Non-Canadian Retailers: Why You Should Become a Non-Resident Importer
Becoming a Non-Resident Importer can prove to be a boon for a vendor who is looking to tap into the Canadian market.
When it comes to getting goods across the border, those involved are either on the exporting end (i.e. sending the goods) or on the importing end (i.e. receiving the goods.) Exporters and importers each have their own due diligence to pay when making these transactions; for example, an importer is responsible for paying duty fees/taxes and ensuring their goods are compliant with Canadian regulations, while exporters must arrange shipping and properly classify and verify the origin of their goods. In many cases, the importer is a customer purchasing goods from a vendor who is the exporter. Dividing the workload between two entities can complicate the transaction process—and that’s where Non-Resident Importers come in.
Non-Resident Importers (NRI) handle the entire process of getting goods across the border and into the hands of customers. They serve as both the exporter and the importer—more specifically, they act as the Importer of Record (IOR)—and assume full responsibility throughout the process, from shipping to covering additional fees to ensuring that the goods they are importing are compliant. This can easily be accomplished by a company who has a physical presence both outside and inside of Canada, but for vendors who function outside of Canada and want to access the thriving, receptive Canadian market, becoming a Non-Resident Importer is easily one of the most efficient methods.
What does it mean to become a Non-Resident Importer?
To start, your business must not have a physical presence in Canada. There can be a multitude of reasons for why a business wouldn’t want to establish a location in Canada: high real estate costs, income taxes, or simply the inability to physically expand.
You must then register with Canada’s Non-Resident Importer program. This can be done either as an individual or as an organization, and is usually done via the help of a customs broker.
You will also have to obtain a Business Number from the Canada Revenue Agency (CRA), which is used to identify an entity in revenue-related business, and an Importer Number which is used in customs clearance documentation. This integrates your business into Canadian database systems. You will also be given the opportunity to get a GST/HST number if your business qualifies for one (ex. if your annual sales exceed $30,000 CAD, you must obtain a GST/HST number!) This allows you to charge the cost of GST/HST from the consumer in order to pay it to CBSA.
As an NRI, you have the option to ship your goods to Canadian warehouses, distributors, or even directly to your customers.
Benefits of becoming a Non-Resident Importer
By becoming an NRI, a vendor gains access to the Canadian market which enables them to compete not only with businesses in their original country, but with Canadian businesses as well. And not only is a vendor competing in these markets, but there is a very good chance they have a competitive advantage due to easing the strain off of consumers by consolidating shipments to them.
NRI’s have full control over the importation process. There is generally no back-and-forth over what documentation must be provided and by who; this simplifies and expedites the process.
Vendors gain the advantage of convenience for their consumers because of this. With vendors having to handle the cost and arrangements of shipping, as well as additional fees such as duties and taxes, consumers only have to pay one single agreed upon price without surprise fees after the fact. This sort of simplicity is immensely appealing to consumers because not only does it apply to the goods they are purchasing, but it can also apply if the vendor plans to send samples of their goods or warranty replacements. Only having to pay a single, pre-determined amount (or even none at all) can give your customers peace of mind.
Additionally, the vendor becomes the primary point of contact throughout the shipping process. Being able to provide customer service to that level can build trust between a consumer and a vendor, instead of having to contact a carrier, fulfillment service, or even the CBSA.
That’s not to say that there aren’t pitfalls to the Non-Resident Importer program, however. You must become aware of the heightened responsibility of acting as an NRI:
You will be responsible for collecting and remitting taxes to the CRA. This must be done on a regular basis or the vendor could incur penalties regarding tax evasion. You are also responsible for all shipping costs, which can sometimes rival the value of the goods you are selling; for this reason, some NRI’s may limit or completely restrict the availability of shipping into remote areas of Canada.
You must be educated in how to classify your goods based on the Canadian Harmonized System tariff codes. Most items are organized and easily classified with the appropriate duty rates appended to them, but this can become complicated if your goods toe the line between two subheadings or aren’t defined at all.
All customs clearance documentation must be diligently and correctly filled out. This can include certificates of origin, bills of sale, invoices, bills of lading, and necessary permits. Failing to provide accurate documentation can incur penalties for the vendor as well.
Despite these additional considerations, becoming a Non-Resident Importer can prove to be a boon for a vendor who is looking to tap into the Canadian market. Consumers greatly enjoy the convenience of not having to take care of these extra steps themselves, as well as being able to pay a single all-in price for their favorite items.
Are you interested in becoming a Non-Resident Importer? A.D. Rutherford can provide everything you need in order to join the NRI program and get you on the fast track to accessing the Canadian market. See our page on Non-Resident Importer services and contact us for a no obligation rate quotation. Getting started is just that easy!