Comprehensive guide for non-resident importers (NRI) into Canada

Every day, thousands of businesses in the U.S. successfully export products to Canadian consumers, maximizing profit margins and expanding their market reach. The Non-Resident Importer (NRI) program streamlines this process, making it easier for U.S. companies to sell directly to Canadian customers.

NRI

What is a Non-Resident Importer (NRI)?

A Non-Resident Importer (NRI) is a business entity located outside of Canada that imports goods into Canada without having a physical presence within the country. The NRI acts as the Importer of Record (IOR) and is responsible for all aspects of the importation process, including compliance with Canadian customs regulations, payment of duties and taxes, and ensuring that goods meet Canadian standards.

Why nri

Who should consider becoming an NRI?

Becoming an NRI is ideal for businesses outside Canada that wish to sell goods directly to Canadian customers. It is particularly beneficial for:

  • e-commerce retailers looking to expand their market.
  • Manufacturers who want to distribute their products in Canada.
  • Wholesalers and distributors aiming to streamline their supply chain.
  • Foreign businesses seeking to gain a foothold in the Canadian market without establishing a physical presence.

Advantages:

Market Access:

Direct access to the Canadian market without needing a physical office or warehouse in Canada.

Control Over Supply Chain:

Greater control over the logistics and distribution of your products.

Competitive Pricing:

Ability to price goods more competitively by managing import costs and avoiding markups by intermediaries.

Streamlined Customs Process:

Simplified import process as the NRI handles all customs documentation and compliance.

Customer Experience:

Improved customer service with direct shipment and faster delivery times.

Disadvantages:

Regulatory Compliance:

Responsibility for complying with Canadian customs regulations and standards.

Duty and Tax Liabilities:

Obligation to pay import duties, taxes, and other related fees.

Administrative Burden:

Requirement to manage the import process, including documentation, customs clearance, and logistics.

Financial Risk:

Financial risk associated with duty and tax payments, currency exchange fluctuations, and potential delays in customs clearance.

Steps to Become an NRI

How do I become a Non-Resident Importer?

1. Register for a Business Number (BN):

Obtain a BN from the Canada Revenue Agency (CRA) to identify your business for tax purposes.

    Register Here: CRA Business Registration

    2. Set Up an Import/Export Account:

    Use your BN to register for an import/export account with the CRA.

      Register Here: CRA Import/Export Account

      3. Understand Canadian Customs Regulations:

      Familiarize yourself with Canadian customs regulations, including the requirements for importing goods into Canada.

        Learn More: CBSA Import Requirements

        4. Classify Your Goods:

        Determine the correct Harmonized System (HS) codes for your products to identify the applicable duties and taxes.

          HS Code Information: BorderBuddy Duty Calculator

          5. Calculate Duties and Taxes:

          Estimate the duties and taxes you will need to pay on your imports.

            Duty Calculator: BorderBuddy Duty Calculator

            6. Arrange Logistics and Shipping:

            Plan the logistics for shipping your goods to Canada, including choosing a reliable carrier and understanding shipping regulations.

            7. Partner with a Customs Broker:

            Consider working with a customs broker to help navigate the import process and ensure compliance with all regulations.

              Find a Broker: BorderBuddy Services

              Types

              Understanding taxes in the Canada

              Goods and Services Tax (GST):

              A federal tax of 5% on most goods and services in Canada, payable at the border on commercial and personal imports.

              Provincial Sales Tax (PST):

              A provincial tax that varies by province. Only Manitoba, British Columbia, Quebec, and Saskatchewan collect PST in addition to GST.

              Harmonized Sales Tax (HST):

              A combination of GST and PST, collected in provinces like Ontario, Prince Edward Island, Nova Scotia, New Brunswick, and Newfoundland and Labrador, with rates varying by province.

              What are the benefits of registering for GST/HST?

                Input Tax Credits (ITCs):

                Recover the GST/HST paid on Canadian expenses.

                Compliance:

                Avoid penalties and ensure compliance with Canadian tax laws.

                Registering for GST/HST

                  When do I have to register for the GST?

                  If your GST/HST taxable sales are over $30,000 annually and you are deemed to be carrying on business in Canada, you must register.

                  How do I register for GST/HST?

                  Download the Request for Business Number form or refer to the form located in the Appendix of this document – RC1: Request for Business Number. Complete and submit the form to the CRA.

                  Information for GST/HST Registrants

                    What is GST/HST charged on?

                    Most goods and services, with exceptions for zero-rated goods (e.g., basic groceries, prescription drugs) and tax-exempt goods (e.g., residential rents, most medical services).

                    What do I bill the taxes on?

                    • Value of the goods
                    • Freight (if terms are FOB Canada)
                    • Brokerage fees
                    • Total amount of Duty, Excise Tax, and SIMA tax if applicable

                    How often do I have to file my GST/HST return?

                    • Annual taxable supplies threshold amounts dictate filing frequency.
                    • $1,500,000 or less: Annual (optional quarterly)
                    • More than $1,500,000: Quarterly (optional monthly)
                    • More than $6,000,000: Monthly

                    When do I have to have my return filed by?

                    • Annual filers: No later than 3 months after the end of the period.
                    • Monthly or quarterly filers: One month after the end of your reporting period.

                    Information for Non-GST/HST Registrants

                      Can I pass on the GST/HST to my customers if I am not registered?

                      Yes, using the Flow-Through Method, where you provide satisfactory proof of GST/HST paid at import to your GST/HST-registered customers, allowing them to claim ITCs.

                      What if my client refuses to use the Flow-Through Method?

                      Becoming a GST registrant is the only way to ensure you are not responsible for the GST/HST.

                      Why us

                      How BorderBuddy can help you

                      How can BorderBuddy assist me as a Non-Resident Importer?

                      BorderBuddy offers comprehensive services to help NRIs navigate the complexities of importing into the U.S., including:

                      Customs Brokerage Services:

                      Expert assistance with customs clearance, documentation, and compliance.

                      Duty and Tax Calculation:

                      Accurate estimation and payment of duties and taxes.

                      Logistics Support:

                      Coordination of shipping and logistics to ensure timely delivery of goods.

                      Regulatory Guidance:

                      Advice on U.S. customs regulations and import requirements.

                      Ongoing Support:

                      Continuous support to address any issues that arise during the import process.

                      For more information and personalized assistance, contact BorderBuddy today.

                      By understanding the requirements and processes involved in becoming a Non-Resident Importer, you can effectively expand your business into the Canadian market. BorderBuddy is here to help you every step of the way.