If you want to become a Non-Resident Importer in Canada, there are many things you need to understand. Being a Non-Resident Importer means taking up a lot of extra responsibility on behalf of your customers, and being familiar with an entire system of foreign laws and regulations. Although it isn’t necessarily difficult, the process can be overwhelming in the beginning.
To become a Non-Resident Importer in Canada, you will need to apply for a Canadian Business Number and register with the CBSA. Additionally, you will need to be familiar with all the importing and tax laws required to import your products into Canada, like the GST/HST and language and labeling laws.
Ordinarily, when a U.S. company wants to export products to Canada, it would require working with a Canadian partner and likely a Canadian Customs Broker. Once the goods reach the border, the shipment would be out of the exporter’s hands, and they would have to rely on the importer to manage the shipment from that point forward.
This sort of system naturally comes with its disadvantages. The exporter of the goods has no control over the products after they cross into Canada. It can also lead to mistakes on the partner’s part, higher costs overall, and far worse customer experience. But there is a solution: Non-Resident Importers.
Non-Resident Importers are companies that are based outside of Canada, yet can act as the importer of the goods without having to establish a location within Canada’s borders. This makes that company responsible for customs clearance instead of the customer purchasing the goods, making the experience much simpler for buyers.
Becoming a Non-Resident Importer can benefit your company in several ways. Even though it can be difficult at first to get used to all the additional responsibilities, it is well worth it to become a Non-Resident Importer if you export to Canada even a few times a year.
By taking control over both the exporting and importing sides, you will benefit from:
One of the biggest benefits of becoming a Non-Resident Importer is the amount of control it grants a company over its supply chain. By effectively acting as the exporter and the importer, the company can cut out several unnecessary middle-men, like additional carriers, business partners, and distributors. This not only saves money, but it also decreases the risk of something happening to the shipment.
Having a close control of the supply chain results in better reliability and consistency, fewer delays, and overall seamlessness to the process.
Becoming a Non-Resident Importer can lead to tremendous cost savings. When one company controls the export from the U.S. and the import into Canada, it can be a lot easier to consolidate shipments to get them through customs all at once. Then, the consolidated shipments can be broken up once in Canada, to be delivered to their respective customers.
By clearing multiple shipments at once, companies can save money on customs fees and inspections. Additionally, they could save a lot of time that would otherwise have been spent on waiting for each shipment to get through customs.
The costs aren’t only reduced just for the exporter, however. By not having a property in Canada and having to pay for lights and staff, importers can significantly reduce the cost to consumers. Lowering costs will always result in happy customers, and happy customers will return to buy again.
By operating as both the exporter and importer of record, tracking your shipments becomes a breeze. You get to control the shipment from the moment it leaves the warehouse to the moment it arrives at its destination, even as it crosses the border. As a Non-resident Importer, you would no longer have to wonder about what the importer does with the shipment once it crosses the border.
You can provide this accurate tracking data to your customers as well, to keep them in the loop of what’s happening to their purchases and where they are going.
When you control the entire shipment from start to finish, it can be a lot easier for you to determine the cost for your customers. You can guarantee no surprise fees, and you can have a clear idea of what it will cost to move the shipment to the border, clear customs, and deliver it to its destination. There are no other individuals involved with the movement of the freight that could suddenly change the price, add fees, or give an unreliable quote.
As the sole importer/exporter, you could accurately estimate the shipping costs, duties, taxes, and customs fees right away, and provide the customer with a reliable, simple price.
As a Non-Resident Importer, you could utilize a door-to-door shipping policy. This means that a freight forwarder, carrier company, or logistics company will take the goods from your factory, manufacturing plant, or warehouse, and deliver them to the border. After the goods clear customs, that company will organize to have the goods picked up on the other side, and delivered directly to the buyer’s warehouse. This can lower costs, since you only work with one company, and can make the process faster and simpler for everyone.
By becoming a Non-Resident Importer, you can easily expand your business reach into Canadian markets. The reason this is so easy is that you would not need to have any physical presence at all in Canada. You wouldn’t need to worry about managing a physical location, bills, and potentially Canadian employees; instead, you could import your goods into the country without ever leaving your office in the U.S.
Additionally, not only would you not need to worry about operating a location in Canada, but your status as a Non-Resident Importer can put your customers at ease, and make them more willing to buy from you than if you were just an exporter. Distributors can buy from your company as easily as they could buy from a domestic company, and not have to worry about the complicated importing process.
Now that you know all the ways that your business could benefit from becoming a Non-Resident Importer, you’re probably wondering how you can get started. Well, you’ll need to be familiar with the laws, restrictions, and agencies involved with importing goods into Canada, and there are several things you’re going to need to do to get registered. But don’t worry, the process isn’t difficult!
The first thing you will need to do is apply for a Canadian Business Number (BN). This is essentially like a tax ID number, and it is required for all Non-Residents that want to import into Canada.
This number appears as a string of 9 digits to identify your specific business, 2 letters to identify the program type, and 4 digits at the end as a reference to the program account. This BN is incredibly important and will be necessary for importing and exporting, invoicing, and paying taxes.
There are three different ways you could choose to apply for a BN with the Canada Revenue Agency (CRA):
Regardless of the method you choose, you will need to provide information like your company type, your contact information, and how much your imports in Canada are worth.
