Benefits of using a trading company
In order to develop and encourage the Brazilian exporting activity, the Government extended the purchase of goods in the domestic market for the specific purpose of exporting the same tax benefits granted by law to the actual exports.
So, with legal provision, were created conditions for the development of trading companies in Brazil. The activity of these companies should not be confused with the production for export or international trade representation. It is characterized especially by the purchase of goods in the internal market for subsequent export.
The trading companies that perform the intermediation between domestic producers and foreign importers are of great importance, since the export depends on specific knowledge, such as: trade procedures; markets and their characteristics; taxes and commercial risks; procedures for transportation and insurance hiring; payment methods; available funding options – without mentioning the difficulties due to differences of languages and customs. Holding specialized knowledge, appropriated structure and a suitable financial support, these companies facilitate product placement abroad.
After the acquisition of goods, the specialized activities and the risks related to international trade are handed on to the trading companies that accomplish their export without their respective producers – which in most cases are small and medium-sized businesses that alone wouldn’t be able to export their products – know any mechanism related to foreign trade.
The transactions carried out by “trading” are characterized mainly by:
- Exportation of products from different suppliers on a consolidated manner;
- The need of lower working capital due to matched operations;
- Better customer service by offering a wide range of products;
- Reduction of operating costs;
- Stocks that enable regular supply;
- Operations in multiple markets.