Importing From China to Canada: A Step-by-Step Guide for 2023
Are you looking to import from China to Canada? Yes, it can be profitable if you’ve done everything correctly.
In this article, I’ve covered all the critical points you should know before starting your import business.
Chapter 1 How to Start Import Business in Canada
Import and export is a rewarding business if you know the tricks and abide by the rules and regulations. This chapter includes the initial steps you need to take before starting your trade in Canada. You need an import number and import permit before importing any goods from China.
1.1) Get an Import Number/License in Canada
If you want to import commercial products in Canada, as an individual or as a business, you will need a Business Number (BN), also called an import number. The Canada Revenue Agency (CRA) for an export or import account will provide you this number. These export or import accounts are totally free of charge, and you can obtain it in a matter of a minute. However, without these numbers, you will not be allowed to make any trade in Canada.
1.2) Applying for an Import Permit Canada
You also need to apply for the import license in Canada. They are either issued under import authorizations or import allocations according to the Import Permit Regulations. Moreover, the permit cost gets cut from the authorization balance.
You can get an import permit from the office of Global Affairs Canada located in Ottawa. You can obtain the list of Export Import Control System (EICS) Online Customs Brokers who have access to the system from the Trade Controls Bureau (TID).
Chapter 2 What does Canada Import from China?
In this chapter, you will get an overview of the products and goods which Canada imports from China. While the list is long, here are a few big imports.
2.1) Products to Import to Canada
There are several things that Canada imports from China, from machinery to furniture to cosmetics and electronics. Canada is a big market in China. The items Canada imports from Chinese manufacturers include electronics, building material, solar panels, bags, jewelry, clothes, tires, auto parts, toys, and many other things.
· Import Furniture from China to Canada
China is the best market for furniture all over the world. You can find any type, design, and size of furniture in China. The best thing about Chinese furniture is its cost-effectiveness. China is also best to import items because of their smooth shipment procedure.
· Import Tires from China to Canada
Canada imports low-cost tires from China in a considerable amount. Not only are these tires less expensive, but they also have good quality than other tires available on the market. Because of the increasing automobile market, Canada imports robust tires to run their vehicles.
· Importing LED lights from China to Canada
China has immense technology and has worked on its every aspect. They have manufactured some of the best machinery and electronic items in the world. The LED lights made in China are also quite famous. No wonder the spark of these LED lights caught Canada’s attention a long time ago. Now Canada is importing LED lights in bulk from China.
· Import Clothes from China to Canada
Canada is also importing clothes from China, including pants, t-shirts, women’s dresses, socks, and other things. They are importing both men and women clothes, which they later sell at high rates in Canada. The same goes for children’s wear. They can get some amazing made in China clothes. Canada is also a vast market of shoes, which also gives an enormous profit to Canadian importers.
· Importing Aluminum from China to Canada
Aluminum is another construction material that Canada gets from the Chinese. They import it because of its durability and cost-efficiency.
· Importing Electric Bikes from China to Canada
The automobile industry of China has risen since the last few decades. Not only Canada, but many other countries are importing vehicles, especially E-bikes from China.
So, if you are considering establishing your import business in Canada, you will need a reliable supplier. In this chapter, you will learn about the methods and ways to find a reliable supplier to import from China to Canada.
If you would like to further ensure the legitimacy as well as the quality level of your candidate suppliers, we have another, more in-depth article on how to verify Chinese companies.
· Product Variety
This is a significant difference between the factories and the trading company. In China, most manufacturers make a specific product and focus on one type of manufacturing process. The reason for this strategy is the high cost of installing various types of machinery for producing different products. Offering multiple products also needs more man labor which is an additional cost.
For example, if a company called ”Football Product Manufacturing Company” sells complete football gear, such as the football, helmet, shoulder pads, clothing, footwear, mouth guard, etc., it is very likely not a manufacturing company. In this case, it is a trading company that sells all a variety of products.
· Name of the Company
An interesting difference between a factory and a trading company is the name of the company. Trading companies have a more extensive setup, and they look for ways to attract global customers. Hence, they use marketable names that can draw customers’ attention. Trading companies use consumer-friendly names that are easy to remember for local as well as overseas customers. Whereas, the prime focus of manufacturers or factories is the local clientele. They don’t usually use appealing names for their companies.
