Lowering the 'Entry Hurdles' for Overseas E-Commerce of Small and Medium Enterprises

As the government takes steps to enhance export customs clearance convenience and provide tax and financial support, the barriers for small and medium-sized enterprises (SMEs) to enter overseas e-commerce markets are expected to decrease.

The Korea Customs Service announced the "Customs Administration Support Plan for E-commerce Export Companies" with this purpose on the 22nd.

The support plan is based on discussions held at the "44th Ministerial Meeting on National Issues," chaired by the Prime Minister on the same day, and aims to support domestic small and medium export companies' entry into the global e-commerce market and their growth through it.

First, the Korea Customs Service will double the simplified export declaration amount threshold for SMEs from the current KRW 2 million or less to KRW 4 million or less to reduce their burden. The simplified export declaration system simplifies the declaration items compared to the general export declaration but provides the same benefits such as export performance recognition and customs refunds.

Going forward, when the overseas buyer is the same, multiple sellers (exporters) will be allowed to consolidate packaging and shipping of goods into one shipment. The purpose is to help export companies reduce logistics costs through consolidated packaging and shipping.

Additionally, to prevent export companies from receiving administrative sanctions for unintentional acts, exporters will be notified in advance of the expiration of the export goods loading compliance period. The support plan also includes improvements allowing exporters to directly issue export declaration certificates used for trade finance applications or foreign exchange remittances without going through customs brokers or other declarants.

Tax and financial support for export companies will also be expanded. Export companies will be able to have their export performance recognized by providing export list clearance data containing their business registration number and item number to the National Tax Service, enabling them to apply the VAT zero rate easily without complicated supporting documents.

Furthermore, the Korea Customs Service explained that the scope of customs refund eligibility will be expanded to include packaging materials used for export goods by e-commerce export companies. The annual refund performance requirement for the simplified fixed-amount refund, preferred by SMEs due to its simple application process, will be relaxed from KRW 600 million or less to KRW 800 million or less.

To facilitate easy receipt of export payments and trade finance applications, the system linkage between the Trade MyData platform, established by the Korea Customs Service last year, and bank internet banking will be expanded. The support plan also includes adding e-commerce export companies to the list of excellent companies provided by the Korea Customs Service to financial institutions for financial support.

In particular, to support the expansion of overseas market entry for small and medium export companies, the Korea Customs Service has agreed with the Japanese customs authorities to apply simplified customs procedures starting from October next year.

This aims to enable expedited customs clearance for sea express shipments exported from Korea to Japan when undergoing import customs procedures locally in Japan, thereby assisting entry into the Japanese market, the largest export market for Korean e-commerce goods.

Last year, by value, the export share of Korean e-commerce goods by country was highest for Japan at 36.8%, followed by the United States at 20.3%, China at 19.7%, and Singapore at 3.1%.

Additionally, the Korea Customs Service plans to establish a foundation for accurate e-commerce export statistics by requiring SMEs to record item numbers (HS codes) at the 2-digit level when exporting goods through e-commerce list clearance, enabling their use in overseas market development and export strategy formulation.

Ko Gwang-hyo, Commissioner of the Korea Customs Service, said, "We will faithfully implement the support plan so that e-commerce exports can become a new growth engine for the Korean economy," adding, "The Korea Customs Service will continue to spare no effort to support domestic export companies in leading the global e-commerce market."

This content was produced with the assistance of AI translation services.