How Do You Start and Operate a Profitable Import Export Business?
Running an import/export business means being aware of the various laws and regulations in your local area that may impact your current business operations. How do you start and operate a profitable import export business at home?
In 2020, the total US trade with foreign countries totalled around $2.3 trillion. Whether it’s food and beverages, cars, or industrial supplies, importing and exporting is big business. By being careful to follow all laws and regulations, you can ensure your import/export business avoids problems and experiences success.
Do I Need an Import License or Permit?
Most sellers don’t need a license to extend their supply chain and import products into the United States. However, various agencies may want you to have a permit, license, or certification for specific items.
For example, alcohol and tobacco products imported into the United States will require a free Alcohol and Tobacco Trade and Tax Bureau permit, which can take many months to obtain.
Read the guidelines issued by the US Customs and Border Protection (CBP) to check what applies to you. Additionally, get in touch with the local port of entry you’ll be using to import your products, and ask about their import requirements along with any other details concerning the process.
Regardless of whether you do or don’t need an import license, you’ll always need to complete CBP entry forms within 15 calendar days of your goods arriving at your port of entry. You’ll need to include your importer number on these forms, which is the same as your IRS business registration number (or your Social Security number if you don’t have a registered business).
Invest in Customs Bonds
Customs bonds basically work as an insurance policy. If your business is no longer able to pay duties or taxes on imported goods for some unexpected reason, a customs bond ensures the US government still gets paid regardless. A continuous bond is the most common type of customs bonding used for day-to-day operations. It protects all goods imported into the country for a set time period — usually 12 months — before it’s renewed.
Using Warehouse Bonds
Warehouse bonds are a subset of continuous bonds, which allow imported goods to be stored in a bonded warehouse without sustaining extra duties or taxes. If your business deals in a global market with complex supply chains, a warehouse bond may be your best bet. Otherwise, you may be better suited to foreign trade zone (FTZ) bonds, which cover shipments at U.S.-administered overseas ports used for international trade
Fortunately, most goods sold to overseas buyers don’t need an export license, but you still have to abide by export control laws and regulations. It’s important to find out the specific agency that regulates the goods you’re attempting to export.
To help you do this, the International Trade Administration lists various federal departments and agencies that will tell you if an export license is required for your product. Be sure to stick to the CBP’s exporting requirements or contact your local port of entry to ensure you don’t run into any problems. The U.S. Department of Commerce also runs a website — Export.gov — that will explain how to plan international selling.
What You Need To Know in Running An Import/Export Business
Technology can reduce the cost of international expansion, but running a successful import/export business requires staying on top of all relevant laws and regulations that may impact your operations. By getting the right license, permits or certifications required for your goods, along with investing in customs bonds, you can better ensure business success.