Moreover, you can also get an idea of a manufacturing company when you see a city or town name in their title followed by their Chinese name spelling in Pinyin. For example, a company in Guangzhou that makes wired mesh could run their business by the name “Guangzhou Yongqiang Metal Products Co., Ltd.” However, this name may not appeal the overseas customers, which is why trading companies follow the other path. The trading company will use a more creative and engaging name for their business like “Guangzhou WireLand Limited.”
· Company Location
Search the location of the company before contacting them. Check the Google maps and details of the company. You will find most of the manufacturers in densely-populated metropolitan towns and locations like Guangzhou, Foshan, and Shenzhen. However, if you locate the company anywhere near downtown, they might not be a manufacturing company.
Manufacturers usually don’t make offices in the downtown area. You can do little more investigation to get an exact idea and check whether the company producing the goods owns that office.
· Company Website
As the trading company is more concerned about attracting a large client base, they make sure their company website has a user-friendly interface and is easy to navigate. Also, check the language of the content on the website. If the entire text of the website is in English, chances are you are engaging with a trading company’s website.
Even the largest Chinese factories lack decent advertising and have sub-standard websites with a poor layout. Moreover, these websites have little to no content in English. Poor web-layout is one of the reasons why Chinese factories are losing their hold, and trading companies are taking over the market.
3.2) Tips to Find Reliable and Suitable Manufacturers in China
It’s essential to find the right supplier so that you don’t have to switch it down the road. In case if you make a mistake in finding the best one, it can cause you many problems. Moreover, changing the supplier suddenly can cause a delay of at least six months in the production of your goods.
The following are some tips to find a reliable and suitable supplier to import from China to Canada.
· Size of the Manufacturers
The size of the suppliers is an important consideration. Many importers look for the biggest factories, ISO certification, and lowest prices. However, this is not a one-fits-all-size solution. Don’t try to find someone too big for your company. It is perfect if you represent 10% to 50% of their size. The large manufacturers are not flexible and will not give you priority over others.
On the other hand, avoid working with small workshops which have less than 10 workers. These small suppliers are not capable enough to complete all your requirements regarding the goods.
· Visit the Factory
It’s essential to visit the factory before making any decision. You can go by yourself or can send anyone from your team. If you have a choice, you can send an independent auditor. When visiting the place, check that if they are large enough to produce your massive order? Do they get orders in small amounts? Do they have a proper quality assurance system? And most of all, how much they know about the product standard in your country?
· Beware Of Subcontracting
Subcontracting to a small and incapable workshop is pretty common. It lowers down the quality of your products. To avoid this problem, you can ask your supplier to ensure production will take place in the same factory they presented.
Moreover, pay another visit to the supplier without booking in advance, you will find out if they are the manufacturer of these products.
4.1) Samples with Detailed Remark
Ask for the samples and approve the best one. But don’t stop here. Pen down details about the product’s specifications, materials, and packaging. If you miss out on any point, the factory will make its own choice during the production. This way, the end results might not be what you expected. So, make sure to write every inch of specifications and requirements that you are optimistic about receiving.
4.2) Understand the Safety Standards of Your Products
Make sure to search for information about the safety regulations related to your products on your domestic market. You can search it on the official website or get help from a supply chain management company. Asking your supplier about product safety is not a great idea. They can hide something from you in order to maximize the profit.
4.3) Write Down your Requirement Clearly in Chinese
It’s the best way to write your needs precisely. Your requirements must be easy to understand so that you can translate them into Chinese. This is because Chinese suppliers don’t understand English well enough to interpret it rightly. Your supplier will not distort your information if you follow this step. Make sure to get a signature at the bottom of the paper so that they don’t make false claims in the end.
4.4) Let Suppliers Know you will Send Someone to Check Quality before Final Payment
If you want to save yourself from last-minute disasters, you need to check the quality of products before importing them. Notify your supplier that you will check the goods after their production.
Don’t get into their traps when they say, “trust me, the quality will be top-notch, and I will inspect it.” if you are unable to visit by yourself, send someone on your behalf.
