As the 10th anniversary of the Chile-Mexico FTA approaches in April 2018 and business opportunities grow in Mexico, we thought we could give you some insight on how you can export from Chile to Mexico. By following these few essential steps, you will be sure to prosper with your international trade endeavors in Mexico and Chile!
Table of Contents
Step 1: Know Why You’re Exporting to Mexico from Chile
Since the late 1980’s, Mexico has put a tremendous amount of effort in creating FTAs all around the World in order to boost its trade. Today, the second strongest economy in Latin America is proud to boast about its 11 trade deals with 46 countries. Thanks to these, Mexico has free and direct access to 60% of the World’s GDP.
In 2015, it received USD $377 billion worth of imports. So whether you want to export wood, fertilizers, meat, fruit or vegetables from Chile, you’re sure to prosper.
Step 2: Choose the Right Type of Transport
It would be unwise to export your goods by highway transport. It’s an extremely long road from Chile to Mexico, as it goes along the Andes and crosses a minimum of 9 borders. You can imagine that if it’s wine you are exporting, by the time it gets to Mexico it might be a bit shaken.
Exporting by railway transport would be the same – there isn’t a direct line from Chile to Mexico. Your merchandise would have to be transferred off trains at a station on the way. You would have to expect extra costs in insurance and more time, for a similar final price.
The most convenient way to transport your goods is inevitably by container carrier. It is a cheap, safe and reliable type of transport. Also, there are many ports the ships leave from in Chile which is very convenient. The ship will cruise up the Pacific to arrive in the port of Manzanillo, Colima, which is located 820 km from Mexico City.
Lastly, you might be thinking of sending your merchandise by air. This type of transport is undeniably faster, but you will have to pay at least 2 to 3 times more than if you sent it by ship. It’s all a question of budget…
Step 3: Have the Correct Paperwork
This is the tricky technical part of exporting. If you don’t have the exact paperwork requested by both countries, you won’t be able to succeed in exporting your goods. These forms have to be completed with care as you could be fined if not done correctly.
1. The invoice:
This is the first and foremost important document you need. It has to be the receipted invoice which simply confirms your purchase of the goods that have to be exported. Therefore it has to contain an address located in the country of importation.
2. The Certificate of Origin:
Thanks to the current FTA between Chile and Mexico, you can export your goods for free. However, you will have to prove that they are from Chile. This certificate will prove that, in order for you to avoid paying the IGI (Impuesto General de Importación). This is the tax you have to pay at Mexico’s border if your goods are from a country which doesn’t have a shared FTA. The tax approximately oscillates between 5% and 10% of the total value of the merchandise.
If your goods are partially made from Chilean components but the whole has a majority of it that is foreign, you may not be able to receive the certificate of origin and you will be asked to pay the tax. This law was enforced in order to prevent people from exporting to Mexico through Chile to avoid paying the IGI.
If the value of your merchandise exceeds USD $1000, you will be asked to show an additional document, a DUS (Documento Único de Salida). This is simply for the customs to legally certify the big scale exports of goods.
3. The Phytosanitary Certificate:
You will only need this document if you are exporting agricultural products such as wood, wine or grapes. The customs will request a phytosanitary certificate testifying that your product is in line with health and safety requirements.
4. The B/L:
The bill of lading is the document which simply states what exactly your load contains. This will enable the customs agents to verify your load both before it leaves a Chilean port, and before it is let in Mexico.
5. The Request Form
The ‘pedimento’, or request form is the document that proves that all the relevant taxes have been paid to the SAT (Servicio de Administración Tributaria), in the case when you wouldn’t have the certificate of origin. The SAT is the tax authority of Mexico. Therefore this form is entirely Mexican. It will be kept in Mexico where the goods are expected to arrive. It contains the name and address of the importer and that of the provider. This document has to be prepared with care as you will be fined by the Mexican fiscal authorities if there are mistakes or undeclared goods.
When your merchandise arrives in Manzanillo, Mexico…
When your container arrives in Mexico, the customs agents will run a full check of your load. This is not a quick check, it is a full, complete inspection of the entire merchandise. They make sure everything is there in accordance with the bill of lading. Once the inspection is complete, then the importer is allowed to sign the request form and the load is free to leave the port.
General Advice for guaranteed success:
The whole process of exporting might seem quite complex and technical. Nevertheless, it offers great opportunities for doing business, especially when exporting to attractive emerging economies. If you want to accomplish this process with definite success, you will need help from a proxy company. It won’t come as a surprise to you that you will need a legal department to organize the procedure and getting all of the paperwork in order. By trying to act alone, you may risk facing hefty fines from the tax authorities in either Chile or Mexico. You will need the assistance of local experts who are conscious of the complexities of these legal systems.
In Mexico City, Biz Latin Hub assists clients in handling their exports to Mexico. They offer the necessary help to companies for them to not have to worry about the technical complexities of exporting. Biz Latin Hub is a market leader in helping both local and foreign companies to successfully do business in Mexico and the whole of Latin America and can help you with our multilingual back-office services.
Find Out More About LATAM Business Opportunities
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Make sure to check out this video on how to export to Mexico by one of our team members here: