Project Description

How to Become a Non-Resident Importer

Everything you need to know about Canada’s Non-Resident Importer (NRI) program and how it can help foreign companies looking to expand their business in the Canadian market.

Become a NRI Today and Get Your Products into the Market – Chat with a GHY Trade Specialist Today!

    What is a Non-Resident Importer?

    A Non-Resident Importer, or NRI for short, usually refers to a company based outside of Canada that, for business reasons, acts as the Importer of Record* for products shipped into Canada to be sold to Canadian customers.

    Being an NRI involves an all-inclusive “landed cost” approach that allows foreign companies to better compete with domestic suppliers without having to establish a physical presence in Canada, while also making it significantly more convenient for Canadian customers to buy their products.

    Already an NRI? Let’s make sure you aren’t missing anything:

    *Importer of Record

    An importer of record is a person or company that is responsible for customs clearance on imports, as well as other border-related matters for the imports. This includes ensuring all relevant import documentation is in order (such as import permits and certifications), paying all required duties and taxes, and taking care of any handling fees, inspection and storage fees, etc.

    Why Do Companies Become NRIs?

    Companies in the United States, Europe and elsewhere choose to become non-resident importers because it provides them with similar benefits to locating in Canada, without many of the expensive outlays and downside risks that would otherwise be involved.

    This is because despite being a potentially lucrative market of 37 million people – roughly the same as that of California – the unique logistical challenges posed by Canada’s enormous geography and widely dispersed population have often proved discouraging, even sometimes insurmountable, to foreign companies looking to establish a physical presence in the country.

    What are the Benefits Becoming an NRI?

    The main benefit of being a non-resident importer is that it enables your business to access the Canadian market while avoiding the capital investment, ongoing operating/overhead expenses, and tax implications associated with establishing a location in Canada. Becoming an NRI offers many other benefits and competitive advantages that are also worth considering.

    By taking on the responsibility to deliver your product “all in” to the buyer’s door, operating as an NRI provides your customers in Canada with a seamless, “hassle-free” purchasing experience comparable to that of dealing with a domestic vendor. Being able to compete this way on a level playing field in terms of convenience effectively removes one of the key obstacles to growing your sales in the Canadian market.

    Being an NRI enables companies to exercise more control over their supply chain by limiting the number of service providers (carriers, brokers, etc.) involved. This allows you to establish better reliability and consistency in the shipping/clearance process, which can help improve compliance, reduce potential delays at the border, facilitate end-to-end shipment tracking, and improve delivery times to your customers.

    By acting as both the exporter and importer, you can also more effectively predict landed costs, rapidly adjust any price points as needed and make customers’ buying decisions a whole lot easier by quoting your full price in Canadian dollars.

    Your import costs can be appreciably reduced by consolidating shipments, as goods designed for multiple customers across the country can all be cleared on a single customs entry.

    How Does a Company Get Started as an NRI?

    To get started as a non-resident importer, a company must consider the following:

    To become an NRI, your company must first obtain a Business Number (BN) from the Canada Revenue Agency (CRA), which is a 9-digit number that identifies a company for various revenue-related matters in Canada, including commercial cargo imports. Obtaining a BN and registering for an import/export account with CRA is a free, simple, and generally quick process.

    Like the vast majority of countries around the world (the United States being a notable exception), Canada employs a system of taxation that is assessed and collected on the “value added” at each stage of the supply chain for most goods and services.

    With respect to imports, Canada’s federally imposed Goods and Services Tax (GST) is payable on all goods that are not specifically tax exempt, such as prescription drugs, medical devices, basic groceries, etc., to the Canada Border Services Agency (CBSA) prior to customs clearance. These payments, however, can be entirely reclaimed by companies that have registered with the CRA.

    As a general rule, NRIs that have worldwide revenues of more than CAD$30,000 and are “conducting business in Canada” must register with the CRA for purposes of collecting and remitting taxes. Registered companies are expected to collect the appropriate amount of GST payable from customers on their sales and then remit this amount to the government, but as noted above, they are also able to fully recover any GST paid at the border on their import transactions.

    Depending on the size of your company and the amount of your estimated sales in Canada, as an NRI registering with the CRA for tax purposes, you may be required to post a security deposit with the government, or this requirement could be waived altogether. GHY’s Trade Experts can help you to determine which situation applies to your particular business, in addition to helping guide you through the entire reporting process to ensure that your commercial activities are fully in compliance with all of the applicable tax regulations.

    NRIs are subject to all Canadian customs legislation, such as the Customs Act and Customs Tariff Act and their related regulations, which are administered by the CBSA. Additionally, depending on the type of products involved, NRIs may also be subject to the border requirements of various other government departments (referred to as “Participating Government Agencies” or PGAs). Goods subject to PGA regulations include the following:

    • Food and food-related products
    • Apparel goods, textile articles and steel products
    • Animals, plants and certain wood products
    • Energy consuming products
    • Pre-packaged consumer products
    • Motor vehicles and tires
    • Drugs, medical devices and hazardous products

    Depending on the commodity, imports of these goods may require special permits, certificates, licenses, special labelling, or a specific type of consumer packaging.

