Many small businesses take the US-Mexico relationship for granted. Ease of trade doesn’t mean zero restrictions, and companies may be surprised at the requirements necessary for doing business in and with Mexico.
Since NAFTA was implemented in 1994, US-Mexico trade routes have widened exponentially, boosting the economies of both countries. Tariffs were largely slashed, regulations loosened, and businesses large and small on both sides of the border saw previously unavailable trade opportunities realized with their continental neighbors. But, not everything is allowed.
For instance, businesses trading internationally for the first time often encounter unexpected regulations at Mexico’s customs department. Forbidden goods, necessary forms, and something called an “Importer or Exporter of Record” are among the requirements to have when exporting goods to Mexico.
businesses trading internationally for the first time often encounter unexpected regulations at Mexico’s customs department
An importer or exporter of record is a must-have when trading South of the border, and many small businesses don’t even know what it is. Briefly, we wanted to give you the low-down on this requirement to give you a heads-up before beginning business adventures abroad.
Firstly, what is an importer or exporter of record? As per the US government, it is “a person or company responsible for the import [or export] of your products into [or out of] the country.” Basically, someone in Mexico must be registered to receive or send goods. They also have to register into Mexico’s Import or Export Record, also known as “Padron de Importadores/Exportadores,” through a customs broker.
“a person or company responsible for the import (or export) of your products into (or out of) the country.”
Someone in Mexico has to be there to receive or send goods. Makes sense, right? Things can’t be sent to no one. But, it isn’t that simple, as these people or businesses must be registered with the Mexican government to be an official importer or exporter of record. So, other than the obvious, why does the Mexican government require a registered importer or exporter of record? It has to do with regulations and compliance.
Due to the trade leniency introduced by NAFTA, regulations are much more relaxed than they could be, though borders were noticeably tightened after 9/11. To avoid people taking advantage of the trade agreement, the government of Mexico requires persons or businesses to register and therefore be made liable for failing to meet customs compliance standards. These standards range from proper labelling, to taking responsibility for hazardous or forbidden goods. This generally ensures businesses abide by customs regulations, and, if they don’t, provides Mexican authorities with a way to crack down on abuses of the system.
Having established the necessity of an importer or exporter of record, how do you get one? Well, US businesses have a few options.
To start, ideally, the person or company you are doing business with is already registered as an importer or exporter of record in Mexico. As we’ve said, the business or person must also be registered into the “Padron de Importadores/Exportadores,” but if they’ve already gone through this process, it should be a breeze for you to send or receive goods from Mexico.
the business or person must also be registered into the “Padron de Importadores/Exportadores,” but if they’ve already gone through this process, it should be a breeze for you to send or receive goods from Mexico.
However, if the intended receiver is not yet registered, the second option is that they go through the registration process to ensure clarity of communication with the Mexican government, so there are no hold-ups when processing goods through customs.
Another option, and one that is becoming increasingly more common, is that a company acts as an importer or exporter of record. Some Mexico-based companies provide this as a service, taking care of all requirements, legal issues, and work with customs brokers in Mexico so you don’t have to. Their hope is to create a seamless border-experience for businesses trading internationally. It does cost, however, and these companies charge a fee depending on the amount and type of good being sent.
Some Mexico-based companies provide this as a service, taking care of all requirements, legal issues, and work with customs brokers in Mexico so you don’t have to.
Generally, the cost of this service averages out to 5% of the value of the shipment.
Once you’ve found the right company for you, how will you make the payment? With Veem, you can transfer payments internationally between businesses easily, securely, and cost-effectively. No wire transfer fees, a favourable rate of exchange, and the ability to track your payment makes Veem the best option for when need to send money to Mexico.
That being said, this is a general overview of importers and exporters of record in Mexico. NAFTA doesn’t cover every requirement or regulation in international importing and exporting. Being aware of the process is half the battle, and can make the difference between a lucrative businesses deal and a flop.