First, as any process of nationalization of products in Brazil, the Import of Machines has its peculiarities and requires an important amount of planning.
If you have never made an Import before, above all, in this case, your company needs to be prepared to act in foreign trade, this means authorization to do so, as well as planning and capacity of execution.
But it is possible, yes, to import Machines and it can be much more advantageous than buying them in Brazil, regardless of the dollar quotation.
Not to mention that many machines are not even manufactured or commercialized in Brazil, so it is an opportunity of modernization to stand out from the competition.
Therefore, besides being able to help you with all the steps, we will show you here how to prepare your company for importing machines!
Why do I need to prepare my company to import machines?
Preparing your company to Import Machines is like preparing for a test or a lecture, you can go without studying, without preparing yourself, but the probability of success will be lower.
And it is after the purchase and/or shipment of the machinery that your proof will be delivered so that the real preparation of the Importer can be tested in face of the costs and the operation.
If you are prepared in advance there will be no surprises with costs and delays (within, of course, what we can control).
How to prepare my company for Machine Importation?
A simple word that could very well summarize Machine Importation is “planning”.
It is what will help in the reduction of tax and logistic costs, as well as the unforeseen events that may affect the time it will take for your product to finally arrive to you (and these unforeseen events always happen, you can be sure of that).
Of course, knowledge about Import is essential.
Therefore, we list here the preparations that we consider most important for this operation, even before paying for the machinery.
Siscomex Radar Habilitation
To perform a Formal Import in Brazil your company must be qualified to act in Foreign Trade.
This qualification is provided by the “Portal Habilita”, inside the “Portal Único”, and there are 3 modalities in RADAR for Legal Entities that vary according to the semi-annual financial volume CIF* imported:
*Sum of product value + freight + insurance
- Limited; and
If the required modality is “Express”, it is granted immediately by the Portal, that is, if your company is up to date with the tax authorities.
It is intended for companies incorporated as a public limited company, public company or mixed economy company.
The Limited option is for companies that will import for semester up to:
- US$50,000.00; or
- Between US$50,000.00 and US$150,000.00.
In the case of Unlimited, it is for values above US$150,000.00.
The Limited and Unlimited modalities require more work because they require a series of documents to be presented to Customs, which will analyze, mainly, your financial capacity.
If everything is ok and no questions are asked (nor do strikes or holidays occur along the way), approval must be obtained within 10 days.
Knowing which machine you need and its specifications, you will need to find a supplier that has quality in both product and service.
In other words, we know that this will be a commercial relationship that will last even after the delivery of the goods.
Fortunately, the online search for suppliers is accessible, either by traditional search engines (Google and Bing) or by specific ones – also called B2B (business to business), like the giant Alibaba. But be careful! Many companies that appear “beautiful” on the internet, are not exactly like that in real life! It is necessary to know the productive capacity of the company, to investigate its time in the market, to verify if the company has experience in exporting to the destination country and if there are good references.
In this way a local inspection and accreditation of the supplier / manufacturer becomes essential.
Remembering that your research cannot be limited to the Internet is a start, but it is necessary experience to identify reliable manufacturers.
Locating new suppliers at trade fairs and related events (in Brazil or abroad) is equally valid for a start of negotiations. However, checking the suitability and technical capability of the manufacturer, if possible on site, is also necessary.
Another option is to find a representative of the foreign supplier in Brazil, which facilitates the development of the purchase.
There are also companies that perform the inspection of factories and products, both to confirm their existence, as well as to test the quality of the plant and what it produces. This avoids many problems, especially in the first operation with a new manufacturer.
We have a team based in our offices in China and Brazil specialized in developing international machinery suppliers. If you would like more security in selecting a new machinery supplier, do not hesitate to contact us to discuss how we can help you.
Tax Classification (NCM)
In parallel to the search and choice of supplier, the Fiscal Classification must be done, because with it you will have information about the involved tributary costs in Brazil (II, IPI, PIS/PASEP, COFINS and ICMS).
Besides the respective administrative treatment (the need or not of Import License with some consenting organ, for example):
- (ANVISA, DECEX, INMETRO, IBAMA…) or if there are any restrictions for the Import.
Depending on the Fiscal Classification (NCM) in which the machine fits, it is possible to enjoy tax benefits such as “Ex-Tarifário” or RECAP, which reduce and exempt some of these taxes, but that is a conversation to expand on further in a future text.
For the Classification to be done correctly it is necessary to know all the characteristics of the product.
There you can find “ah, but this is very vague”, but no, the Federal Revenue Service itself, through Decree No. 6.759/2009, in its Article 711, § 1, item III, requires:
III – complete description of the goods: all characteristics necessary for fiscal classification, species, trademark, model, commercial or scientific name and other attributes established by the Brazilian Internal Revenue Service that confers its commercial identity (…).
Summarizing, all this research will help you to reach the description of the goods, because if there is any omission or error, both in the description and in the tax classification, you risk being fined with the equivalent to 1% of the Customs Value.
These responsibilities belong to the importer and yes, your exporter has the obligation to provide the information you need to describe and classify the goods, but it is up to you to request and often check technical descriptions compatible with the rule of the country where the machine will be imported, which auxiliary equipment accompany the machine or assembly, require photos that prove, etc.
Negotiate with the supplier
Once the supplier and model are defined, it is necessary to negotiate all the details that involve the payment of the machine: who will be responsible for paying the costs of the packaging of the product origin, internal transport of origin, documentation, fees, expenses and customs clearance at origin and especially freight and international insurance? It is also necessary to check the costs with the future installation of the machine, and whether it will be necessary to send a technician by the manufacturer to install the machine or only the instructions or manuals will be sufficient. Which language will the manufacturer provide the manual in?
It is essential to negotiate with the manufacturer the adjustments of the machinery for the Brazilian market. Important details such as power and frequency adjustments of motors (Brazil uses the frequency of 60HZ while in most other countries the frequency is 50HZ), components that have technical assistance in Brazil, spare parts etc.
It is also important to pay attention to the operational deadlines for compensation of international payments, production times and delivery estimates of the finished product. All this must be negotiated before closing the deal.
Planning the operation and estimating costs of Importation
Once the model, supplier, machine value and Tax Classification are defined, now it is time to plan the logistic operation to finally know all the costs of the Import.
We are talking about defining the cargo packaging, where it will embark and disembark…
Especially in the case of international transport, depending on the dimensions and weight of your machine, you may need special containers such as Platform or Flat Rack. It may even be cheaper by air, if the dimensions and characteristics allow viability.
Believe me, a 100Kg machine can be easily more viable to import by airplane.
It is also necessary to estimate the costs at the destination customs terminal (where the Customs Clearance will be done), this is an estimate made in conjunction with the mode of transport chosen.
As well as being careful with the Demurrage of Container, with the cost of national road transport, Customs Broker etc… More subjects to expand on in future texts 😉