Top FAQs About Starting Your First Import Export Business

Starting your first import-export business is both exciting and stressful. There are plenty of opportunities for your business to succeed in the international space, as long as you diligently educate yourself about the ins and outs of importing and exporting. The import-export industry is full of various regulations, fluctuating trade agreements, and complicated processes. It’s easy to become overwhelmed by the trade jargon and bureaucratic details. Many new importers and exporters find themselves brimming with questions about the import-export process. Searching for answers typically takes them to a dense government agency webpage that only mystifies them further. This is often why hiring a broker can eliminate some of these frustrations and simplify the process. Here are some of the most common questions from those new to the industry. While these FAQs are not exhaustive, they cover the basics that will help you as you start your first import-export business. Do you have any questions that aren’t on this list? Leave a comment below and we’ll get back to you soon.

Do I need a license to import goods into the US?

It depends on what you’re importing. In most cases, you don’t need an import license. For some products, including dairy products, wildlife, drugs, alcohol, firearms, explosives, and radioactive materials, you may need to obtain an import license from the US Customs and Border Protection (CBP) or another government agency. Check out these guidelines to determine whether you need an import license.Whether or not you need an import license, you will most likely need to file entry forms and other documents with the CBP within 15 days of your shipment arriving. Make sure to gather these documents throughout the shipment process so you can submit them on time.

Do I need a license to export goods from the US?

The good news is that 95% of goods do not require an export license. Consult the Bureau of Industry and Security’s Commerce Control List to see if your products are listed there. If they aren’t, you most likely won’t need an export license, unless you’re attempting to export to an embargoed country.Other agencies that may require you to get an export license include the Nuclear Regulatory Commission, the US Food and Drug Administration, and the US Department of State’s Directorate of Defense Trade Controls.

What are the requirements for exporting from the US to Canada?

Due to the US-Mexico-Canada Agreement (USMCA), which has replaced the North American Free Trade Agreement (NAFTA), most exporters won’t need to pay import duties in Canada. There is, however, a Goods and Services Tax (GST) that must be paid at the border. If you plan to make multiple shipments into Canada, you could benefit from becoming a non-resident importer.There are numerous documents required when exporting from the US to Canada, including a proforma invoice, packing list, bill of lading, USMCA certificate of origin, sales contract, and customs declaration. Further requirements depend on which goods you’re exporting.

Do I need international insurance for my import-export business?

There are many risks your goods face while in transit. It’s best to have the right international insurance in order to protect your company against loss. If you have employees, it’s even more important for you to have adequate insurance coverage.Of course, there are several different kinds of international insurance to choose from. Refer to this guide in order to determine which kind of insurance is most suitable for your import-export business.

How much do I need to pay in customs fees and duties?

If you’re importing to the US, you can calculate the import duties based on the value of your product, how your product is classified, and which country you’re importing from. Your goods may also be subject to the merchandise processing fee (MPF) and harbor maintenance fee (HMF).If you’re exporting from the US, your import duties will depend on which country you’re exporting to. Countries that have a free trade agreement (FTA) with the US may not require you to pay import duties.

Do I need to hire a customs broker?

Hiring a customs broker makes things much easier for your import-export company. Because a customs broker is an expert in the field, they keep track of the constantly changing regulations surrounding importing and exporting to various countries. They can also assist with properly classifying your goods and calculating the correct import duties.While it may seem like hiring a customs broker is an additional cost, a customs broker can actually save you money. They prevent you from making costly mistakes when it comes to filling out paperwork and making tax payments. Hiring a customs broker can help your shipments clear customs more efficiently. At BorderBuddy, we offer experienced customs broker services to small, medium, and large businesses.

What is an importer security filing?

An importer security filing (ISF) is a collection of cargo information that must be submitted to the CBP at least 24 hours before your goods are loaded onto a vessel bound for the US. You only need to submit an ISF if your goods are arriving by ocean freight, so air freight is exempt from this requirement.To learn more about the specific data that needs to be included in your ISF, visit the CBP’s informational page regarding the new rule. Your customs broker can help compile the data needed.

Which countries have the lowest tariffs?

Countries that have a free trade agreement (FTA) with your country are likely to have the lowest tariff rates. An FTA is an agreement between two or more countries that reduces tariff rates and removes other barriers to trade.The US currently has a free trade agreement with the following countries: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore. Importing or exporting to one of these countries will give you a lower tariff rate.

How does the US-China trade war affect me as an importer?

The US-China trade war is ongoing, and the main consequence it has for importers is increased tariffs. If you’re thinking about finding a supplier in China, it might be best to look in Southeast Asia instead.Still, there are many companies continuing to import from China to the US. If you go that route, make sure you’re aware of how much you need to pay in tariffs. Keep an eye on the news to monitor any changes in the US-China trade war and consider how they might affect your import-export business.

Is selling internationally on Etsy or Amazon considered exporting?

Yes, exporting is defined as shipping an item from one country to another. Selling internationally on Etsy, Amazon, or any other website is therefore considered exporting. Each platform has its own process for international shipping.With most online marketplaces, you’re able to choose which countries you’d like to ship to. Make sure you check all of the specific requirements before opening up your product listings to international customers.