i wanted to ask if i run an import/export business in egypt and i work on commission for a foreign cement producer in greece . and a company in saudi arabia wants to buy cement . can i send my offer and then the saudi buyer sends me a transferrable letter of credit and then i can transfer the letter of credit to the producer in greece ???? its a complicated question iam sorry
does these things usually occur in import/export busnisses or not ???
from : Mr. Mansur
Yes, gentleman in Egypt — you can transfer the L/C to Greece ; or you can ask Saudi Arabia to open L/C directly favouring the beneficiary (Greece) ; in any way you are in general supposed to get your commission from the producer/supplier/beneficiary in Greece.
Regards.
Mansur
17 Sep 2006
{ 4 comments… read them below or add one }
Of course you can.
But study the technicalities.
In practice the letter of credit will go directly to the seller, because he is the owner of the goods. You must get a contract from he seller recognizing you a commission as an agent. If not, he will "jump" over you.
It would be different if you buy the product and simultaneously sell it. But the expenses will be higher, and you need capital to invest, probably.
References :
from : Mr. Mansur
Yes, gentleman in Egypt — you can transfer the L/C to Greece ; or you can ask Saudi Arabia to open L/C directly favouring the beneficiary (Greece) ; in any way you are in general supposed to get your commission from the producer/supplier/beneficiary in Greece.
Regards.
Mansur
17 Sep 2006
References :
Here is a resource for you. We have done extensive work in the construction materials industry in Greece, Egypt and Saudi Arabia:
http://www.export-expert.net
References :
This is a very common practice in international trade. What you are referring to is a back-to-back letter of credit. There is a very good series of articles on letters of credit, including a B2B L/C, at the International Business Training website.
References :
http://www.i-b-t.net/articles.asp?author=CHRIS%20LIDBERG