I. INTRODUCTION

Entering new international markets is undoubtedly a necessary decision for business growth and sustainability in today's globalized times. However, this process of business internationalization requires prior preparation of any organization, which allows it to take the step into the foreign market, under a controlled risk environment and adequate conditions of competitiveness and profitability.

In this context, it is essential to evaluate the strengths and weaknesses of the organization and the product to be marketed in the international environment, in order to determine whether the idiosyncrasy of the consumer at the destination, together with the legal, tax and related requirements, allow the organization to enter directly or indirectly into the specific market it plans to captivate.

However, this form of access entails a high-risk component, since the organization assumes and deals directly with the entire process, which, although previously studied and planned, does not fail to generate uncertainties and cultural and regulatory challenges that must be adequately addressed to ensure the success of the project.

As an alternative model, in the path of incursion into new foreign markets, we find that the so-called Lex Mercatoria allows the use of Agency and/or International Distribution contracts, whereby the parties join efforts to achieve the goal, which is none other than the penetration and positioning of a particular product in the territory where the Agent and/or Distributor is located.

Under this indirect model, Trading Companies have also emerged, present throughout the global geography, which are responsible for trading the goods of various local producers in international markets.

Trading Companies, given their infrastructure and in-depth knowledge of international trade, are an interesting option for domestic producers who plan to gradually access new international markets.

This type of companies are also used by business groups, with the difference that they are created as related companies within the group, dealing with exports of their own products, thus achieving highly effective corporate synergies. 

Given the importance of Trading Companies in the current times of integration, we will now delve into their regulatory environment and VAT treatment in Colombia.

II. INTERNATIONAL MARKETING CORPORATIONS IN COLOMBIA

In Colombia, the International Marketing Companies - IMC were created through Law 67 of December 26, 1979.

They are defined as legal entities whose main corporate purpose is the commercialization and sale of Colombian products abroad, acquired in the domestic market or manufactured by their member producers.

The IMC are authorized by the Ministry of Commerce, Industry and Tourism - MINCIT, for which they must accredit the legally established liquid assets, present market studies that incorporate the export plan, have an inventory control system that allows verifications and controls on national, imported and exported merchandise, and constitute a global guarantee.  

This type of companies must use in their corporate name the expression Sociedad de Comercialización Internacional or the acronym CI, once the MINCIT authorizes them, and the Dirección de Impuestos y Aduanas Nacionales - DIAN (National Tax and Customs Directorate) approves the respective guarantee.

The legislator established a legal presumption in the case of IMC, which consists in that it is presumed that the supplier carries out the export from the moment the International Marketing Company receives the goods and issues the Certificate to the Supplier-CP.

The PC is the supporting document that allows the supplier to prove to the IMC supplier that the export has been carried out.

The IMC is obliged to export the goods acquired from the national supplier, within a peremptory term of six (6) months, counted from the issuance of the PC.

If the IMC returns, totally or partially, the goods previously acquired from the local supplier, it must cancel or modify the PC respectively.

The authorization as IMC may be terminated by voluntary request of the party, or by loss derived from a sanctioning process.

III. VAT TREATMENT OF INTERNATIONAL TRADING COMPANIES

By virtue of the presumption of exportation established by the legislator, sales made by domestic suppliers to IMCs are treated as VAT exempt.

In this context, the CP issued by the SCI allows the supplier to request a refund of the VAT paid to produce the goods sold to the IMC.

It is important to note that the benefits assigned to the IMC, and therefore to its suppliers, are subject to compliance with the requirements established by law, particularly, the export of the goods within the term established by law, so that, if this requirement is not met, the transaction must be returned to its initial state, with the consequent obligation to cancel the exempted internal taxes, in addition to the customs and tax penalties that may arise.

It is also worth mentioning that given the export obligation that arises from the issuance of the PC, it is not appropriate to sell these goods to another IMC, for it to issue a new PC, since the peremptory term of six (6) months for the export would be null and void, and the validity of the VAT refund would be affected.

Finally, it is important to draw attention to the sales of goods to IMC by domestic suppliers located in Free Trade Zone, since in these cases the Colombian Customs Legislation expressly establishes that the sales will be treated as imports and therefore the SCI will not be able to issue a CP in the transaction.

IV. CONCLUSIONS

In the context of current globalization, commercial transactions no longer have local territories as their only sphere of action, and the global village has emerged as the new environment in which the various actors can enter into transactions without borders becoming a limiting factor for their development.

In this context, it is necessary for organizations to prepare themselves adequately to gain access to the new markets under optimum conditions.

Within this preparation, the definition of the incursion model to new markets is decisive, since, depending on whether it is a direct or indirect model, using Agencies, Distributors or Trading Companies, challenges will arise for the organization that must be identified in advance in order to achieve the objectives set.

The important thing is to keep in mind that each organization has its own DNA, which characterizes and individualizes it, so it is not possible to establish a single generic model that is replicated equally in all organizations.

In the end, only an adequate evaluation and therefore identification of the model to implement, is what will allow each organization, from its unique and unrepeatable essence, to advance in an environment of corporate certainty or uncertainty on the road to access new international markets.

Best regards.

Erwin