Import Export Business License: Everything You Need to Know
You may need an import export business license for international trade as it identifies the products that can be shipped between different countries.4 min read
Updated November 23, 2020:
You may need an import-export business license for international trade. The license is issued by a federal agency, and it identifies the products that can be shipped between different countries. Depending upon the product being imported or exported, you may or may not require a license. You can also apply for a temporary license or ATA Carnet document for the purpose of transportation.
Understanding Your Licensing Needs
Before you set up an import-export company, it's important to know the federal and state regulations about the product you will be dealing in. Find out the different licenses and permits you would need at federal and state levels. Also, don't forget to obtain product liability insurance. If your company hires workers, you may want to buy workers' compensation insurance, disability insurance, and health insurance policies.
Expanding Your Import-Export Company
You need not change your business structure or type of company with the growth of your business. An LLC can be large enough to take care of your business. Similarly, various types of corporations can be small enough to fit your requirements. However, if you've been conducting business outside the United States and want to set up one inside the country, you will have to file tax returns as a non-resident entity until you become a resident.
Can You Have Two Businesses Under One Corporation?
If you'd like to conduct two different businesses under a single corporation — say, for instance, import-export and consulting — there is nothing that can stop you from doing it legally. However, most experienced American businessmen prefer to set up separate companies for different types of businesses with a different set of customers and risk levels. Splitting a company based on the nature of the business makes it easier to see which operations are making you more money.
If you want to do different businesses sequentially, you can do that under the same company. For instance, if you've been doing import-export but later on decide to stop that and start doing consulting business instead, you need not form a different company for that; you can do it under the same company.
Unlike in some countries, you don't have to set out the specific scope of your business activities while forming a company in the United States. All you need to do is obtain the necessary licenses required for your new business.
Getting an International Import or Export License
In the United States, you don't need a license to import goods. You can freely import any product unless it falls under a restricted category of items, such as firearms, human organs, etc. You can get started in any of the following three ways:
- Ask your supplier.
- Contact your transportation company.
- Check with the International Trade Administration Office.
Asking Your Supplier
Often, your supplier can help you with information on whether you need a license to export the intended products and the amount of cost involved. UPS places responsibility on the shipper to comply with the regulations of the importing country. If you try to import without a necessary permit and fail to bring the product into your country, the supplier will not be paid. Thus, both parties suffer the consequences.
To be on the safer side, ask your supplier for an undertaking in which he would be solely responsible for complying with the laws of the importing country, including agriculture, food, and drug-related rules. Know the validity period of your import permit and understand its conditions. If any imported product violates your country's laws, your supplier should indemnify the legal expenses of your defense. It's advisable to consult an international lawyer to negotiate a supplier contract.
Contacting Your Transportation Company
Global transportation companies like UPS and FedEx regularly ship products to different countries. They can help you with the clearance documents required and other delivery-related formalities for your product. Additionally, they also serve as customs brokers and help you understand relevant regulations, including licenses, permits, and taxes.
For example, you can open a free account with FedEx and choose your country. You can then ask questions, search for shipping documents, and get tax estimations, all from your dashboard. UPS offers a similar service under the trade name UPS Global Trade.
Checking With the International Trade Administration Office
Finally, you can perform an online search using the phrase “import permit” combined with the name of the importing country. You can easily find relevant information this way. For example, if you are looking to import in the U.S., you can search for something like “import permit, U.S.” or “United States import permit.”
If you need help with an import-export business license, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.