Business Scope of Import and Export Trade: 90% of Enterprises Got It Wrong!

Mr. Zhang recently registered a foreign trade company, but he had difficulties when filling in the business scope: which businesses can be included in the category of import and export trade? Ms. Li's cross-border e-commerce platform was suddenly spot-checked by the customs because the business scope did not match the actual business. These seemingly simple "business scope" issues often hide huge legal risks and business opportunities.

Business Scope is the legal boundary for enterprises to engage in business activities, which is particularly important for import and export trade enterprises. It not only determines which businesses an enterprise can carry out, but also directly relates to key links such as customs supervision, tax treatment, and foreign exchange settlement.

• Commodity Trade: The most common import and export business, including the purchase and sale of physical commodities such as raw materials, finished products, and semi-finished products
• Technology Trade: The cross-border transfer of patents, proprietary technologies, and trademark usage rights
• Service Trade: The provision of cross-border services such as transportation, insurance, and consulting

Many enterprises are prone to fall into the following misunderstandings when registering:

• Too Broad Scope: Filling in an overly broad business scope for the sake of "safety" may lead to a mismatch between the actual business and the registered information
• Vague Expression: Using vague expressions such as "related products" and "etc." may encounter obstacles when making customs declarations
• Ignoring Restrictions: Failing to notice that certain commodities require special qualifications or licenses

Zhongshitong suggests that enterprises adopt the following strategies:

• Precise Positioning: Select the most matching commodity and service categories according to the actual business needs
• Clear Classification: Refer to the Standard International Trade Classification (SITC) and HS Code System
• Reserve Space: Reserve appropriate space for business expansion, but it should not be overly broad

Special attention should be paid to certain special commodities:

• Medical devices, food, etc. involve health permits
• Chemical products may involve dangerous goods management
• Cultural products need to pay attention to content review

With the development of digital trade, new business forms such as Virtual Commodities and Data Services are challenging the traditional ways of defining the business scope. Mr. Zhang has recently been considering whether to include "cross-border transmission of digital content" in the company's business scope.

The import and export trade environment is changing rapidly. The business scope that was applicable last year may already be out of date this year. You might as well check your business license to see if it still meets the current business needs. Welcome to share your confusion or experience in choosing the business scope in the comment section.