The import and export business is still the most lucrative industry anyone could venture into. Aside from the wide range of goods to choose from, playing a critical role as an importer/exporter can help you generate anywhere from a few thousand to millions of dollars monthly in revenue.
While the import/export business may be highly attractive to those who want to start a business with great potentials to generate large revenues, not playing your cards right or making petty mistakes can cause you to lose a great portion of you import/export business, here are six common import/export mistakes to avoid at all costs:
In this post, we will walk you through the steps by step guide on how to release your imported shipments from the Philippine Bureau of Customs (BoC)
Step 1: For new company or individual who wants to import any commodities with commercial value and or in commercial quantity, you first need an Import Clearance Certificate from the Bureau of Internal Revenue. Then you need to apply for Importer’s Accreditation to the Bureau of Customs. Only accredited importers have the privileges to imports any commodities whether regulated imported commodities or freely imported commodities.
Step 2: Import documents required for shipments to the Philippines include:
1. Commercial invoice/Pro-Forma invoice
Should include a detailed description of the goods i.e. what is it made of, what is it part of, what is it used for.
The value indicated must be correct. If the shipment consists of more than one item, the importer must provide a value breakdown and ensure that the total amount tally to the total value of the shipment.
The value must be transaction value – the price paid or payable – for the item/s in case the item has been provided free of charge or as a gift.
Putting “No Commercial Value” will lead to Customs asking the consignee to provide value evidence such as proof of payment, purchase order, or telegraphic transfer.
The invoice should also include the quantity, weight, unit price, currency and country of origin (COO).
2. Bill of lading (for sea freight) or air waybill (for air freight)
Should be filled out completely and accurately.
Make sure all the information is consistent with the commercial invoice.
A revision in the declared value once a shipment reaches the destination port is subject to Customs approval.
Make sure to include a reachable consignee contact so the destination port can easily inform them about the shipment’s arrival and advise of any necessary clearance paperwork.
3. Packing list – A document that details the merchandise in the shipment, along with information on how it was packed, how the items are numbered, the serial numbers, and the weight and dimensions of each item.
4. Applicable special certificates/import clearance/permit depending on the nature of goods being shipped and/or requested by the importer/bank/letter of credit clause, e.g., Food and Drug Administration (FDA) license; and
5. Commercial Invoice of Returned Philippine Goods and/or Supplemental Declaration on Valuation.
6. For a Letter of Credit (L/C) transaction, a duly accomplished L/C, including a Pro-Forma Invoice and Import Entry Declaration for Advance Customs Import Duty (ACID) is required. A Pro-Forma Invoice is required for non-L/C transactions (e.g., Draft Documents against Acceptance (D/A), Documents against Payment (D/P), Open Account (OA) or self-funded documentation).
7. Additional documents for certain imports – Importers bringing in animals, plants, foodstuff, medicine or chemicals must additionally obtain a Certificate of Product Registration from the Philippines’ Food and Drug Administration.
Step 3: File an Entry Entry must be filed in the Customhouse within 30 days from the date of discharge of the last package from the vessel, which shall not be extendible. Failure to file the entry constitutes implied abandonment and will result in the ‘ipso facto’ forfeiture of the goods/shipment. You or your customs broker may have the software to file Bill of Entry at office or home. If you do not have such facility, you can approach private EDI (Electronic Data Information) service providers who can arrange to submit the data on behalf of you.
Step 4: Payment of Duties and Taxes for ATRIG
An ATRIG is an authority issued by the BIR, addressed to the Commissioner of Customs, allowing the release of imported goods from customs custody upon payment of applicable taxes, or proof of exemption from payment thereof, whichever is applicable.
The BIR Revenue Memorandum Order (RMO) No. 1-2016 directs all applications for ATRIGs for excisable products be processed and issued centrally at the BIR National Office in Quezon City.
Only applications of importer-applicant and broker-representative who are duly registered BIR taxpayers will be processed.
An individual importer-applicant must present a photocopy of his/her latest annual income tax return together with the audited financial statements duly stamped received by the BIR. These will be used in the valuation of the individual importer-applicant’s financial capacity to import.
Prior ocular inspection of the imported goods would be conducted if necessary.
Step 5: Release of Cargo Upon satisfying all these requirements of, you can now retrieve your import goods from the Customs.
