Foreign economic activity (VED)

Foreign economic activity (VED): everything a company does with foreign partners. This is foreign trade in goods, work and services, as well as investment, transfer of intellectual property rights, joint projects and loans.

Foreign economic activity and foreign trade

Foreign trade activity is part of foreign economic activity: trade in goods, services and intellectual property. Its framework is set by Federal Law No. 164-FZ. When companies say they “work in VED”, they usually mean import and export specifically.

What governs it

• Foreign trade: Federal Law No. 164-FZ.
• Money: the currency regulation law (Federal Law No. 173-FZ) and Bank of Russia instructions.
• Goods at the border: the EAEU Customs Code and decisions of the Eurasian Economic Commission.
• Taxes: the Tax Code, including VAT on import and export.
• The deal itself: the contract, the governing law, international conventions and the Incoterms rules.

What a deal consists of

1. Finding and checking a counterparty.
2. The contract: subject, price, currency, delivery and payment terms.
3. Paying or receiving payment, currency control.
4. Logistics and customs clearance.
5. Closing documents and reporting.

What to watch for

The weak spot of foreign economic activity for Russian companies today is settlements. The goods are there, the logistics are there, but the payment does not go through or costs too much. So the payment question is worth settling before the contract is signed, not after.

VEDmost takes care of the payment side of the deal: we select an agent and a route for the payment, prepare the agency agreement and the payment order, and follow the payment through to execution. The rate and the fee are written in the payment order before the roubles are debited. More on the How it works page.