    GHY’s Trade Experts can help determine whether any of these specific regulatory requirements apply to your shipments and ensure that you are well prepared in advance to deal with them in order to avoid any surprises or delays at the border.

      Under Canadian customs laws, the importer of record (NRI, in this case) is responsible to the CBSA for payment of any applicable duties at the border. The rate of duty varies depending on the type of goods you are importing and the country where they were grown or manufactured, with rates ranging from zero to a high of 35% for some products, although the overall average is one of the lowest in the world at just 1.52%.

      Additionally, goods imported from countries that Canada has a free trade agreement (FTA) with may also qualify for reduced or duty-free treatment if they meet the origin requirements of the trade deal and are accompanied by proper certification to that effect. Canada currently has more than 10 FTAs in place with various countries around the world, including NAFTA (USMCA) with the U.S. and Mexico, and comprehensive trade deals with the European Union and almost a dozen Pacific Rim nations.

      • U.S. producers will have duty-free access to an additional 3.6% of Canada’s annual dairy market
      • Restrictions on the import of U.S. ultra-filtered milk into Canada have been removed
      • Canada will eliminate Classes 6 and 7 protein substances from the milk pricing structure under Canada’s dairy supply management system, and limit exports of Canadian milk protein concentrates, skim milk powder and infant formula
      • Canada’s price for skim milk solids used to produce non-fat dry milk, milk protein concentrates, and infant formula will be set no lower than a level based on the U.S. price for non-fat dry milk
      • Canada’s dairy supply management system, which places limits on foreign imports is maintained
      • Canada has agreed to treat wheat imports the same as domestic wheat for grading and pricing
      • Mexico and the U.S. agreed that all grading standards for agricultural products will be non-discriminatory

      USMCA is the first free trade agreement for the United States that addresses cooperation, information sharing and other trade rules related to biotechnology and gene editing.

      The agreement also includes provisions that aim to enhance science-based trading standards among the three countries as the basis for sanitary and phytosanitary measures for farm products.

      The value of your goods for duty and tax assessment purposes is generally made on the “price paid or payable,” otherwise called the “transaction value,” which is usually the selling price to your Canadian customer, with certain adjustments. Normally, the transaction value in the case of NRIs will be comprised of the selling price in your home market (domestic costs plus profit) in addition to other expenses involved in getting goods delivered to your customer’s door, such as transportation and all costs related to customs clearance.

      Because NRIs act as both the exporter and importer of record, determining the proper valuation of your goods for customs/tax purposes is not without a certain degree of complexity, but GHY can help guide you through every step of the process to arrive at invoice pricing that is fully in compliance with the CBSA’s expectations in this regard.

      Every product imported into Canada must be assigned a 10-digit code in accordance with the globally used Harmonized System (HS) of classification. This HS tariff classification number determines which rate of duty applies to the merchandise and identifies whether any PGA requirements are applicable.

      The classification of goods is generally a straightforward matter, but in the event that uncertainty exists (e.g., should the product not be specifically covered by an HS code or if it could arguably be covered by differing classification numbers), our Trade Experts can eliminate the guesswork and help minimize your risk by obtaining a definitive ruling from CBSA prior to importation.

      Rather than a standard commercial invoice, owing to certain valuation issues and NRIs being both vendor/exporter and importer of record, a specialized Canada Customs Invoice will generally be the primary document used to provide various data about your shipments needed for customs clearance purposes. Additional documentation such as permits, certificates, licenses, bills of lading, etc., may also be required depending on the type of goods and any relevant import requirements.

      All NRIs are required to maintain books and records relating to all of their Canadian sales activities for a period of six years from the original date of the import. These records can be kept outside of Canada by signing a letter of undertaking with the Canadian government promising to pay for travel and accommodation expenses incurred by a CRA officer in the event of an onsite audit.

      Your Import Responsibilities as an NRI.

      NRIs are subject to all Canadian customs legislation, such as the Customs Act and Customs Tariff Act and their related regulations, which are administered by the CBSA. Additionally, depending on the type of products involved, NRIs may also be subject to the border requirements of various other government departments (referred to as “Participating Government Agencies” or PGAs). Goods subject to PGA regulations include the following:

      • Food and food-related products
      • Apparel goods, textile articles and steel products
      • Animals, plants and certain wood products
      • Energy consuming products
      • Pre-packaged consumer products
      • Motor vehicles and tires
      • Drugs, medical devices and hazardous products

      What are the Benefits of being a NRI with GHY?

      1.

      We ensure your business is registered properly in Canada, and help you understand the information needed for duty processing and Canadian tax filing.

      2.

      They can review your product database to help assign the correct Canadian harmonized codes for each item.

      3.

      We also review where you are sourcing your raw materials from to determine if a preferential tariff treatment could be used to reduce your importing costs associated with duties and tariffs.

      4.

      To ensure visibility on your shipments, we can customize your client profile to automatically notify you the moment each order clears the border.

      5.

      We also have a customized online web portal, allowing you to monitor the status of shipments throughout the customs clearance process.

      6.

      We help increase sales into Canada by removing border clearance challenges.

      7.

      We guarantee consistent clearance processing methods that help reduce customs delays — creating potentially faster delivery times.

      Get Your Products into the Market

      We can help you become a non-resident importer!

      Chat with a GHY Trade Specialist Today!

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