Commercial Card

Author: Hadise Motlagh, Qom, Iran 🇮🇷, Persian t.me/hadisemotlagh

Introduction

All individuals have concerns about having a commercial card and how to send goods to different countries when starting their exports.

Having a commercial card is very important in export affairs.

Even if some countries do not have comprehensive laws for its use.

This article will examine the commercial card system in several countries.

Review of Commercial Card

A commercial card is a financial tool issued by banks or financial institutions for companies and businesses to use for managing expenses, purchases, and improving cash flow.

In Iran, the commercial card has its own specific concepts, which are explained below.

In Iran, a commercial card is a document issued by the Chamber of Commerce, Industries, Mines, and Agriculture, allowing the holder to engage in commercial activities such as importing and exporting goods.

This card is issued to individuals and legal entities and serves as a sort of license for international transactions.

The conditions for renewal and revocation are such that the commercial card is valid for one year and then requires renewal.

To renew, the necessary documents must be submitted to the Chamber of Commerce.

Additionally, the revocation of the commercial card may occur due to reasons such as lack of commercial activity, outstanding debts, or commercial violations by the Chamber of Commerce.

The laws and regulations governing the commercial card are regulated by the Ministry of Industry, Mine, and Trade and the Chamber of Commerce.

These regulations include the requirements for obtaining, renewing, and revoking the card, as well as the duties and rights of the holders of the commercial card.

Therefore, we understand that obtaining a commercial card is not difficult, but the conditions for maintaining it may pose some challenges.

In other words, you can obtain it based on your business transactions, but if you do not understand and follow the proper usage conditions, it may result in serious consequences for you.

Commercial card in different countries

Countries such as Turkey, China, India, the United States, the European Union, Canada, Australia, Japan, South Korea, Brazil, and Saudi Arabia issue and use commercial cards.

Holders of these cards can participate in business programs, networking events, and trade shows.

Commercial cards play an important role in facilitating foreign trade and expanding international markets in these countries, contributing to economic growth.

However, it is important to note that obtaining a commercial card comes with some challenges.

In many countries, obtaining a commercial card involves complex and time-consuming administrative processes, and this bureaucracy can lead to delays in starting business activities and impose additional costs on traders.

Even in countries like the United States, the process of issuing a commercial card is often associated with administrative corruption, where some officials may use this process to receive bribes or engage in unfair practices.

This can also lead to inequality and discrimination in accessing these cards.

If you live in Europe and have a small business, a commercial card may not be suitable for you.

The costs associated with obtaining and maintaining a commercial card can be burdensome for small and medium-sized businesses.

Other costs such as administrative fees and taxes can impose a heavy financial burden on traders.

Moreover, in some advanced countries like South Korea, commercial cards impose many restrictions on commercial activities.

These restrictions may include limitations on the volume and type of tradable goods, which in turn can hinder the development of international trade.

While trade cards are an important and necessary tool for international trade, they also come with many challenges and issues that require reforms and improvements in processes and regulations at a global level.

Ultimately, even if we look at the laws of our own country, there may be even worse conditions.

In the whole world, the benefits of these cards, such as participation in international trade shows and facilitating banking transactions, are greater than in Iran.

This is because we are under sanctions in Iran and cannot take advantage of these opportunities.

Rent-seeking activities

Commercial card rents in Iran are considered one of the complex and challenging issues in the field of trade and economy.

A commercial card is a license that allows companies and individuals to engage in importing and exporting goods.

However, in practice, there are many abuses of these cards that have led to the emergence of rent-seeking and economic corruption.

If we were to examine the history of commercial cards, we would not find positive results.

This is because in the past, many individuals could obtain commercial cards using other people's names (such as low-income or illiterate individuals).

They would then use these cards for imports and exports, leading to rent-seeking activities.

This would result in the financial and legal responsibility falling on the individual whose name the card was issued under, allowing the main beneficiaries to escape from responsibilities.

In some cases, individuals had no knowledge of the commercial cards and their functionality, and did not know that heavy transactions were being made with them, ultimately leading to a travel ban.

For an elderly woman or man in a remote village, being unable to leave the country is not a big issue, so the person using the commercial card to evade taxes has increased their profits.

