Import Guide – Thailand
Thailand is a rapidly growing market in Asia, with particular strengths in industries like electronics, machinery, textiles, and rubber. In 2020, Thailand was the United States’ 16th largest supplier of goods, totaling $37.6 billion in imports and accounting for 1.6% of overall US imports.
Small and medium-sized businesses (SMBs) frequently encounter countless challenges when attempting to import goods to the United States and Canada from eastern countries like China and Thailand. These hurdles include pinpointing credible suppliers, understanding regulatory requirements and customs procedures, grappling with language differences, and overseeing the intricacies of logistics and international shipping. Yet, the prospect of accessing Thailand’s rich market and varied product range makes confronting these challenges a rewarding endeavor. A significant portion of these challenges can be substantially diminished by aligning with the right digital freight forwarder.
In this detailed guide, we will dive into the complexities that you, as an SMB, face when importing from Thailand. We aim to equip you with essential insights to navigate this venture successfully. More crucially, we’ll highlight how a skilled freight forwarder can adeptly manage these challenges, paving a smoother route for your international trade operations.
Setting up and Understanding Your Import Strategy is the First Step
As you embark on your importing journey from Thailand, acquainting yourself with the key players is the first step. Their collective efforts ensure the smooth transit of goods, adherence to regulations, and overall streamlined execution of the import process. This introduction serves as your primer, offering a glimpse into the intricate machinery of importing, setting you on the right path toward successful and hassle-free international trade.
- Importer/Buyer: This is you, an SMB that is expanding its product offering by importing goods from Thailand.
- Exporter/Supplier in Thailand: The primary source or company that produces or provides the goods for sale. They play a critical role in ensuring product quality and preparing necessary export documentation.
- Thai Customs: They oversee exports from Thailand, making sure they adhere to all local regulations and laws.
- Customs in the USA or Canada: They ensure that all products entering the country meet local laws, regulations, and standards, and they levy any necessary duties or tariffs.
- Digital Freight Forwarder: This is where Ship4wd comes in. We act as an intermediary between you and the exporter. We will assist in arranging shipping, handling logistics, and navigating customs procedures to ensure a smooth delivery of goods.
Harmonizing your shipping activities becomes smoother when you adeptly manage these essential participants. By enlisting the expertise of a freight forwarder as your reliable collaborator, you can redirect your energy toward your primary operations – seizing opportunities, expanding, and steering your business forward.
Make Sure Your Thai Supplier Complies with Thailand’s Export Regulations and Compliance
When considering imports from Thailand to the United States or Canada, it is generally the responsibility of your Thai supplier to secure export licenses and manage export protocols.
During this stage, as an importer or buyer, the most important thing is to agree on the appropriate incoterm, indicating the exact responsibilities of each involved party.
Below is a concise summary of the compliance and rules that your Thai associates need to observe.
When your Thai associate exports products from Thailand, they must submit a detailed customs declaration. This declaration needs to cover the following points:
- Consignor and Consignee: Details of the exporter (seller) in Thailand and the importer (buyer) in the receiving country.
- Description of Goods: A clear and accurate description of the items being shipped, including the material composition, if applicable.
- Value of Goods: The total cost or value of the goods being exported, typically used to calculate customs duties and taxes.
- Country of Origin: This refers to Thailand, where the goods were manufactured or produced.
- Tariff Classification: Harmonized System (HS) codes that classify the goods for duty purposes.
- Purpose of Shipment: Whether the goods are for sale, as samples, or for personal use, among other reasons.
- Shipping Details: Information regarding the mode of transport, such as the vessel or flight number and the port or airport of entry.
While the exact details required can vary based on the nature of the goods and specific regulations of the importing country, these are general elements commonly found in a customs declaration when importing from Thailand.
Export License (Thai Supplier)
Exporting goods from Thailand involves adhering to specific regulations and obtaining necessary licenses and permits. Here’s a general list of licenses and permits required for exporting goods from Thailand:
In order for your Thai partner to export items from Thailand to you, he or she must comply with specific regulations and obtain the appropriate licenses:
- Business License: Proof of a valid business license is required from your Thai partner to operate legally.
- Export License: A license issued by the Thai government allowing businesses to export certain goods. For some products, this license is required for export, while for others it is not
After obtaining the necessary licenses and permits, a Thai seller must be aware of the tax implications related to exporting. Here’s what they might encounter:
- Value Added Tax (VAT): In Thailand, many exported goods are subject to a 0% VAT rate. However, it’s important to note that this may not apply to all types of goods. This also means that the exporter may be able to claim back any VAT paid on merchandise and services relating to the exported goods.
