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Import/Export in Argentina

Argentina

Import/Export in Argentina

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Argentina Import and Export

Argentina is the second largest economy in South America. It's a member of the G20 and the Mercosur trading block. Argentina has vast natural resources in agriculture, mining and energy including renewables. It has the highest English Proficiency Index score in Latin America (2019) and its people have a European style business culture. View live export opportunities in Argentina Find an online marketplace in Argentina Find export events for Argentina Growing market potential Despite high inflation and a devalued peso increasing the cost of imports, there are large scale investment plans in place for production and export of natural resources (Argentine Investment Agency, 2019). In the year to March 2020, UK goods exports to Argentina increased by 8.5% (ONS, 2019).

Argentina is the world’s 25th largest economy and the second largest in South America. Its Gross Domestic Product (GDP) per capita is the second highest in South America.

Over 100 UK companies operate in Argentina. This includes over 30 FTSE 100 companies such as BT, GSK, HSBC and Unilever. There is a range of small and medium sized UK companies in Argentina.

Strengths of the Argentine market include:

  • Major world producer of agricultural commodities
  • Unexploited shale oil and gas reserves
  • Large reserves of minerals and precious metals
  • Second largest manufacturing capability in South America
  • High level of professional skills, including highest English Proficiency Index in region
  • Sophisticated market with European tastes and business culture
  • Direct daily flights with the UK
  • Double taxation agreement with the UK
  • Member of MERCOSUR trading bloc


    Exporting to Argentina Guide

    Overview

    The main exports of Argentina are food, meat and manufacturing products. The main export partners of Argentina are Brazil, Chile, the United States, China and Spain.

    The main imports of Argentina are food, fuel, energy and capital goods. The main import partners of Argentina are Brazil, US, Germany, Italy and Spain.

    The Government of Argentina currently imposes quotas for the importation of peaches, white glasses for corrective spectacles, automobile parts, paper, pulp and footwear.

    Pharmaceuticals, chemical products, insecticides, veterinary products, medical devices, cosmetics, agricultural products, textiles and defence material require various approvals prior to import.

    Planning & Preparation

    In preparing to export your goods or services, you must not just assess, but scrutinise your potential, and prepare for the worst. This doesn't mean you have to negate all optimism; just don't get consumed by it.

    These are the market essentialities to examine:

    Next is the process of market entry in Argentina, which will always seem simpler on paper. Your main considerations will be:

    • A market strategy that, if needed, acknowledges international trade development

    • Financial resources in Argentina and backing

    • People, and how they can help develop your product for export / a new market

    • Erudition in local requirements in Argentina: packaging, pricing, labelling, etc

    • Again, erudition, but in the costs and payment procedures of exporting

    • Some of these factors alone may establish an unsuitability for your intended market, so research them thoroughly.

    Next, is your product cut-out for export? Think about:

    • The standards and regulations of products in your overseas market

    • The fees involved with altering your product, service and company for a foreign market

    Selling & Distribution

    To improve the chances of overseas success, you need to consider a few key issues. Sales presence, for instance, should be a top priority. Will you sell directly? Will you trade over the internet?Perhaps trade shows are more suitable? Could you benefit from a local partner who knows the market? Here are a few fundamental choices:

    • Get yourself a distributor who can sell on a local or national level

    • Sales agents can either sell a product for you, or alternatively acquaint you with potential clients or customers

    • Joint ventures in Argentina with local companies have gained in popularity, primarily because of their knowledge and established presence in the market. It is often a pricey option, however

    • Of course, you can also set up your own office, ensuring maximum control on all operations. This is obviously the most expensive of all your options

    A few things to remember. Firstly, when drawing up any contracts with agents or distributors, it is imperative to unequivocally define obligations such as delivery and payment

    Next, your intellectual property in Argentina (IP) may be jeopardised if it is not declared in each foreign country. This can often be a laborious process, so be prepared. Remember that patents are generally recognised only in their country of origin.

    Marketing

    Oh, the minefield of marketing in Argentina. Its no point squeezing a product or service into a new market with the shoehorn of indigenous merit. Your product or service must adapt, refine, alter,acclimatise, tailor and fashion itself to a market, not rely on some fatalistic hope of simply fitting in. Products are more pliable than people.

    As aforementioned, the necessity to contextualise your product or service socio-economically cant be overstated. It will be a paradoxical balance of market sensitivity and exploitation.Does your product require a drastic change to its image? Can it be changed to flatter a national idiom?

    Legal Obligations

    Needless to say, a keen attention to laws, legislation and regulation is paramount. VAT rules should be considered early; some products may not qualify for the HM Revenue & Customs zero-rate policy.

    Controls & Licenses

    Youll need to check if any of your products require an export license. Products such as chemicals and firearms, for instance,usually do.

    Comprehension of the Law

    Of course, upon entering a foreign country, a product or service is subject to, and must abide, national laws.

    Are You Ready To Export?

    Entering into the export market through an existing business may seem like an obvious way to increase your current revenue. In many cases, it is a viable means of expanding a business, and generating greater income. However, it is important to consider the logistics, timing and practicalities before jumping into the unknown.

    Exporting can extend your market, boost your turnover and prevent you having too great a dependence on your UK-based customers. But it isn't always an easy option. Starting to export poses a whole new set of challenges, from identifying promising markets and customers to ensuring that you can fulfil your export contracts. Developing new export markets takes time and money.

