Every business owner, manufacturer, or trader would love to expand their market scope. With over 330 million potential customers, the USA is arguably one of the best markets you may want to venture into. But how can a non-America importer get their products to customers in the country? For starters, the MyUSAddress website is an invaluable resource you can use. Check it out to learn more.
Meanwhile, what are the basics of selling your products in the country? The good news is you don’t need to create a fancy corporation or work around the country’s legal framework. Here’s a tried-and-true approach to doing it, including some fast facts:
Establish The Facts
Many misconceptions surround the sale of private label or imported products in the US. For instance, some people believe that you must establish a US firm to ship or sell products in the US. This could not be further from the truth. You may only need to establish a US corporation when you employ people in the country or set up a business there.
Do you need an EIN? Well, it depends. A formal entry isn’t required if you’re planning to ship goods valued below $2,500. In that case, you only need a customs broker (an authorized agent) whose role is to help you navigate the country’s laws, including the paperwork. Such brokers eliminate the complexity or hassle of shipping products.
A Social Insurance Number, EIN, or customs Assigned Number comes into play if the value of your shipment exceeds $2500. Besides, you only need either of the three – if you opt to work with a broker, they can get either the EIN or assigned number on your behalf.
Also, shipping products to the US doesn’t imply you have to start paying income taxes. Provided you’ve not employed anyone in the US to run your operations, then an income tax requirement doesn’t apply to you. But, you may be considered ETBUS (Engaged in Foreign Trade or Business in the US) if you have dependent agents who serve your interests and help further your business in the country. In that case, you’ll need to pay income tax.
Sales Taxes Are Applicable
Now that we’ve tackled the basics let’s dig deeper to help you understand some aspects of selling products in the US. Sales taxes are a requirement in most states, whether you have a physical presence or not.
You need to know how much sales tax to charge your customers and how to remit them. It’s easy to automate sales tax calculations, filings, and even payments using apps like TaxJar. Such software makes it easy for e-commerce businesses to navigate collecting and remitting sales taxes in different states.
Work with a Fulfillment Center
As a foreign national or company, you’re not allowed to ship products directly to your customers in the US. Instead, you must use the services of a fulfillment center. Such firms are based in countries with a physical presence and can help you with all the paperwork and other legalities related to shipping goods into the country.
The fulfillment center also helps you store your products. They may even pack and ship them to your customers whenever they place an order. This service comes in handy, especially if you can’t set up a warehouse in the US.
Ensure to pay all the relevant duties before shipping your goods. That way, you won’t have to pay any penalties when the goods arrive in the US. Plus, you won’t risk getting your goods rejected.
If your shipment arrives by sea, you’ll need the services of a customs broker. Such an agent ensures all the payable taxes and duties are settled. Alternatively, liaise with a carrier who can arrange to have your goods shipped to a US address (fulfillment center) and from there to your customers.
Declared Value of Your Goods Matters
Shipments valued under $800 don’t attract charges. So, what’s the catch? None. But, Delivery Duty Paid (DDP) applies. As the initials suggest, DDP means the importer(you) is responsible for all the taxes and duties payable on the goods. The charges are based on the declared value of your goods. Generally, DDP shipments don’t attract additional customs duties.
If the value of your shipment exceeds $800 but falls below $2500, remember to pay the relevant duties. Thankfully, a formal entry isn’t needed in this case. But, you’ll need some paperwork (a formal entry) for goods exceeding the $2500 threshold. Your customs broker can handle this for a small fee, typically around $200.
Is A US Bank Account Necessary?
The short answer is no. That said, a US bank account can help streamline transactions by allowing customers to pay directly for your products. Canadians, for instance, can easily open US bank accounts with US-based subsidiaries of their local banks. However, some banks require your physical presence if you plan to open an American account. Since this isn’t feasible for everyone, you can use other payment gateways such as PayPal or Payoneer.
We hope you now know what you need to sell your products in the US as a foreigner. Meanwhile, you can consult a tax expert for more insights on taxes and duties, as they’re often subject to change. Lastly, remember to comply with all the requirements, and you should be good to go.