It is worth mentioning that in recent years, steps have been taken to prevent some of these incidents, but many individuals have still engaged in illegal activities through these commercial card rents.

Furthermore, some companies and individuals import goods at low tariffs using commercial cards and then sell them in the domestic market at higher prices without paying the actual taxes and duties.

Some individuals and companies receive commercial cards through special connections and relationships, benefiting from special privileges and facilities that are not accessible to the public.

Rent-seeking activities resulting from commercial cards in Iran are a serious economic problem that requires attention and serious action.

By implementing proposed solutions, effective steps can be taken to reduce these rents and improve the business environment in the country.

Transparency, strict monitoring, and legal actions against violators are measures that can help reduce abuses and increase economic justice.

To address these problems, there is a need to strengthen monitoring systems, amend relevant laws, and increase transparency in the issuance and use of commercial cards.

Advantages and Disadvantages of Commercial Card

A commercial card, as an international commercial license, can have many benefits for business owners and merchants.

A commercial card enables the import and export of goods, which can help expand markets and increase profitability for businesses.

Having a commercial card allows for membership in a chamber of commerce, providing access to business networks and collaboration opportunities.

Having a commercial card can help increase credibility and trust in international markets, which can lead to attracting new business partners and customers.

Additionally, a commercial card can facilitate banking and financial transactions related to international trade and improve access to financial facilities and services.

Alongside the numerous advantages of using a commercial card in Iran, there may also be some challenges and disadvantages that need to be considered.

Some disadvantages of commercial cards include:

• Bureaucracy and administrative complexities: The process of obtaining and renewing a commercial card can be time-consuming and complicated, requiring various administrative steps.
• High costs: The costs associated with obtaining, renewing, and maintaining a commercial card can be high, including registration fees, chamber of commerce membership, insurance, and taxes.
• Tax responsibilities: Commercial card holders have heavy tax responsibilities and must pay various taxes and levies, which can be challenging for small businesses.
• Legal and regulatory risks: Commercial card holders may face legal and regulatory risks, including compliance with complex commercial and tax laws and regulations.
• Issues arising from violations: In the event of tax or commercial violations, severe penalties are imposed on commercial card holders, including financial penalties or even revocation of the commercial card.
• Export and import restrictions: Commercial card holders may face strict restrictions and regulations on the export and import of goods, making their commercial processes more difficult. Therefore, before obtaining a commercial card, we must consider its aspects so that we do not encounter these problems.

Alternative Solutions to Commercial Cards 

In recent years, the discussion of replacing commercial cards in Iran has emerged as an important topic in the field of commerce and economy.

Commercial cards, which are issued as licenses for business activities inside and outside the country, have always faced challenges and problems.

You can seek help from companies active in customs clearance services, and these companies can act on your behalf in export or import activities through agency agreements.

It is important to note that customs clearance activities can be legally carried out by these companies in this field, and you should review and verify their legal documents before collaborating with them. 

A customs clearance agent can legally operate in this field under the following conditions:

- Passing the customs clearance exam and obtaining an activity permit.

- Holding Iranian citizenship and not being employed by the government.

- No criminal record or involvement in smuggling activities.

- Passing the customs law exam.

Ultimately, for commercial activities and if you do not meet the conditions to obtain a commercial card and necessary permits, you can start your activities by employing a customs clearance agent and signing a formal contract with these companies.

Furthermore, after gaining the necessary experience, you can apply for your personal commercial card.

My recommendation is to not directly hold a commercial card and instead use the two solutions mentioned.

In my opinion, if you want to engage in export activities, you can benefit from companies operating in customs clearance services.

These companies can act on your behalf in export or import activities through agency agreements.

Also, for commercial activities, if you do not meet the conditions to obtain a commercial card and necessary permits, you can start your activities by employing a customs clearance agent and signing a formal contract with these companies.

Therefore, after gaining the necessary experience, apply for your personal commercial card.

Ultimately, replacing commercial cards with a new and efficient system can be an effective step towards improving business conditions in Iran.

By using innovative technologies and establishing transparent and efficient systems, we can reduce corruption, increase transparency, and facilitate trade in the country.

These changes require cooperation and coordination among all relevant institutions, as well as active support from economic and commercial stakeholders.