Negotiating Contracts and Incoterms with the Thai Seller
When importing goods from Thailand, SMBs need to have a good understanding of Incoterms such as ExWorks (EXW), Free On Board (FOB), and Free Carrier (FCA).
Incoterms, standing for International Commercial Terms, serve as a series of standardized guidelines that define the roles and responsibilities of both buyers and sellers in relation to the shipping and delivery of merchandise within sales contracts. These guidelines lay out details concerning your deal, such as who is responsible for transportation costs, the precise moment at which the risk transitions from the seller to the buyer, and even who is responsible for obtaining insurance.
For example, under FOB (Free On Board), the Thai seller retains responsibility for the merchandise until they are placed on the shipping vessel. In the EXW (Ex Works) scenario, the buyer takes responsibility as soon as the items leave the Thai seller’s facility. Conversely, with FCA (Free Carrier), the Thai seller conveys the items to a transportation method determined by the buyer. A comprehensive understanding of these terms is fundamental to ensuring an efficient importation process from Thailand.
Listed below are the 11 Incoterms as defined by the International Chamber of Commerce (ICC):
- EXW (Ex Works)
- FCA (Free Carrier)
- CPT (Carriage Paid To)
- CIP (Carriage and Insurance Paid To)
- DAP (Delivered At Place)
- DPU (Delivered At Place Unloaded)
- DDP (Delivered Duty Paid)
- FAS (Free Alongside Ship)
- FOB (Free On Board)
- CFR (Cost and Freight)
- CIF (Cost, Insurance, and Freight)
Learn more about Incoterms here.
While these Incoterms are globally recognized, specifying a chosen Incoterm clearly in the sales contract when importing goods from Thailand or any other country is crucial. Both parties must fully understand their responsibilities under the selected term to avoid disputes and misunderstandings.
Choosing Your Shipping Options and Handling Logistics
Navigating the complexities of importing goods from Thailand requires close attention to shipping options and skillful handling of logistics for a streamlined experience. The ideal choice hinges on factors like your budget, the volume and weight of your items, and the urgency of the delivery.
Even though air freight can also be used to transport goods from Thailand, ocean freight remains a dominant choice for businesses looking to transport large volumes or those not constrained by tight delivery schedules. Full Container Load (FCL) and Less than Container Load (LCL) are potential shipping options. FCL is optimal for significant shipments, allowing businesses to monopolize a container for their merchandise, while LCL combines your items with other shipments in the same container.
Different delivery methodologies include port-to-door, port-to-port, and door-to-door. By engaging a freight forwarder to oversee this end-to-end process, you can streamline logistics and eliminate the need to juggle multiple service providers.
It’s also imperative to ensure your merchandise is covered by cargo insurance to safeguard against potential transit losses or damages.
How Freight Forwarders Streamline Your Shipping Operations
Leveraging freight forwarders can significantly enhance the efficiency of your shipping operations, especially when navigating the intricacies of international trade.
Researching: Freight forwarders bring to the table a wide range of shipping solutions and supplementary services that include FCL and LCL, customs clearance, financing for SMBs, and secure payment methods. Their longstanding affiliations with carriers and other service vendors position them uniquely, enabling superior negotiation and optimization capabilities compared to SMBs managing on their own.
Execution: Freight forwarders assume control of logistics, overseeing the entire shipping journey to ensure the safe transit of your goods from Thailand.
Insurance & Advanced Tracking: Often, these professionals offer cargo insurance to safeguard your goods during transit. Additionally, they provide sophisticated tracking systems, empowering you to keep an eye on your shipment’s whereabouts and receive instant notifications about unforeseen circumstances.
Import Regulations and Customs Duties When Importing Goods from Thailand to the USA and Canada
Following import regulations and understanding customs duties are paramount when importing products from Thailand. It’s essential for SMBs to comply with these standards to ensure an uninterrupted import process. Key factors to consider when importing from Thailand to the US and Canada include:
Compliance Considerations When Importing to the USA and Canada
For Both Countries:
- Quotas and Restrictions: Some items coming from Thailand may have import restrictions or quotas when entering the US and Canada. To identify which goods are affected, consult the US Customs and Border Protection website for US limitations and the Canada Border Services Agency website for Canadian restrictions.
- Tariff Classification: All products imported into the US and Canada should be correctly classified using the Harmonized System code. This will determine the applicable duty rate and potential import restrictions.
- Calculation and Payment of Duties: Knowing how customs duties are calculated and how to pay them is essential when shipping to the US and Canada.