Once you have established your business with the CRA and received your BN, you will need to do one last thing before you can become an official Non-Resident Importer. In order for your goods to be accepted across the border, you will need to register with the Canada Border Services Agency (CBSA).
The CBSA is the agency in charge of regulating the flow of people and products across the border, much like the Customs and Border Protection (CBP) in the U.S. You would need to inform them of where you will be keeping the records of your shipments, for 6 years after the end of the current year.
If the records will be kept outside of Canada, you would need to obtain authorization from the CBSA. Additionally, you will also need authorization if you choose to utilize the services of a customs broker.
The primary goal of a Non-Resident Importer is to handle the customs clearance process on behalf of their Canadian buyers. Importing can be an intimidating endeavor, and most buyers would shy away from making a purchase if they knew they would have to deal with customs paperwork. If there were no obstacles between Canadian buyers and U.S. suppliers, there would be no reason for anyone not to source from the U.S.
By handling the customs clearance process for your buyers, you can ensure a stress-free experience for them. Canadian customers can purchase from you as easily as they could from a domestic company, which can give your business a huge advantage over your competition. However, with great opportunities comes great responsibilities.
As a Non-Resident Importer, it would be your responsibility to ensure that all the paperwork is filled out and managed correctly. One of the most important documents to get right is the commercial invoice, which has information on the size, quantity, and type of commodities, along with information on the manufacturer, importer, and buyer. Additionally, it will need to include an HS code, GST, shipping costs, and the selling price for the goods.
However, if the shipment is valued at more than CAD $2,500, a special type of invoice is required: A Canada Customs Invoice (CCI).
When creating invoices and deciding which invoice is required for your goods, remember to keep in mind Canada’s economic climate. The value of the Canadian dollar fluctuates, so just double-check to ensure you have the correct USD to CAD conversion before you confirm your calculations.
Depending on the type of commodity you import, you may be required to secure specific certifications or import permits from Participating Government Agencies (PGAs). Different commodities are regulated by different government agencies, just like within the U.S. Food, for example, is regulated by the Canada Food Inspection Agency (CFIA), while prescription drugs and controlled substances are regulated by Health Canada.
If you aren’t sure if your commodity requires a permit, or if you aren’t sure which agency to reach out to for a permit, you can search through the Automated Import Reference System (AIRS) to find out.
Canada is considered to be a bilingual nation at the federal level, although all the provinces are primarily English-speaking with the exception of Quebec. Because of this, any imports coming into Canada should be clearly labeled in both English and French. When importing into Quebec specifically, French should be at least equal in size and prominence to other languages on all labels. This language rule even applies to other things in Quebec, like street signs, advertisements, and user manuals.
Additionally, you should ensure that all measurements for your shipment, like net quantity statements and weight, are listed in metric terms instead of imperial. This applies to all import documents that you would need to submit.
The Harmonized Commodity Description and Coding System (HS) is the tariff classification system utilized in global trade. It is comprised of roughly 5,000 different commodity groups, each identified with a specific 6-digit code. The HS is used by almost all counties involved in international trade.
As the importer of record, it would be your responsibility to use the correct HS code on all import documents in order to ensure compliance. If you submit paperwork to the CBSA with the incorrect tariff information, your import could be seriously delayed, fined, or even rejected.
When shipping goods between the U.S. and Canada, there is an opportunity to reduce or completely eliminate duty rates. NAFTA, later replaced by the USMCA in 2018, makes duty exceptions possible for goods that are manufactured in one of the three countries involved in the free trade agreement: the U.S., Mexico, and Canada.
Although there are several requirements for qualifying for duty-free treatment, the most important part is the Certificate of Origin. An official Certificate of Origin contains much of the same information already present in the commercial invoice, but for the purpose of proving the manufacture was done within the U.S. or Mexico, and if necessary, the materials were also sourced from a USMCA country.
If you want to become a Non-Resident Importer, then you’re going to need to understand the GST/HST. There’s a lot to consider with these taxes, especially for an outside importer, so it’s important to have a solid understanding of what it entails.
To start, GST is an acronym for “Goods and Services Tax.” It is a federally mandated 5% tax that applies to all provinces within Canada, and covers most services and products, except for groceries, rent, and medical services.
In addition to the GST, many provinces have a “Provincial Sales Tax,” or PST. This is an additional tax that is imposed by the different provinces, and it varies from province to province. However, in Quebec, the tax is referred to as the “Quebec Sales Tax” or QST, and in Manitoba it is referred to as the “Retail Sales Tax” or RST. Only Alberta does not levy this additional tax.
Several provinces instead opt to use a “Harmonized Sales Tax” or HST in place of the other taxes. What this means is that the federal and provincial taxes are combined together, to create one single, convenient tax.
The provinces that use an HST are:
As a Non-Resident Importer, you will be registered for the GST/HST when you apply for a Canadian BN.
At R+L Global Logistics, we know how stressful it can be to become a Non-Resident Importer in Canada, and we can offer solutions to help with all your needs including shipping alcohol to Canada. With services like temperature-controlled, oversize, and expedited shipping, we can get any shipment to the border where our trusted Canadian cross border partners can deliver it to your customers. We work with you in states like Michigan and in cities in cross border towns like Port Huron.
If you’re trying to manage the challenges of becoming a Non-Resident Importer in Canada, don’t let shipping be one of the things you’re worried about. Give us a call, and we can handle moving your freight anywhere in Canada.
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