The import customs clearance procedure in the Philippines can be very lengthy and tedious, especially for those small and medium businesses. If you need a professional help to ensure a fast and hassle-free release of your import goods, contact Excelsior Worldwide Logistics Corp. today at (063) 525-9775 or send an email to wecare@excelsior.ph
Responding to the economy’s endeavor of progress, a factor of its primary resource needs to comply and go with the flow of its demand. Through importation, Philippine economy continuously grows and expand. However, the government which is responsible for regulating and facilitating trade, implement strict policies on the importation process in order to prevent smuggling and to combat tax fraud and evasion.
Accreditation of importer is a necessity when facilitating a transaction with the Bureau of Customs (BOC) wherein ease of processing of documents and release of goods are involved. Importers need to be accredited with the BOC which is indispensable because once you are not, the agency will not recognize your papers. Otherwise, gaining accreditation from the Bureau equals to certainty that your shipment will be entered in any customs office at ease.
Importation is a Privilege given by the government. It is not a right.
In this post, we will give you some proven tips and tricks that will surely help you run a successful importation business today.
Create Your Website and Start Blogging
One of the most effective ways to find networks, potential investors, and customers is through a website. According to statistics, over 6 billion searches are being made each day, making it the most cost-effective platform you can use to market your business today.
Get a domain name. While it is very common for businesses to have domain names that are the same as their business names (such as walmart.com), you can pick a domain name to include any text phrase you want as long as it is not already taken.
Choose a website builder. Website builders are tools that typically allow the construction of websites without manual code editing. To know more about this, check this guide to choosing the right website builder.
After you build your business website, it’s time to fill your website with content and information relevant to your products and services. Check out this post to learn more about successful business blogging.
Select a Product to Import
There are a lot of ways to select the product you want to import and sell in your locality. For example, you can import the products which are currently trending in your area but is not fully satisfied yet by the local providers.
You can also create your own product, such as handmade crafts, then source the raw materials from other countries. Whatever it is you want to sell, make sure that there is a viable market for it, and you know exactly the selling points of that product in the market.
Find the Right Market
After you identified the product you want to sell, you need to pick someplace to sell it. Here are some tips to help you pick the right market for your product:
Know what you are offering and you will be able to determine who will be buying it.
Do the right amount of research. By collecting some useful data on the market situations, needs and customer’s profitability you can design marketing strategy which will work in the targeted niche.
Your business model matters. Running a B2B or B2C business determines the niche strategy you should develop for your import business.
Find a Reputable Supplier
The easiest way to find a supplier for the product you want to import is to consult some specialized online resources: Alibaba, Global Sources, ThomasNet, Makers Row, and MFG. You can also try searching the internet for specific keywords, for example, “Taiwan, bicycle parts manufacturers” to see what is currently available online. Either way, ensure the following when choosing an overseas supplier:
Make sure they are a good fit for your company: provides impressive product information, packaging, process, and has a world-class reputation in the industry.
Make sure they have the capacity to keep up with the demand.
Make sure you have what it takes to out the import partnership you’re about to make.
Set the Price of Your Product
Typically, importers use the cost-plus pricing method to price their import goods. In this method, the importer takes a markup percentage over cost – which is the price charged by the overseas supplier to you when you buy from them. That markup becomes your profit or commission.
The goal is to price your product with markup that will not exceed what your target market is willing to spend. The more goods you sell, the more profits you’ll generate.
Find Customers
As long as your website ranks well in search engines, customers will be able to find you in the online space. However, you should also use other ways to find customers. Check with local contacts, such as trade organizations, Philippine Chamber of Commerce & Industry, embassies and trade consulates.
These organizations can provide you with contact lists specific to your industry and also suggest trade shows that are taking place locally and internationally that might help you connect with potential customers.
You can also use other digital platforms such as social media to connect with your customers in a faster and efficient manner. Facebook, LinkedIn, and Twitter are full of users seeking for products and services, so using these platforms can help you stay relevant and present to potential customers worldwide.
Select a Trustworthy Freight Forwarder
Your chosen freight forwarder can make or break your import business, so choose one wisely. Excelsior Worldwide Freight Logistics Corp. is a global freight forwarder that can help you transport your import goods to where you will be selling it in an efficient and timely manner.
Our trustworthy and reliable international freight forwarding service has been the backbone of many import business in the Philippines for 16 years. Catering to different industries, our logistics service has saved all our clients a lot of time, effort and anxiety. Not only we help our clients with their transport needs, we also help them prepare all the necessary shipping arrangements to ensure a seamless import process. With our expertise in Philippine importation process, you will be able to ensure a more successful importation business than you could have ever imagined!
These are the proven tips that will help you run a successful importation business in the Philippines. If you want to learn more about our freight forwarding services, Contact Excelsior Worldwide Freight Logistics Corp. today at (+632) 525-9775 or email us at wecare@excelsior.ph.
