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Trading Company

By: EconomyWatch Date: 30 June 2010

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Firms that are involved in international trade activities, i.e. the import and export of goods and services, are called trade companies. Since the operations of these companies span across national borders, they require international business licenses. Also, they are required to abide by the relevant trade agreements and policies set in place by both the producing and consuming countries. Regulations may define which goods are legitimate, how tariffs are to be calculated and what customs laws apply.

Import Trade Companies

These companies acquire goods produced in a foreign country and sell them in their country of origin. Trade companies sell imports at a price that covers the buying and transportation costs and applicable trade tariffs.

Export Trade Companies

Export companies arrange for the delivery of locally-produced goods for overseas orders. Export companies work with international buyers to process the product acquisition process. The activities involve ensuring the relevant documents, arranging for the desired goods and managing shipment and proper delivery. Some nations require export companies to acquire registration for international trade.

Logistics Trade Companies

Logistics trade companies provide man and material requirements to the overseas industry. To mitigate the cost of raw materials and labor, big corporations resort to logistics trade companies. As a part of outsourcing, logistics companies also provide transportation, warehousing and packaging services.

Representative Trade Companies

These companies aid exporting companies to grow their business. They provide the following services to exporters:

Advice on market strategies
Introduction to local manufacturers
Assistance in the completion of overseas orders
Performance evaluation for client companies
Exposure to government and private trade entities, such as the Ministry of Trade and Commerce or industrial federations

Representative trade companies also play an eminent role in the formulation of trade policies and procedures at the national level.

The international trade industry is also plagued by illegal practices that result in unregulated trade. Licensed trade companies work with the government of importing and exporting nations to curb illegitimate trade across borders.