Let us start with an example to give a clear understanding of the term importer of record and why tech companies around the world need such services. Let’s suppose you are an IT or Telecom hardware manufacturer and your equipment is in high demand around the globe. You sell them to your customers in almost every corner of the world.
Now the selling part is easy and getting that equipment delivered to the doorsteps of your customers is hard. Some customers don’t bother you to get into shipping and all the related matters. While others just want it to be delivered to them on their doorsteps.
Now think about it how you can import that equipment in that particular country where you don’t have any legal footprint. This problem just might have ended your dream of global expansion but thanks to Importer Of Record service providers you can now distribute your technology anywhere in the world.
So, what is an Importer of Record? It is a legal entity that is by law permitted to do imports in a particular country.
They serve as a partner company and help you import your equipment without you being dragged into any import process. IOR companies do this on your behalf and get your goods cleared from customs, pay the duty taxes and arrange for last-mile delivery.
When doing global trade, you need to be aware of all the import processes in all the countries you are doing business. But unfortunately, this is not possible and handling imports in different countries all at the same time is for sure a daunting task. That is why you prefer getting it done by the IOR service provider.
Here are 5 reasons why you should hire an importer of record company instead of handling your imports yourself.
Goods sold on DDP incoterms
DDP means Delivered Duties Paid which is a shipping term. To put it in simple words your customer has want the goods all cleared from customs by you and delivered to his doorstep. That means you have to take care of all the logistics from the country of origin to the destination.
DDP means maximum responsibility is on you to get the goods delivered. You are responsible to pay duty taxes and arrange all the necessary documents to get the goods cleared. This is where you need the service of an Importer Of Record who will represent you in that particular country and do all the import processes as well.
Your customer doesn’t want to get involved in the import process
Buying on DDP terms is not just the only reason your customer doesn’t want to be part of the import process. There could be plenty of reasons why your customer doesn’t want to get listed as an importer. Sometimes the goods are imported for temporary use only and they are sent back to their origin at the end of the project.
Sometimes the end user doesn’t want the goods to be listed on their tax returns or they don’t want to show the goods on their book of accounts. There are several more reasons for it and we will discuss each in our next blog.
The end User is a service provider and has no legal entity in the country
Some big companies offer global services, yet they don’t have a legal entity in every country of the world. For instance, Google and Facebook are being used globally yet they don’t have offices in every country of the world. That is why companies like this use rented space in other countries to keep their service live. In such situations, these companies use IOR service providers to get their equipment distributed globally.
Lack of knowledge of trade compliance
Although your customer might have a legal entity and might have no objection over importing the goods in their name, but still they won’t because they don’t have much knowledge and experience in trade compliance. Some countries have a very complex import compliance process and acquiring import licenses is very difficult. A good IOR service provider fills in the knowledge gap and gets the goods cleared for you.
The constant change in global trade compliance
Global trade compliance is complex, and it is constantly changing with every year passing. Companies doing global trade struggle to keep up with the change. Every year developing countries reform customs regulations as well as compliance requirements on IT and Telecom equipment. IOR service providers are specialized in global trade compliance and they have a dedicated team of professionals who constantly search for new updates regarding trade compliance to give you a seamless and trouble-free service.
Are you looking for an experienced IOR service provider? Contact our IOR logistics professional now.
We at One Union Solutions have access to 170+ countries and we can serve as an importer of record for all your IT and Tech Imports.