6 Steps on How to Become a Non-Resident Importer

 

 

For American companies, becoming a Non-Resident Importer (NRI) into Canada is a relatively simple process that creates the potential to boost sales by at least 10% of their American sales figure.

Below, we outline the 6 steps to take to become an NRI.

Step 1: Register as a Canadian Business

 

To become a NRI you need to register for a Canadian business number, which is similar to your US Federal Tax ID.

Your Canadian business number will allow you to:

  • Register for Canadian taxes (GST)
  • Use as Importer Number and with Canada Border Services Agency

 

Where to register:

Register with Canada Revenue Agency which can be done online, by mail, fax or phone.

  • For information on the requirements of each type of registration, click here.
  • For a fillable online-PDF of the RC1 form (request for a business number), click here.
  • For a printable version of the RC1 form, click here.

 

Step 2: Create Landed Cost Pricing

 

Landed Cost Pricing is a price for customers including Canadian duty, transportation costs and customs fees.

Why Landed Cost Pricing is so beneficial:

  • Makes it easy for your Canadian customer to understand the price of your product
  • Allows for increased understanding of real expenditures per product
  • Create more competitive pricing relative to rival products
  • Costs are accounted for in every purchase

 

Step 3: Remove Third Party Distributors and Resellers

 

Instead of selling your products through a reseller, becoming an NRI allows you to receive orders from your customers directly through the sales channels of your choice and ship your goods in a way that works best for you.

Too often, companies deal with a tarnished reputation in the eyes of their customers due to bad experiences customers have had with third party distributors.

Operating as an NRI eliminates the need for third party distributors altogether. As a business, you can deal directly with clients which will give you control over your company’s interactions with them. Becoming an NRI will drastically improve your service levels and allow you to build stronger relationships with clients.

 

Step 4: Invoice Your Customers in Canadian Funds

 

Convert your landed cost prices into Canadian dollars and handle the exchange into US funds after the sale.

Pricing in Canadian dollars will make it simpler and more attractive to Canadian customers to purchase your products. Offering a simple domestic transaction should translate into increased sales within Canada.

 

Step 5: Offer Domestic Returns to Customers

 

Provide a local “return address” for your Canadian customers. Customers will send returns to this address. Once returns are received, they can be shipped internationally to your company.

Purpose:

  • Creating a simplified return process improves customer service by making it easy for customers to return unsatisfactory goods
  • As an NRI, this return address allows you to simulate a Canadian location without increasing fixed expenses

 

Example:

Many of Frontier’s clients utilize this service. Customers of Frontier clients send their returns to Frontier’s warehouse. From there, Frontier warehouses the returns and ships them back to clients when they are ready to receive them.

 

Step 6: Maintain Compliance

 

To ensure your company is compliant you must:

  • Classify your goods appropriately for customs
  • Report accurate product values
  • Understand related Trade Agreements
  • Comply with specific Point of Origin Rules
  • Maintain proper documentation

 

Overall, your company can benefit from becoming a Non-Resident Importer. Two main reasons why you should become and NRI are:

  1. To reduce the final cost of goods for your Canadian customers
  2. To make it easier for customers to buy from you

 

For more information on becoming a Non-Resident Importer, contact one of our experts today!

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