    Exporting isn't simply an add-on to your existing business. It should be part of an overall strategy to develop the business. Before you start exporting, it''s worth making sure you've developed a complete export plan looking at all the costs and risks involved. A well planned extension overseas can bring financial and reputational success, but a rushed job may just cause more damage than it is worth.

    Planning is key, so consider the following before making any decisions:

    • Exporting presents all the normal challenges of marketing in the UK - it''s up to you to find customers and convince them to buy from you. Understanding the market and its requirements is very important. Don't assume that because you know the domestic market, you automatically know foreign ones.

    • Exporting is usually a way of growing a successful business, rather than an easy way out for one that''s in trouble. If you''re struggling with limited finances or overworked employees, you may not have the resources to take on the extra work.

    • As an international business, you will need to cope with extra logistical problems, contractual issues and paperwork. You''ll probably want a contract drawn up using internationally recognised terms and conditions and standard commercial practices to make it clear what your responsibilities are.

    • There''s also a range of paperwork for sorting out transport, customs clearance and payments. These may take more time and effort than you expect, and must be dealt with in meticulous detail.

    • You need to comply with regulations in both the UK and overseas. For example, some goods that are allowed in the UK might not satisfy another country''s standards.

    • Exporting demands additional resources, both in terms of financing and skilled personnel. Be prepared for your expenditure on staff and expert advice and services to increase significantly before you start to see the benefits

    • With the additional costs, such as international transport, you may find you simply can''t compete with local suppliers. If the market only offers low margins, or you haven''t got the resources you need, you may decide that exporting isn't for you. Make sure that you plan carefully and know that you could present a competitive product or service overseas.

    Equally, if you've got a good product to offer and a well-run business, the chances are there will be opportunities for you out there in the export market. If the rewards you expect justify the investment and the risks, you should commit to your export plan and make it happen.

    The Plan

    Assess your skills and resources

    To start exporting successfully, you should take a systematic approach and decide what your export strategy is. You need to spend time and money planning, researching market opportunities and building relationships. You may also need to invest in modifying your product and service to suit overseas customers.


    Buy in help

    Once you've planned your exporting activities, you also need to devote extra resources to handling your exporting business. Marketing to overseas customers tends to be more demanding than selling within the UK. Exporting also needs special skills - such as organising international transport and handling customs clearance.

    Many businesses find that the best way to get started is to buy in the services they need, and build in-house skills and resources later. For example, you might use a local agent to sell, and a freight forwarder to handle deliveries.


    Source your capital

    Exporting can also be financially demanding. Customers often want credit from the time they receive the goods. For a long distance shipment, this could be weeks after you produced and shipped the goods, so you get paid later than you would by a customer in the UK. At the same time, you may have to meet extra costs like transport and insurance.

    The more successful you are, the greater the demands placed on your business will be. It''s worth planning ahead to be sure you have the capacity to handle the extra production, selling and after-sales support.


    Organise your paperwork

    When trading internationally the right paperwork is crucial. Missing or inaccurate documents can increase risks, lead to delays and extra costs, or even prevent a deal being completed.

    Whether you are importing or exporting,you need to understand what paperwork is required. Even if you use a freight forwarder or an agent, it''s still up to you to make sure the right documentation is available.


    Documentation Guide

    This guide explains the key documentation you need to use. It outlines what should be in your contracts and what paperwork you need for customs, transport and payment.

    Key documentation for international trade

    • There should be a clear written contract between buyer and seller, including details of exactly where goods will be delivered.

    • Specific documents may be needed to get the goods through customs and to work out the right duty and tax charges. Requirements of both exporting and importing countries should be addressed.

    • Documentation is needed to cover the transport of the goods and insurance during the journey.

    • The right paperwork can be an important part of the payment mechanism. It''s important to co-operate with your counterpart on getting the paperwork right.

    NB: If you''re shipping goods to a customer overseas, they should tell you what paperwork they require at their end. If you are dealing with a non-English speaking country,it can be a good idea to provide one set of commercial documents in the local language.


    International tradecontracts and Incoterms

    Different countries have different business cultures and even languages. It''s a good idea to make sureyou have a clear written contract to minimise the risk of misunderstandings.

    To avoid confusion, internationally agreed Incoterms should be used to spell out exactly what delivery terms are being agreed, such as:

    • where the goods will be delivered

    • who arranges transport

    • who is responsible for insuring the goods, and who pays for insurance

    • who handles customs procedures, and who pays any duties and taxes

    As well as including delivery details,the contract should cover payment. This should include what currency payment will be made in, how much will be paid, when payment is due and what payment method will be used.


    Export documentation

    You may need an export licence to export goods. For example, there are controls on exports of chemicals and military technology. Licence requirements may also depend on which country you are exporting to.


    Export declarations

    If you are selling to customers outside the EU, you need to declare your exports to HM Revenue & Customs (HMRC). This is generally done electronically, using the New Export System (NES). The declaration includes details of the classification of the goods being exported and which country they are going to.

    Alternatively, an authorised agent or freight forwarder can handle the customs declaration for you.


    VAT

    VAT will be 21% on most goods to be paid by the argentine importer at the time of importing.

    Import Duties

    All goods imported from non-MERCOSUR countries attract a common external import tariff that ranges between 0 to 35 percent, with the average rate being 14%. Some goods do not attract a single common rate although MERCOSUR member countries aim to converge towards a common external tariff for these goods.

    Exporting Made Easy - A Practical Guide: Selling Services and Products Overseas Through Agents and Distributors (including the Legal Bits!)

Click here to Ask an Expert about Import/Export in Argentina

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