planet.com – B2B Portal: Reduce costs and save on tariff expenses in compliance with the law with FLECS Technologies

How smart machine builders are recalculating their exports

While the customs dispute with the US was in full swing, I heard about a start-up associated with the University of Applied Sciences in Kempten, Allgäu. With a specially developed app, machine builders in the export business can avoid customs duties on essential parts of their software in compliance with the law. That made me curious.

The European mechanical and plant engineering industry is under considerable pressure. Geopolitical uncertainties, new customs duties, and increasing international competition are forcing companies to rethink their business models. At the same time, the importance of digitalization is growing far beyond mere networking: software now accompanies the entire life cycle of a machine and is becoming a decisive differentiating factor.

This is exactly where FLECS Technologies GmbH comes in. With its Flex App Store, the young company has developed a model that enables the separation of hardware and software – comparable to the smartphone principle. Machine builders can deliver their systems with basic software and provide all additional functions, extensions, or updates securely via the app store. This eliminates the outdated practice of USB sticks or CDs, which are both security-critical and cost-intensive.

Separate software provision – and how it works:

With FLECS, machine builders can decouple the system software from the physical product and provide it digitally via their own app store – legally compliant, scalable, and tailored precisely to the customer.

1. The machine is fully tested in Germany.

2. The software is provided as an app in the app store (accessible only to the respective customer).

3. The customer purchases the software separately in the destination country – either before shipment or on site via the protected app store.

4. After purchase, the customer receives a secure, exclusive download link.

5. The machine is exported with basic software and customs duties paid.

6. The machine is assembled in the destination country.

7. The software is downloaded from the app store and installed on the machine.

8. Final commissioning takes place on site at the customer’s premises.

US customs duties are no longer an issue

The benefits for the industry are manifold. On the one hand, the model allows machines to be updated quickly and securely worldwide without the need for expensive service technicians on site. On the other hand, the app store opens up completely new digital models – from subscription services to temporary additional functions.

In addition, there is a not inconsiderable advantage in the export business: if software is not delivered physically but as a download, the WTO moratorium exempts such “intangible” deliveries from customs duties. This reduces import duties and significantly lowers costs in international business. The founders of FLECS had the model reviewed by the Swabian Chamber of Industry and Commerce, a tax firm, and the consulting firm EY. All confirmed that no customs duties are payable on the software if it is transferred purely electronically.

FLECS Technologies has deliberately designed the model so that machine manufacturers retain full control over their customer relationships. The app store can be introduced as a white label solution in just a few weeks and strengthens competitiveness through both savings and more flexible business models. Initial references from the packaging and process industries demonstrate the potential, even if many companies are still reluctant to go public.

In the long term, FLECS has an even bigger vision: the virtualization of control systems and the establishment of “Industrial Control as a Service.” This would not only make machines more efficient, but also easier to connect with new technologies such as AI tools. For mechanical engineering, this opens up a way to simultaneously master the challenges of globalization and digitalization – and finally use software as an independent source of value.

FLECS Technologies GmbH with Patric Scholz (Marketing and Sales), Samuel Greising (Product Manager), and Alexander Reichert (CTO) look forward to hearing from you.

Source: 

Patric Scholz: patric(at)flecs.tech 

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