It is easy to assume that you cannot do business in Canada if your company does not have a physical location there. It turns out that this is by no means the case.
Companies located outside of Canada, either in the United States or elsewhere throughout the world can sell to their Canadian clients and act as the Importer of Record for their shipments without any brick and mortar in Canada. This is made possible through the Non-Resident Importer (NRI) Program.
What are the benefits of the NRI program?
There are quite a few benefits and advantages for your business to act as an NRI. The program will allow you to:
- Manage your landed cost
- Sell your products based on delivered price
- Fully control the customs clearance process so that you can ensure there are no delays at the border
- Increase your business’ market share within Canada
- Increase sales to Canadian customers
What do I need to get started as a NRI?
The NRI program enables non-resident businesses to import commercially into Canada and control the clearance process. For your company to act as the Importer Of Record (IOR), you will need to acquire a Business Number (BN) for your business.
A Business Number is a unique number assigned to the non-resident importer by the Canada Revenue Agency (CRA) and allows the CRA to identify a business for tax matters relating to business in Canada. At the same time it creates an import program account number that is used for processing customs documents. The program account number consists of three parts – the Business Number (BN), the two letter program identifier and the four digit reference number. The entire program account number is made up of 15 characters: i.e.123456789 RM 0001 – A nine digit business number to identify the business and two letters and four digits to identify each account a business may have.
It is important to point out that it is the responsibility of the non-resident importer to ensure all transactions are in compliance with Canadian customs regulations relating to valuation, tariff classification, origin, documentation and that payment is made for any duty and / or taxes owing. Not being compliant can mean reassessment and the possibility of monetary penalties from customs. Also to note is the fact that an integral element of the program is ensuring the maintenance of commercial records and documentation for up to six years.
With your business number in place, you should next determine whether your company should become a registered participant in the Goods and Services Tax (GST) Program.
You must register for the GST / HST if your total revenues from taxable supplies are over $30,000 in a single calendar quarter or over four consecutive calendar quarters. Even if you do not have to register for the GST / HST because you are a small supplier you can choose to register voluntarily. (See the excerpt from CRA “Doing Business in Canada – GST / HST Information for non-residents”)
If your company wants to increase its sales and market share to Canada without a physical presence there, or is already currently selling to Canada and interested in registering as a Non Resident Importer, please contact Mantoria Inc. for guidance through the process. Mantoria is a fully licensed customs broker with multiple offices throughout Canada, and has helped many clients benefit from the NRI program.
