For companies exporting from:
- UK HMRC, UKTI Exporting Country Guides and Exporting Is Great
- USA CBP, Uniway Sourcing
- Canada CBSA
- Europe Europa
- Australia Trade, Import & Export
- New Zealand Trade & Enterprise
photo credit: Stop