Export of and Import to Portugal, can be the only ways for a company to have a reliable economic model in one market as limited as the Portuguese.
Nowadays, if you want to have an economically sustainable company, especially in a market as limited in size as ours, borders can – and should – be mere geographical references, without being of decisive importance in delimiting the space in which business takes place. It is in this context that imports and exports of products – or intra-community transactions of goods, when it comes to the trading of goods within the European Union – arise, and are the result of established agreements.
Importing safely into Portugal is nothing too complex. However, it is a process that can involve some risks. It’s important to identify these risks in order to be prepared for them, so that you can mitigate them. Care must be taken to ensure that everything runs smoothly.
With this article, Green Ibérica wants to take a brief look at the subject and give you some tips that can help you get started.
Planning
First of all, planning is fundamental. It’s true that, as good Portuguese people, we always have the art of “making do” in us. But perhaps it’s best to save this cultural quality for other fields. You need to develop a good business plan in order to know/define the strategic path to follow. Research, calculate, make resources available and describe all the necessary actions in detail.
Make Sure You’re Legally Able to Import to Portugal
Once you have planned and know exactly where you want to go, make sure that your company meets all the legal requirements to be able to carry out this type of transaction. Then make sure that the company’s NIPC is in order and that it includes import and export activity in its corporate purpose.
Select Your Import Suppliers
This is one of the most important points for business success. To ensure the reliability of potential suppliers, and to import into Portugal, visit fairs, conferences, congresses, etc. where they may be present. The simple fact that they are present at these types of events conveys trust. This is in addition to personal contact with the company, its representatives and its products/services, which can help you gauge whether it’s what your business needs. In addition, looking for references is never a bad idea. Try to find out more about where the company sells and who its customers are. If possible, get in touch with those customers to hear about their experience.
There are several websites that can help you find the best events for what you’re looking for. n’Feiras and 10times are two examples, but there are many more, so all you have to do is search a little for the area that interests you.
Visit the Supplier Factory
There’s no better way to get to know your supplier and your product than to evaluate it in situ. If you can, check out the production process. This includes the condition of the machinery, certificates, safety standards and anything else that can attest to the seriousness and quality of your supplier.
Draw up a Cost Sheet
It’s not always easy to immediately understand how much you will pay, because the value of the product is just one of the costs you may incur. Finding out about the taxes, duties, insurance and other amounts involved in importing into Portugal will help you negotiate and determine its viability.
So before you close the deal, take into account all the potential costs, which may include:
- International transportation;
- International Transport Insurance;
- Import tax;
- Customs fees;
- VAT;
- Bank charges;
- Port taxes;
- Storage fees;
- Customs Broker;
- Internal transport…
Negotiate Incoterms
At the time of negotiation, it is possible that the supplier will offer you three intercoms[1] related to the transportation of the goods. The different options will have different characteristics and therefore different costs:
- FOB – Free On Board (or FCA – Free Carrier, used for air cargo) – This covers the cost of transporting the goods from the factory (or other shipping point) to the port where the cargo is shipped. From there, the costs are borne by the buyer.
- CFR – Cost and FReight – The seller is responsible for sea transport to the port of destination. The buyer is responsible for additional transport.
- DAP – Delivery At Place – This service covers all transportation of goods, from the place of origin to the place of destination.
Choosing the best incoterm will depend a lot on the knowledge and contacts you have, especially where the product you are buying comes from.
Documents needed to import into Portugal
Once the shipment has been made, the exporter sends various documents that will allow the importer to clear the goods through customs. Pay close attention to the details in the documents, as small inaccuracies can lead to big problems, up to and including the seizure of the goods. Looking for an experienced partner can be important when you don’t have this knowledge on your side.
There are global laws and therefore documentation that is mandatory, regardless of the country of origin and destination of the goods. In addition to these global laws, there are also local regulations that you should study so that you don’t get any unpleasant surprises.
Some of the most important import documents:
- Bill of Lading (or B/L) – This is the most important document for maritime transport. It is issued by the shipowner (or the transport agent, as is the case with Green Ibérica) in order to have knowledge of a shipment of goods. The B/L serves three main purposes: it is the contract of carriage between the shipper and the shipowner; it serves as a receipt for the delivery of the goods; and it is the title to the goods, which can usually be negotiated/transferred.
- AirWay Bill – Just like the B/L in maritime transportation, the AirWay Bill is the most important document in air cargo transportation which, unlike the latter, can never be negotiated. The main functions of the AirWay Bill are: Contract of carriage; proof of receipt of goods; waybill; insurance certificate; customs declaration…
- Commercial Invoice – Issued by the supplier, the commercial invoice contains company and cargo data. In many countries it is used to determine the value of the goods when assessing customs duties.
- Packing List – This is a document that complements the commercial invoice and aims to describe the contents of the shipment. It identifies the volumes, dimensions, weights, references, etc. of each package. In short, the Packing List includes boxes and/or packages transported, while the commercial invoice covers each item sold.
- Certificate of Origin – Just as the name suggests, it proves the origin of the cargo. There are several Certificates of Origin, the most common of which is Form A. As well as declaring the origin of products, this form makes it possible to obtain tax benefits for certain goods.
- Insurance Certificate – This is a way of guaranteeing the consignee that, during transportation, any possible loss and/or damage to their goods is covered.
Conclusion
Here are just a few tips that may be useful if you are thinking of internationalizing your business. Internationalization, and exporting or importing to Portugal, may be your only chance of managing a dynamic and consistent company. Even so, it’s probably a good idea not to jump in headfirst. Follow a solid path, paying attention to the response you get from the market. Don’t forget the most important thing: surround yourself with safe people/companies with more experience in this field. Gather as much information as possible.
Work, have confidence and believe. Your resilience will be rewarded!