Starting an import–export business is an exciting journey. Whether you dream of shipping spices across continents, exporting textiles, or bringing in new technologies to India, international trade can open up endless opportunities. But while the business side sounds glamorous, the compliance side is what actually keeps everything running smoothly. If you’re planning to step into this world, you’ve probably heard about registrations like GST, IEC, and various licenses. But there’s one more code that is becoming just as important: your Legal Entity Identifier, or LEI. If you’re new to this term, don’t worry. In this article, we’ll break it
down in the simplest way possible and explain why having an LEI can make or break your import export journey.
What is an LEI?
Think of an LEI as your business’s global passport. It’s a unique 20-digit code issued to companies, partnerships, and other legal entities. Unlike your PAN or GST number, which mostly work within India, an LEI works worldwide. It’s recognized across banks, regulators, and financial institutions in over 200 countries. Why was it created? To make global financial transactions more transparent and secure. Regulators worldwide wanted a system where every company involved in cross-border dealings could be identified easily. The LEI was born out of this need and is now managed under the Global Legal Entity Identifier Foundation (GLEIF).
Why Does an Import/Export Business Need an LEI?
When you run an import–export business, one of the most important aspects is moving money across borders. Whether it’s receiving payments from a foreign buyer or paying for shipments from an overseas supplier, these transactions flow through the banking system. And this is where the LEI comes in. In India, the Reserve Bank of India (RBI) has made LEIs mandatory for cross-border transactions above ₹50 crore. But even if your business isn’t hitting that threshold yet, most banks have started asking for it to process international payments smoothly. Having an LEI saves you from delays, extra paperwork, and repeated questions from banks. Another reason is trust. Imagine you’re dealing with a buyer in Europe or the US. Before signing a contract, they may want to verify who you are. With an LEI, your business instantly shows up in the global GLEIF database. This reassures foreign partners that you’re legitimate, compliant, and easy to trace if needed. In international trade, where scams and fraud are risks, that credibility can win you deals.
How LEI Complements Other Registrations
As a business owner, you might wonder: “I already have a PAN, GST, and IEC. Why do I need another code?” The answer is that each of these identifiers serves a different purpose. Your PAN helps the tax department recognize your business. Your GST number connects you to the Indian tax system. Your IEC (Import Export Code) allows you to trade goods across borders. But none of these identifiers work globally in the financial system. That’s exactly the gap the LEI fills. While IEC helps you ship goods, LEI helps you move money. Together, they complete your compliance stack for import–export operations.
Benefits of Having an LEI for Import/Export Businesses
The practical benefits of having an LEI are worth considering if you want your business to grow internationally. First, it simplifies cross-border payments. Banks prefer dealing with businesses that already have their LEI because it reduces their own compliance burden. Second, it opens doors to trade finance. If you’re applying for letters of credit or export financing, lenders will likely ask for your LEI. Having it ready speeds up approvals and makes you look professional.
Third, it enhances your credibility with global buyers and suppliers. When they search your LEI on the GLEIF database, they see you as a verified entity. This can give you an edge over competitors who don’t have that transparency.
Lastly, it future-proofs your business. Regulations are moving fast, and many countries are expanding LEI requirements to cover more types of trade transactions. Getting your LEI early means you won’t be caught off guard when rules tighten further.
How to Get an LEI
The good news is that obtaining an LEI isn’t complicated. In India, you can apply through a GLEIF-accredited Local Operating Unit (LOU) such as LEI International Pvt. Ltd. (TNV LEI). The process is online, documentation is simple, and you can receive your code within a short timeframe. You’ll typically need basic business documents like your Certificate of Incorporation, PAN, and proof of address. Once issued, your LEI is valid for one year and needs annual renewal to stay active in the global database.
Making Compliance Your Competitive Advantage
Too often, entrepreneurs treat compliance as a headache. But in international trade, compliance is actually your competitive edge. Having all your registrations in place, including your LEI, means smoother operations, faster payments, and more trust from partners. Think of it this way: if two exporters are bidding for the same buyer, the one with an LEI looks more reliable because they are already part of the global financial transparency network. In today’s world, trust isn’t just earned by words, it’s backed by data that anyone can verify.
Final Thoughts
Starting an import–export business is about much more than sourcing products and finding buyers. It’s about building a system where your business is recognized, trusted, and compliant across borders. An LEI is a small step that makes a big difference in this process. If you’re serious about entering international markets, getting your LEI should be right at the top of your checklist, alongside your GST and IEC. It’s not just about following rules, it’s about giving your business the credibility and transparency it needs to succeed on a global stage. At TNV-LEI (LEI International Pvt. Ltd.), we help businesses like yours get their LEI quickly,
easily, and at the best possible cost. If you’re planning to start your import–export journey, let us help you secure your global identity today.