When a company intends to import products, it quickly discovers that it has to have a legal presence or a delegate in the country where the goods will be imported.
Introduction to Importer of Record Service
The IOR Service, i.e., importer of record service, responsible for handling all local legal obligations relating to import taxes, levies, customs, and documentation, plays a crucial part in this.
Must your business serve as its own IOR provider? Or would using an outside Importer of Record be more suitable? The answer to this is dependent on several factors. The following are the six topmost reasons that make IOR Service the preferable option.
Goods sold by the seller on (DDP) incoterms
This frequent occurrence is when a merchant, reseller, or dealer sells Products to a buyer with a global presence and stipulates in the contract that they would handle all logistics. The Delivered Duties Paid (DDP) incoterm frequently uses arrangements of this nature.
The Delivered Duties Paid (DDP) incoterms reflect the seller’s utmost financial and risk-taking accountability; therefore, the import procedure must go without a hitch.
If the vendor lacks an entity within the country or if their local staff doesn’t have the understanding and know-how of the IOR’s job, then the best option to reduce the risks connected with The Delivered Duties Paid agreements is to use an external IOR service.
The customer doesn’t wish to be named the IOR
The customer may not wish to be named as the IOR for various reasons, such as if the products are destined for a small, far off place or an office where staff members’ jobs are unrelated to importation or Trade Compliance.
Another reason could be that the products are owned by the company’s headquarters elsewhere yet would be considered taxable assets if imported against its local organization.
The end user lacks a local legal body
In data centers, a large volume of rack space is rented or used by some organizations to offer online or electronic commerce (E-commerce) services; however, it’s highly typical for the customer not to have workers on-site. In this circumstance, an external importer of record service can act as the IOR service provider.
Lack of knowledge of Trade Compliance
Although the customer may have a local entity and a large staff, this does not necessarily imply that the local personnel is knowledgeable or skilled in trade compliance. Some countries have complicated import procedures, and licenses for importation are hard to obtain. An IOR service covers the lack of knowledge and offers the importer comfort in such countries.
Companies cannot stay current with the shifting requirements of International trade
Despite having the capability to handle trade compliance locally, the customer may still hire an importer of record service to lighten their workload as import procedure can be labor-intense and complicated.
Additionally, it’s critical to stay current with evolving import standards and procedures. It is frequently more effective to use an external importer of record service if local staff members find it challenging to keep current.
Lacking the authorizations required for importing products
Even if they have a registered corporation, some countries require businesses to go through various registrations and certificates to be allowed to serve as importers.
The ideal option is to use the services of a licensed importer of record when it takes too long for personnel to comply. Another reason for using an IOR Service may be too expensive certification cost. Importer solutions provided by the Importer of record service will make the complex procedure of import simple.
Top reasons why an Exporter of Record service is needed
An EOR, i.e., Exporter of Record, is stated as the owner or seller of products being exported globally, just as the Importer of Record is acknowledged as the owner or buyer of imported goods.
They have the responsibility to make sure that all exported commodities abide by the destination country’s national and international exportation laws. The primary motivations to outsource this role by a business are often identical to those previously described.
The exporter is unfamiliar with the exporting procedure
A business might not want to be the EOR if it’s simply unfamiliar with the complex exporting procedure and hasn’t got any time or internal resources to pick it up quickly.
Additionally, if the products are controlled, the export procedure reqires much more than simply giving the things to a courier service along with their contact information.
No in-country presence
Goods may occasionally have been lent for a predetermined time or included in a service contract. The items must be shipped back to the country of origin after that agreement expires.
However, they might not be able to serve as the EOR if they weren’t the original importer and weren’t the owner of the products. Additionally, if the products were stored in a data center, there might not be enough staff or expertise to support export.
When the Exporter of Record is for Reverse Logistics
In an alternative situation, merchandise is returned because it is defective, covered by a Return Material Authorization (RMA), or is past its sell-by date.
In these situations, it frequently happens that the end-user is not able or reluctant to act as an exporter. It is pretty typical in these situations for the end-user to be unable or unwilling to act as the exporter. This is especially probable if the country where the goods are sent has complicated rules or procedures.
An external EOR is an ideal option due to all these factors.
Importer Solutions identify permissible exemptions that can be applied to allow the import/export of goods for clients who do not have the time, money, or staff to invest in these expensive and time-consuming certificates and licenses. IOR service providers can take advantage of these exemptions in the overall import process. The answer to all the hassles of import is the importer of record service, and the same applies to exports.
For all your inquiries related to IOR/EOR service, you are welcome to email us at timecritical@agolworldwide.com, or call us at our toll-free number 1-877-269-2465.