- Product Standards and Regulations: Ensure that the imported goods adhere to US or Canadian safety, quality, environmental, and labeling standards.
For the United States:
- US Customs Bond: For commercial imports, a customs bond is mandated by the US Customs and Border Protection (CBP). This financial assurance serves to confirm that the party importing goods will adhere to all applicable regulations and laws, as well as secure the payment of import duties and associated taxes.
- Canadian Customs Bond: When bringing goods into Canada, specific importers are obligated to secure a customs bond, often referred to as form D120, by the Canada Border Services Agency (CBSA). This financial assurance confirms that the importing entity will fulfill all applicable duties and comply with relevant regulations, encompassing the settlement of import taxes, duties, and any other liabilities placed on the importer.
- Business Number (BN): To import commercial items into Canada, either as a corporate entity or a private person, a Business Number (BN) for an import/export account is mandatory. This number is issued by the Canada Revenue Agency (CRA).
- Canadian Import Control List (ICL) Compliance: If products are on the ICL, importers may need a permit or license.
Documents and Other Considerations When Importing to the USA and Canada
Importing to USA and Canada:
- Bill of Lading (BOL): A shipping document issued by the carrier to the shipper confirming that the goods have been received and are in transit. It can serve as evidence of the contract of carriage and a receipt for goods.
- Commercial Invoice (CI): This details the transaction between the importer and exporter, providing product description, price, quantities, delivery terms, information about the buyer and seller, payment terms, etc. It’s foundational for customs valuation and duty determination.
- Packing List (PL): A comprehensive breakdown of items in the shipment, including weight, dimensions, and package count. Helps customs authorities in checking and verifying shipments.
- Certificates of Origin (CoO): A document that indicates where the goods were manufactured. They can determine duty rates and are essential for specific trade agreements.
Importing to the USA:
- Importer Security Filing (ISF): Also referred to as “10+2”, ISF is a requirement to be submitted electronically to US Customs and Border Protection prior to cargo shipment, ensuring higher security.
- ACE Import Manifest Documentation: Administered by the United States Customs and Border Protection (CBP), this digital platform mandates that carriers, importers, and freight forwarders electronically submit their manifest details to CBP prior to the cargo’s arrival. This system aids in preemptive risk analysis and hastens the customs clearance procedure.
Importing to Canada:
- Canada Customs Invoice (CI1): A copy of this document is required for all shipments valued at CAD 2500 or more. This document contains information about the items being shipped into Canada, the seller, the buyer, and other related information.
- Import Declaration: A document that details the goods being imported and is filled out by the importer. It is used by Canadian customs authorities to control and manage imports.
- ACI eManifest: An electronic submission system mandated by the Canada Border Services Agency (CBSA), requiring parties involved in freight movement to submit pre-arrival cargo details. This system enables Canadian authorities to assess inbound shipment risks and expedite customs clearance.
How a Freight Forwarder Can Streamline Import Regulations and Customs Duties Process
For SMBs, a freight forwarder acts as an indispensable ally when it comes to the complex landscape of import regulations and customs duties. The expertise they possess in importing from Thailand ensures that businesses remain compliant, avoiding potential fines or delays. By handling the complexities of documentation, duties, and regulatory requirements, they allow businesses to focus on their core operations without being overwhelmed by the subtleties of global commerce.
Ship4wd is Your Trusted Partner for Importing Goods from Thailand
When navigating the complexity of importing goods from Thailand, Ship4wd serves as a trusted ally for SMBs, guiding them carefully through every phase. We have a long track record of success when it comes to importing a wide range of goods from Thailand. We work closely with you to ensure processes and procedures are handled the right way.
Being an SMB-centric company, Ship4wd places a high priority on customer service. We act as your all-in-one solution, overseeing every facet of your shipment and allowing you to concentrate on your core objective: growing and managing your company.
Furthermore, Ship4wd provides supplementary services like cargo insurance and advanced financing solutions in an effort to make your import journey as seamless and hassle-free as possible.
How to Get Started with Ship4wd
Are you looking for a way to make your import process from Thailand easier? Ship4wd is at your service, leading you through each phase. Whether you’re importing to the US, Canada, or other international destinations, sign up for our platform for instant shipping quotes to and from virtually anywhere in the world.
Our team offers specialized services and provides 24/7 customer support to address your business requirements, ensuring that your imports from Thailand are managed with the utmost efficiency.
Using Ship4wd, SMBs, you can streamline the intricate process of importing goods from Thailand. Register with Ship4wd now, and let us handle your shipping operations, freeing you to focus on growing and running your business.