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How to Start an Import-Export Business

Import export businesses can be very profitable in the long run. And the good news is that it doesn’t take much to get started in this direction. If you are wondering about how to start an import export business from home, this article should answer your most important questions. Even if the process itself is

2 Comments

06
Jan
A Brief History of International Trade

1. Ancient Period International trade based on the free exchange of goods started as early as 2500 BC. Archae­ological discoveries indicate that the Sumerians of Northern Mesopotamia enjoyed great prosperity based on trade by sea in textiles and metals. The Greeks profited by the exchange of olive oil and wine for grain and metal somewhere

13
Jul
Importance of International Trade to the Global Economy

International trade allows manufacturers and distributors to seek out products and services produced in foreign countries. Companies acquire them because of cost advantages or in order to learn about advanced technical methods used abroad, for example, methods that help reduce the cost of production, lower prices, and in turn, induce more consumption, thus producing increased

1 Comment

13
Jul
Determinants of International Trade

Why do some countries export or import more than others? Several studies have been con¬ducted to establish major factors that influence exports. The trade and exchange-rate re¬gime (import tariffs, quotas, and exchange rates), presence of an entrepreneurial class, and efficiency-enhancing government policy, as well as secure access to transport (and reasonable transport costs) and marketing

2 Comments

13
Jul
Volume and Direction of International Trade

In 1990, the world reached a milestone when the volume of international trade in goods and services measured in current dollars surpassed $4 trillion. By 2012, the volume of exports of goods and services was more than four times the 1990 levels, approaching $19 trillion. The dollar value of total world trade in 2012 was

13
Jul
Important Developments in International Trade

Regional Trade Agreements After the implementation of the Uruguay Round, members of the World Trade Organi­zation (WTO) launched a subsequent round in Doha, Qatar, in 2001 to further reduce trade barriers. The focus of this round has been on the reduction of trade-distorting agricultural subsidies provided by developed countries and the introduction of equi­table trade

1 Comment

13
Jul
The Limitations of Export-Led Growth

International trade played an important role in the economic development of North America and Australia in the nineteenth century and that of East Asian economies in the second half of the twentieth century. East Asia’s growth contrib­uted to increased living standards and reduced inequality as the new prosperity was widely shared among its population. In

1 Comment

13
Jul
The Impact of the Financial Crisis on Exports

In view of the higher risk and working-capital needs of exporting, firms rely more on banks for their exports than for their domestic sales. As a consequence, finan­cial crises are likely to affect exports more negatively than domestic sales. One of the most striking features of the financial crisis of 2008 was the col­lapse in

2 Comments

13
Jul
The GATT and the WTO

The General Agreement on Tariffs and Trade (GATT) was established in 1945 as a provisional agreement pending the creation of an International Trade Organization (ITO). The ITO draft charter, which was the result of trade negotiations at the Havana Conference of 1948, never came into being due to the failure of the U.S. Congress to

1 Comment

13
Jul
Regional Integration Agreements (RIAs)

WTO members are permitted to enter into RIAs under specific conditions. RIAs must be consistent with the WTO rules, which require that the parties to the agreement (1) establish free trade on most goods in the regional area within 10 years, and (2) refrain from raising their tariffs against countries outside the agreement. The number

2 Comments

13
Jul
The North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement (NAFTA) established a free-trade area for Canada, the United States, and Mexico. The agreement came into effect on January 1, 1994, after a difficult ratification by the U.S. Congress and approval by the Canadian and Mexican legis­latures. The North American Free Trade Agreement gave rise to the second largest

2 Comments

13
Jul
The European Union and Trade Agreements

The European Union (EU) is the oldest and most significant economic integration scheme, involving twenty-eight Western and Eastern European countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. One of

1 Comment

13
Jul
The Euro Crisis and Implications

Serious intraregional divergences in competitiveness and the related buildup of regional imbalances have been the root cause of the crisis in the euro zone. The Maastricht treaty of 1992, which created the European Union and led to the cre­ation of a single European currency (the euro), established criteria for EU member states that included the

2 Comments

13
Jul
Ownership Structure of Export-Import Business

In this section, we examine different forms of business organizations: sole proprietorships, partnerships, corporations, and limited-liability companies. 1. Sole Proprietorships A sole proprietorship is a firm owned and operated by one individual. No separate legal en­tity exists. There is one principal in the business who has total control over all export-import operations and who can

13
Jul
Export-Import Business or Trade Name

A sole proprietorship or partnership that is engaged in an export-import business can oper­ate under the name of the sole proprietor or one or more of the partners. There are no reg­istration requirements with any government agency. However, if the sole proprietorship or partnership operates under a fictitious name, it must file a fictitious business

1 Comment

13
Jul
Bank Accounts, Permits, and Licenses of Export-Import Business

An export-import firm must open a bank account with an international bank that can accom­modate specialized transactions such as letters of credit, foreign exchange payments, forfeit­ing, and so on. Some international banks have subsidiaries in importing countries that can verify the creditworthiness of foreign buyers. Sole proprietors and partnerships can open a bank account by

1 Comment

13
Jul
Location and Use of Professional Services for Export-Import Business

When the export-import business is small, it is economical to use one’s home as an office during the early phase of the operations. Besides saving money and travel time, using a por­tion of a home provides opportunities for deduction of expenses related to the business. All of the direct expenses for the business part of

3 Comments

13
Jul
Organization for Export: Industry Approach

The Small Business Administration (SBA) states that, besides multinational firms such as General Motors or IBM, there are many small-scale industries that export their output. For many of these companies, there are a number of organizational issues that need to be ad­dressed to achieve an optimal allocation of resources. Some of the issues include (1)

1 Comment

13
Jul
General Principles of Taxation for Export-Import Business

The United States levies taxes on the worldwide income of its citizens, residents, and business entities. The United States, the Netherlands, and Germany are some of the few countries that impose taxes on the basis of worldwide income; most other countries tax income only if it is earned within their territorial borders. For U.S. tax

1 Comment

13
Jul
Taxation of Export-Import Transactions

1. Taxation of U.S. Resident Aliens or Citizens U.S. citizens and resident aliens are taxed on their worldwide income. In general, the same rules apply irrespective of whether the income is earned in the United States or abroad. For­eign tax credits are allowed against U.S. tax liability to mitigate the effects of taxes by a

2 Comments

13
Jul
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