It might sound daunting but for British businesses planning to export to the US, it’s worth considering taking on the responsibility of ensuring all exported products are legal and properly documented by registering your company as an ‘importer of record’.
Becoming your own ‘importer of record’ or ‘IOR’ boosts your long-term chances of success in selling your products in the States. Not only are your products much closer to your customers but all international obstacles are removed.
As your own IOR you can also use your UK address for the registration – if you separately incorporate your IOR entity in the US – greatly increasing your marketing potential, as well as your ability to conduct American banking transactions.
Under US customs law, all imports must have an importer of record. The IOR is responsible for filing all the legally-required documents, paying import duties, and complying with the local laws and regulations.
Under a special arrangement with US customs, parcel operators such as DHL, FedEx, and UPS can “batch-clear” small shipments valued at $2,500 or less under their own name, as the IOR. They then deliver the shipments door-to-door, to the ‘ultimate consignees’. Once you export shipments valued at over $2,500 to the USA, though, your merchandise will need an IOR separate from your freight service.
Meanwhile, your freight forwarder, with your power of attorney, files the necessary paperwork, addresses compliance issues, and payment duties and taxes on your behalf as your designated resident agent.
Once your company is registered in the USA with a US address, your American buyers will know the following:
- 1) Your products have complied with all import laws.
- 2) All import duties and taxes have been paid.
- 3) Your product is ready to ship, as will future shipments, from a US location (assuming that you have a 3PL distribution depot set up in the States).
- 4) They do not have to release their taxpayer or employer identification number (TIN, EIN) as the consignee.
Beyond the immediate advantages of being the IOR for your own products in the US, there are a host of other benefits. You also increase the potential size of you market, your ability to make transactions and get paid, and your ease of making regular international shipments, in these ways:
- 1) You can establish a US dollar checking account in the US once you have a US address (Contact us for details).
- 2) Under the USA Patriot Act guidelines, some large wholesale buyers will not send payments outside of the US. With a US checking account, payments from your customers can be made to your US checking account.
- 3) Under the UK/USA Tax Treaties, UK individuals and businesses are exempt from US income tax.
- 4) Many US credit card issuers will not authorise payments to foreign entities. So, especially for e-commerce sales, setting up merchant accounts in the USA with your US bank will increase your overall B2C sale, and some B2C sales.
- 5) More US consumers will order your merchandise if their comfort factor is raised by the knowledge that there is a US base for your company.
Consult your solicitor about how to register your company as an importer of record in the USA, or contact us for more information. Though a special arrangement with US-based attorneys, we can set up a UK-based company in the USA as the IOR for its own products, quickly and for a low fixed fee. We can also incorporate US divisions of UK companies and give them a US street address. This is also for a low fixed fee.