Digitalization

Doing business across country borders can bring with it its difficulties. All countries have different rules and regulations. But the xChange Wallet is here to make it easier for you to run your business! Paperwork, approvals, and transfers. On a good day, there are no problems. On a bad day, well... In container logistics doing business with firms overseas is pretty much inevitable. And dealing with different country policies for every single transaction can be a time-consuming ordeal. Many of the users of the xChange platform work from countries such as China, Pakistan, and India. We have, therefore, dug into the different rules and regulations that can pose as hiccups on the way for a smooth transaction across countries. Here is a short overview of some of the rules in these three countries. And how the xChange Wallet can help you and your business. You’re a pro and already know everything about payments? Skip to see how the xChange Wallet can help you. India India’s export is as adverse as it can get. With a major export in everything from precious metals and computers to pharmaceuticals and clothing. Placed as the 18th largest exporter worldwide many international transactions go to and from the Indian banks every day. Despite ranking so high, the recent report Economic Survey 2019-20 states that it’s still easier to import to India then it is to export. The highlights from the report are mainly focused on the lack of infrastructure to accommodate this increasing demand. However, that’s not the only thing that can be cause for frustration for Indian firms exporting goods. So can the international transactions to their business partners. An important buzzword when it comes to these transactions is ‘Justified’. According to the Indian law firm Legal Helpline India, all transactions must be “justified and proper”. And to be justified you, as an Indian firm, need to be on top of your paperwork for every transaction. Beware of taxes You also need to have papers available for the bank to confirm that all taxes have been paid and deposited into the government treasury. If you fail to report a transfer on your taxes in India, you can get a penalty on 10 percent, 50 percent, or 200 percent on the taxes owed. You must also make sure to have the appropriate documents for the firm you’re making business transactions with. Such as their tax residency certificate in effect proving that they reside outside of India, to avoid extra taxation of the transferred payment. “If the Indian company is receiving some money, it has to justify the same. Tax liabilities are created in tonality of the transaction, if applicable not on each transaction,” Legal Helpline India states. Having your transactions deemed justified can sometimes be a lengthy procedure. This is where the xChange Wallet can help you! Skip to see how the xChange Wallet can help you. China The world leader of exporting has for years been China. The country exported for more than 2,49 trillion USD in 2019. With the many international deals between businesses, the process of outward remittances has been changed to run more smoothly. But that doesn’t mean you won’t hit any bumps on the road: “Limits will depend on the size of the enterprise, and no definitive numbers can be given, but basically if a foreign exchange transaction significantly exceeds the normal company cashflow, you should expect an investigation from relevant authorities. For regular Chinese citizens, this limit will lie at around USD 50.000, but again like everything in China for both corporate entities and individuals a lot will depend on you “guanxi” or your social circle,” states a Chinese foreign trade partner at the law firm Josh and Mak International. Approval from the bank Even though the process for payments abroad has been improved over time, Chinese firms can’t get around the paperwork that’s needed for each transaction to satisfy the authorities. It is documents such as the purchase agreement, that has to be registered by the bank. When the bank has accepted the agreement, the overseas payments can be made. But due to the U.S.-China trade war, there might be a little help on its way to small and micro cross-border e-commerce enterprises engaging in the trade in goods. Here, the thought is to minimize the paperwork there normally is associated with being permitted to trade overseas with foreign exchange. The handling fees average on 1 percent of the amount that is being transferred. But these fees vary depending on the bank. If you want to avoid having to deal with the work for the many transactions with your business partners, then the xChange Wallet can help you. Skip to see how the xChange Wallet can ease your work. Pakistan In Pakistan problems with dishonesty, tax evasion, and money laundering have led to specific processes on foreign exchange and remittance as well as on forex payments. The cornerstone in foreign exchanges in Pakistan is the Authorized Dealers. You need these dealers when your firm has to pay companies in other countries and currencies. “There is no restriction on foreign exchange and remittance out of proper trading accounts over crystal clear import transactions unless the buyer is misrepresenting their tax and import license status to you,” states Barrister Aemen Zulfikar Maluka, executive director and founder of the Pakistani law firm Josh and Mak International, who also has a branch in China. Authorized Dealers are key That, however, doesn’t mean that there aren’t procedures to be followed. If you want to make a foreign exchange and remittance you need to get in contact with an Authorized Dealer. Foreign payments and remittances have to go through an Authorized Dealer, who also can open a letter of credit for you. But before they can do either, there are a couple of papers, they need to acquire. According to barrister Maluka, when the amount of the transaction is Rs 1.500.000 or over (approximately $ 20.000) the authorized dealer “should obtain a confidential report on the exporter from their branches or correspondents abroad or in their discretion satisfy themselves as to the standing of the shipper by consulting standard books of reference issued by international credit agencies”. Even with the limit of $ 20.000 the Authorized Dealers are still obligated to make sure the contract between the importer and exporter is valid. That way the dealer trusts that both parties will hold up their end of the deal. If you want to use a container for importing goods, there are a number of papers you must submit to an Authorized Dealer. The dealer has to receive and approve the Electronic Import Form you send them. If they approve it, you will then have to attach the Goods Declaration. You can find the user manual for importers here. As well as the user manual for the dealings with the Authorized Dealers. These procedures are in place for every foreign exchange transaction as well as a remittance. Something that can take up a lot of time and result in unreliable cash flows, depending on when you get your transaction approved. This is where the xChange Wallet can help you! xChange Wallet to make your life easier We all know the stress and trouble that comes with managing payments from one country to another. And in the shipping industry, it’s pretty much impossible to only make deals with companies residing in the same country as yourself. But it shouldn’t have to be so difficult to make cross border arrangements. That is why Container xChange has invented the xChange Wallet. We want to reduce the quantities of transfers for you on the online xChange platform. As a member of xChange, the payment handling feature is already available for you. All you have to do is activate it. With the xChange Wallet instead of you having to deal with five different companies and country regulations, you only need to deal with one: Container xChange. You receive one consolidated invoice from xChange. xChange will then make sure all your partners are paid. We take care of all credits and charges – even transactions you have agreed to outside of the xChange platform. Click on the banner below and see how you can activate the xChange Wallet!

The Future of Container Logistics

Digitalization is the future of the shipping industry and it is changing things for the better. Here we talk about the impact of digitalization and the upcoming trends.