To be successful, one should have a full grasp of the complexities of trading such as the customs rules and regulations that need to be understood and followed throughout the whole importation process.
In every type of business, it’s minimizing risk is equally important as achieving maximum return. If your business imports or exports its products, it means you’re putting an investment at stake every time you ship cargo. This is why it is extremely vital to have your cargo covered with cargo insurance because your business could lose an absolutely insane amount of money in case everything went spiraling down.
In the Philippines, under Sec.99 of Presidential Decree No. 612, also known as Insurance Code of the Philippines, a marine insurance should cover you against damages or loss on:
• Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, securities, chooses in action, evidences of debts, valuable papers, bottomry, and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit or transportation, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting shipment, or during any delays, storage, transhipment, or reshipment incident thereto, including war risks, marine builder’s risks, and all personal property floater risks;
• Person or property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage arising out of or in connection with the construction, repair, operation, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to any person arising out of ownership, maintenance, or use of automobiles);
• Precious stones, jewels, jewelry, precious metals, whether in course of transportation or otherwise.
• Bridges, tunnels and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage); piers, wharves, docks and slips, and other aids to navigation and transportation, including dry docks and marine railways, dams and appurtenant facilities for the control of waterways.
• “Marine protection and indemnity insurance,” meaning insurance against, or against legal liability of the insured for loss, damage, or expense incident to ownership, operation, chartering, maintenance, use, repair, or construction of any vessel, craft or instrumentality in use of ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person.
Whether exporting or importing or using an air freight or ocean freight for your international shipping, marine cargo insurance covers loss and/or damage of cargo while it is in transit between the points or origin and final destination.
Here are five reasons why your import/export business need to protect your freight with cargo insurance.
Whether you’re an exporter who has not been paid for the goods at the time of shipment or an importer who has paid for all of the goods prior to receiving the, having your cargo insured protects you from potential financial loss if the goods are lost or damaged during the transit.
2. General Average – Speed up the Release of Your Cargo
In cargo insurance, general average means general loss. When the general average is declared, both the ocean carrier and the cargo owners are liable for loss or damage to all the cargos aboard in the ship, as well as the ship itself. Under this circumstance, you may be required to post a bond and/or cash deposit in order to obtain the release of your cargo following a general average – even though there was no loss or damage to your goods.
By availing cargo insurance, you take the load off your shoulder as the insurance company assumes the responsibility and expedites the release of your cargo.
If your customers obligate you through a contract to provide ocean cargo insurance, that is because they want to protect their interest and or their bank’s interest as well. This is especially true when selling goods in CIP or CIF (click the link to learn more about Incoterms). Failing to avail cargo insurance cannot only subject you to financial loss if there is loss or damage to the goods, but non-compliance with the terms of your contract with the buyer can also result in loss of sales and legal problems.
By law, carriers are not fully responsible for many common causes of loss in transit e.g. Acts of God, general average, etc. In the event they are liable, their liability is also limited – either by contract stipulated in the bill of lading or by law. To make up for the limited carrier liability, the best thing that you can do is to purchase a cargo insurance.
While counting on your buyer’s or seller’s insurance may be a viable option, having a cargo insurance provides another layer of security and peace of mind. Purchasing a cargo insurance puts you on the higher ground by giving you more control over insuring terms, valuation, and limits provided by each insurer, ensuring that all these are a perfect match to your business’ needs. As an importer, purchasing your own cargo insurance saves you a lot of time and effort from dealing with foreign insurance company provided by the seller, especially from a country with a different language.
These are the top compelling reasons why you should definitely need a cargo insurance for your import/export business. Want to know more? Contact Excelsior Worldwide Freight Logistics Corp. and let us help you in your journey in the import-export industry this 2017 and beyond. Call us at (+632) 525-9775 or email us at wecare@excelsior.ph.
Knowing the products that are in-demand in the market is one thing, knowing how to source them is another. Aside from having a sufficient importing knowledge and partnering with a reliable freight forwarder, much of the success of importing operations depends on how effective you are in sourcing products for your business.
While learning the ins and outs of sourcing can be challenging, there are ways to make it more actionable for you. In this infographic, Excelsior Worldwide Freight Logistics will present to you six importing tips that will help you.
If you’re a business owner looking for ways to minimize importing cost, then you should familiarize yourself with one of the salient features Customs Modernization and Tariff Act (CMTA) which was implemented October last year.
Under Customs Administrative order no. 02-2016, De minimis provision of the CMTA is implemented which states that imported goods in the Philippines with a freight on board (FOB) or free carrier (FCA) value of P10,000 and below are no longer subject to duties and taxes.
