There are 14 steps to follow. If you do, you will know how the process for importing goods into the Netherlands works. Whether you are planning to import cool gadgets from China, or robust machinery from Germany. This checklist will help you prepare.
Video: Importing, how do you do that?
1. Do market research
Before you start importing, find out if your plans are feasible. Who are going to be your customers? Market research can help you identify them. There are several free market research resources at hand.
Use the results of your market research to draw up an import plan.
The import plan helps you to weigh the opportunities and threats. In short, to find out if your business is ready to start importing.
2. Check import restrictions
Find out if there are any import restrictions or instructions for your product. Some products require a certificate.
These products require a licence, certificate, or other document:
- Excise duty goods, like alcoholic drinks
- Waste (EVOA)
- Endangered animals and plants
- Biological products
- Chemicals (REACH)
- Cultural objects
- Animals and animal products
- Plants, vegetables, fruits
- Radioactive substances
- Strategic goods and services
- Weapons and ammunition
You can import most products. If you import products from a non-EU country, there may be restrictions in place, for example due to international sanctions. Some products require an import licence or other document.
If you import a product from an EU country, there are hardly any restrictions. But do take into account the Dutch Commodities Act (Nederlandse Warenwet voor consumentenproducten).
3. Choose your role
If you are an importer, you purchase products from a foreign supplier for your own use or sales. If you trade the goods, you build a supply and determine your own profit margin.
As a commercial agent, you search for customers in your country on behalf of a foreign company. You do not purchase, you mediate between the supplier and the customer. The foreign supplier delivers and invoices directly to the customer you have procured. As an agent, you are protected by law.
Check out the differences between importers and commercial agents (in Dutch), and determine which role you want to play.
4. Check the product requirements
Each product that comes onto the market must be safe. To give an example, machinery that is brought onto the European market often has to meet the CE machinery guideline. There are also CE guidelines for other product groups, including toys, medical devices, electrical appliances, and electronic equipment. If you import foodstuffs, your products have to meet the demands for food safety. REACH is an EU act that regulates the restriction of the use of chemicals. Does your product meet the product requirements?
5. Find your supplier
There are several ways of finding foreign suppliers. Visiting a trade show, for example, or via the Dutch embassy network. Be aware of cultural differences, and check your business partner’s credentials. Find out if they are registered in a foreign trade register, and whether the company is financially viable. If possible, request free samples to compare different suppliers’ products for quality, colour, or design.
6. Request a quotation
Ask the supplier for a clear quotation. A quotation consists of different parts, for instance price, delivery time, and payment conditions. Negotiate the terms of the quotation, and ask for adjustments if necessary. Also check if the quotation mentions the Incoterms®. These are standard agreements about the transport of the products. If you use one of the 11 Incoterms®, you have a clear agreement with your supplier on who is responsible for arranging transport and who runs the risk of damage to the goods during transport.
7. Arrange transport
You can transport goods by road, rail, water, and air. Each mode of transport has its pros and cons. Do you want fast delivery of a parcel from abroad? Then you can opt for express delivery. Does the transport involve different means of transport and transport companies? Then you can hire the services of a forwarding agent. A forwarding agent is a transport broker, a type of mediator. They arrange the transport of your products, and sees to it that the transport documents are correct and in order. Does your import shipment come from a non-EU country? The forwarder can take care of the customs clearance.
8. Get informed on payment methods
You and the supplier agree on a payment method. If you agree on payment after delivery, you as an importer run no risk. If both parties are looking for guarantees, you can opt for payment based on documents. After the supplier has handed you the correct trade documents, for instance a transport document or a certificate of origin, you pay for the goods. That way, the supplier has more certainty that you will pay, and you are certain that they will deliver the goods. Two ways to arrange payment on the basis of documents are the letter of credit, and documents against payment or acceptance. Ask your bank for advice on the payment method best suited to your transaction.
9. Think about insurance
Transporters are liable for any damages due to transport up to a maximum amount per kilogram. If the damage is due to force majeure, the transporter is not liable at all. Transport insurance can be a good idea. Whether or not you need transport insurance depends on the Incoterm® you and the supplier agree on.If you import products from outside the European Economic Area (EEA), or if you market a product under a private label, you should consider taking out insurance against product liability. It will cover any damages if the product turns out to be faulty.
Do you pay your supplier in a different currency from the euro? You may run the risk of currency fluctuation, making your product more expensive than you anticipated when making the purchase. There are several ways to cover the risk of currency fluctuation.
10. Check if you need to file a customs declaration
Usually, you do not have to declare your goods at customs if you import from an EU member state. There are exceptions. You need customs clearance if you:
- Import excise duty goods from EU countries
- Import goods via a non-EU country, so for instance, from Italy via Switzerland
If you import products from a non-EU country, you need to declare them at customs. A customs declaration is a digital file. Usually, a customs representative, such as a logistics service provider or a customs broker, will complete and file it for you.
11. Take import taxes into account
If you import products from an EU country, you do not pay import duties. Be sure to check the VAT rules inside the EU. As the importer, you will usually receive a 0% VAT invoice from your supplier. You then need to calculate the Dutch VAT yourself and list it in your VAT return.
When you import from non-EU countries, you usually do need to pay import tax. How much you have to pay depends on the product code. Customs uses product codes, or HS codes, to categorise products.
Do you import products made in and from a country with which the EU has a trade agreement? Then you usually pay fewer or no import duties. You will need certificates of origin from your supplier. When you import from non-EU countries, you also pay VAT on import (in Dutch).
12. Make a list of the required import documents
You need import documents if you import products from abroad. For imports from EU countries, you usually only need a transport document, an invoice, and a delivery note. You usually need additional documents for shipments from non-EU countries. For example:
- customs documents
- origin documents
- health certificates
- import certificates
- import licences
These documents are often issued by government organisations. Check which documents you need for your import from a non-EU country by asking your customs broker, or by consulting the EU Access2Markets tool.
13. Calculate your cost price
A cost price calculation makes clear how much it costs to bring a product into the Netherlands, and how much you should charge for it to make a profit. Direct costs are costs that come with the product itself, including:
- Purchase costs
- Transport costs
- Import duties
Direct costs vary per country and per product. For example, if you import products made in and shipped from Indonesia, you import duties will normally be lower than if you import from China. And: the further away your supplier’s country, the higher the costs for transport.
Indirect costs are your fixed business costs, such as:
- Advertising budget
- Travel costs
- Staff wages
14. Sign a written contract
Do you have the entire import process mapped out, and are you ready to close a deal? Lay down the agreements you and your supplier make in a written contract. That way, both parties are clear on their rights and duties. A contract provides clarity and prevents disputes. It is usual for the supplier to draw up a contract, as the selling party. Hire a lawyer to evaluate the contract before you sign. If you are entering into a structural collaboration, as a distributor or a commercial agent, draw up a distribution agreement or a commercial agent agreement.