4.5) Lab Testing
You also need to lab test your products and need some certifications to import from China to Canada. If you are looking for the most affordable way to do this, ask your supplier to provide the certificate, though it will be risky to trust them. You can also ask your buying agent to pick the samples at random and test them in a lab. This procedure will take time, but it is the safest method.
4.6) Pre-shipment Inspection
When large global brands import from Chinese manufacturers, their inspection normally takes place after the production finishes and some days before the shipment. However, if you inspect your finished products just before the shipment goes but found a large defective percentage, it can turn into a blow. So, conduct an inspection at least one week before loading container can help you to re-work on the product if there is any problem.
Chapter 5 Shipping from China to Canada
In this chapter, you will learn about the best ways of shipping from China to Canada. You will know about the fastest and cheapest ways to import your goods.
· Sea Shipping from China to Canada
There are two methods of sea shipping from China to Canada. The first one is the FCL, i.e., full container load sea freight from China to Canada. As the name suggests, your goods will fill up the entire container. You can save your time and money if you have to import a whopping amount of products.
The other one is LCL, i.e., less than container load sea freight from China to Canada. In this method, your goods don’t cover the entire container; instead, the manufacturers will ship the products with other pallets or boxes. It also takes more time than FCL because your goods are consolidated at the origin port and need to unconsolidated at the destination port.
· Air Shipping from China to Canada
Shipping by air is the fastest method. However, it will cost you a handful of money. If you need the products urgently and willing to pay a higher cost, this is what you should consider.
· Shipping from China to Canada Time
The time of the shipment totally depends on your chosen procedure. Shipping express takes 1 to 4 days, but it’s the most expensive method and is not right for importing goods in bulk.
Moreover, air freight will take anywhere from 5 to 15 days. Whereas sea freight takes more days than any other, this is about 28 to 35 days.
· Shipping Routes from China to Canada
There are various shipping routes to import from China to Canada. Your agent or freight provider will also guide you on what will be best for you, based on location, clearance, transit time, ease of customs, and port volume.
The following are the best ports to export from China.
- Shanghai
- Ningbo
- Guangzhou
- Shenzhen
· Fastest Shipping from China to Canada
If you want to import the bulk of goods from China and are looking for the fastest shipping method, choose air freight method. However, it is pretty costly, but you will get your products on time.
Moreover, if you are looking for a less quantity shipment method which should also be fastest, you can choose to express from China to Canada. But remember, it is perfect for only a small quantity of products.
· Shipping from China to Canada cost
The cost can vary. It will take an average of $2,500 to ship one 40′ container from China during peak seasons.
Chapter 6 How to Deal with Import Customs in Canada
Here you will learn about how you can calculate the import duty and do you want to choose a customs broker for you to import from China to Canada.
6.1) How to Calculate Duty on Import to Canada?
There’s an easy way to calculate the duty on import to Canada. See the value in the currency written on the invoice. Convert that value into Canadian dollars. Make sure to convert using the exchange rate from the date of direct shipment, which is the day your goods were shipped to the required destination in Canada. In this regard to the proper exchange rate, call the Border Information Service (BIS).
Suppose the currency conversion of US $100 is CAN $115. This is your value of duty. Now multiply the value with custom duty rate, suppose it is 4%. The result will be $4.60, and it’s your custom duty.
Now retake the value of duty and add it with customs duty result ($4.60). Your result will be $119.60, which will be your value for tax. To calculate GST, multiply the amount of tax with GST; if it is 5%, the result will be $5.98.
In the end, add custom duty and GST together. You will get the answer to $10.58, which you will need to pay.
6.2) How to Use Canadian Import Duties Calculator?
You can use the calculators which are readily available on the internet. But do remember that they only give you estimation. The amount you have to pay can vary from the calculated amount.
These calculators are also pretty easy to use. You only need to fill up the blanks, and you will get your results at the end.
6.3) Determine Whether You Will Take Help From Customs Broker?
You can prepare your own lease and accounting documents. Or you can contact the local customs office. Importers, who don’t want to communicate directly with the brokers, can authorize a customs agent to do the business with CBSA.
However, importers will be responsible for the accounting documentation, payments of the taxes and duties, and other things, even if they can take help from the agent. The importer will be reliable for all due payments until the agent or importer pay them off.