This said provision aims and targets to 1) minimize the importation costs and customs administration costs of clearing such importations, without compromising customs border enforcement patrol and; 2) adapt the growing trend toward trade liberalization and facilitation and harmonize the country’s customs laws with different applicable international trade agreements.
Here are some facts one needs to know in order to assess whether your importation might be free of duty and taxes.
a.) Importations brought in by passengers or sent thru balikbayan boxes may be considered as de minimis when they have complied the parameters of Conditionally Free Importations.
c.) Random and non-intrusive examination will be conducted but customs examiners may also physically examine and inspect the goods in order to prevent the entry of contraband goods.
f.) Shipments which are declared as “without commercial value” or “of no commercial value” are excluded from immediate release as de minimis importations.
These are only several and important facts about the de minimis provision. The said provision will also be reviewed every 3 years and amended or revised, if necessary. Your shipment might qualify in this provision. For assistance, feel free to contact Excelsior Customs Brokerage where peace of mind of clients is our service.
Aside from gargantuan cargo ships, another object that most people often associate with international shipping industry is container units. These long, rigid, metal boxes form the most integral part of the entire shipping industry- and are the structures that shippers rely on to store various types of cargos that need to be transported from point A to point B.
Having said that, a variety of container units can be used depending on the type of products to be shipped or the special features. To know which one suits best to the products your business is shipping, check out this infographic.
Importers and exporters are very much familiar with how the final steps of importing in the Philippines should take place: they must for their imported articles to processed by customs, pay the necessary customs duties and fees, and the delivery of the imported goods to its final consignee can finally take place.
However, consignees cannot simply send their delivery trucks and trailers to the premises of Manila South Harbor and Manila International Container Terminal without booking an appointment first. And in order to do that, consignees must use the Terminal Appointment and Booking System or TABS. Went into on October 2015, this system is an electronic platform is implemented in the aforementioned ports in Manila where the majority of the importations are brought in.
According to its proponents, the Asian Terminals Inc., TABS is designed to keep the movement of goods flowing at Manila’s international trade gateways. Specifically, the web-based platform serves as a platform by which brokers, forwarders, importers/exporters, and shipping line representatives to schedule the withdrawal and delivery of containers at Manila Ports based on time zones spread throughout the 24-hour period. It is also intended to be in line with the government’s truck ban, ultimately resulting in lesser road traffic and also to minimize and lessen the port congestion in such ports.
On October 22, 2015, Manila North Harbour Port Inc. CEO Richard Barclay said in a presentation at the Procurement and Supply Institute of Asia (PASIA) that TABS will benefit its stakeholders in terms of more efficient truck trips, leading to reduced cost; prioritization of cargo release and acceptance; and management of volumes, forecasting, and planning.
While many appreciate the objective of TABS to facilitate smooth flow of traffic and goods around the ports, it also received strong opposition from various groups which includes the Chamber of Customs Brokers Inc., Professional Customs Brokers Association of the Philippines, and Aduana Business Club.
According to an interview with these groups, while TABS can significantly improve the importing process, the imposition of high fees to its end users (importers/exporters, forwarders, etc.) is simply wide of the mark because “…the TABS is an inherent part of the port operators’ mandate that is supposed to enhance their service.”
Also, despite the supposed facilitation objectives under TABS, a lot of customs brokers and truckers using the system have complained of 24-hour waiting time for the trucks to enter the ports. The groups explain that “One possible reason for the long queue to the port is the rush to avoid truck ban hours and penalties, such as that there are now overlapping of truck schedules depending on which truck arrives first.”
Moreover, the said booking platform is also inherently flawed which results for customs brokers and companies to rush. According to them, TABS has some slots with booking free and some come with absolutely no charge, which is why many trucks their way to the terminal just to avail a free booking. Outside the pier, traffic still remains rampant and is a major headache not just for commuters but also to transport and delivery providers which cause them to miss their reserved time of booking.
Regardless, this situation gives rise to the problem of delays in getting in the port and being penalized. The penalty for late arrivals (trucks that come two hours after their booked slot) is P1,625. Trucks that are not able to arrive three hours or more after their appointment will be fined for P3,251. These expenses are especially painful for smaller firms and causes a delay in the target delivery of the goods.
Overall, while the intention and aim of TABS are good but is still in need of several improvements to better cater clients and to provide an excellent customer service. There might be flaws in the system but through improvements and adjustments, it could properly and effectively achieve its goals and be able to address the issues which are related to logistics services.
