Every year, thousands of companies face the same question when expanding internationally: do we need to set up a local company before we can import? Most of them make the same assumption at the start: before we can import goods, we need to set up a local company. They spend three to six months on company registration, tax identification numbers, banking, local directors, and compliance registrations before a single product reaches a customer. Some of them discover, after the entity is established, that the import certifications and product approvals they actually need are separate from the corporate structure and require another three to six months to obtain. Others discover the entity setup cost twice as much as forecast. A significant number discover the new market never reached the volume that justified the investment. There is a faster, more capital-efficient way to achieve this. It exists, it is legal in every major market, and it is used by companies ranging from startups testing their first export market to global enterprises managing supply chains across 100 countries. This guide explains how to import into a new country without setting up a legal entity, what each major market requires, what the real costs are, and how to evaluate whether IOR is the right structure for your expansion.
Why Most Companies Think They Need a Local Entity First
The assumption that you must set up a local company before entering a new market commercially is understandable, but incorrect in most markets. The World Customs Organization Revised Kyoto Convention, which governs customs procedures across 116 contracting parties, recognises the role of third-party agents and representatives in customs declarations in every signatory country. The confusion comes from conflating two separate legal requirements: the requirement to have a legal entity in the destination country to conduct business there (sell products, sign contracts, employ staff, pay local taxes) and the requirement to have a legally registered importing entity on the customs declaration.
These are different requirements. The second one does not have to be you. Every customs declaration in every country requires a named Importer of Record. That IOR must be a legally registered entity in the destination country in most markets. But that entity does not have to be your company. It can be a specialist third-party IOR provider. This third-party structure is the mechanism that allows you to bypass local incorporation. The IOR takes legal responsibility for the customs entry and releases the goods to you or your customer once clearance is complete. You never need to incorporate a company, open a bank account, or hire a local employee to access this structure. You simply need to engage the right IOR partner.
What Is an Importer of Record and Why It Matters
Understanding what an Importer of Record is is the starting point for every international expansion that does not involve a local entity. The IOR is the legally registered entity in the destination country that:
- Files the customs import declaration in the destination country’s customs system
- Pays all applicable import duties, taxes, and fees to the customs authority
- Holds or coordinates all required product certifications, approvals, and licences for the goods being imported
- Bears legal responsibility for the accuracy of the customs declaration, the correct tariff classification, and the compliance of the goods with local regulations
- Maintains all import records for the statutory retention period in the destination country
When a foreign company engages a specialist IOR provider to handle market entry without a subsidiary, that provider’s locally registered entity becomes the IOR on every customs declaration. The foreign company’s goods enter the destination market legally, all duties are paid correctly, all required certifications are in place, and the goods are released to the final customer or the foreign company’s distribution partner. The foreign company never appears on the customs declaration as the importing party. The IOR does.
Import Into a New Country Without Setting Up a Legal Entity: How It Works in Practice
The practical structure for a company entering a new market without incorporating locally follows five steps:
- The foreign company agrees commercial terms with the destination country customer under Delivered Duty Paid (DDP) Incoterms or similar. Under DDP, the seller (the foreign company) takes responsibility for delivering the goods to the buyer’s door with all duties paid and all import compliance handled. The buyer pays one price. They do not interact with customs at all
- The foreign company engages a specialist IOR provider in the destination country. The IOR provider holds a locally registered entity with the required customs registration, tax identification number, and import licences for the product categories being imported. The IOR provider becomes the legal importer on the customs declaration
- The foreign company’s freight forwarder ships the goods to the destination country port. The shipping documentation names the IOR provider as the consignee and importer of record
- The IOR provider files the customs import declaration, pays all duties and taxes, manages any required inspections, and coordinates the release of goods from customs. All product certifications, approvals, and licences held by the IOR provider are presented at clearance
- Once customs clears the goods, they are delivered to the final customer or the foreign company’s local distribution partner. The IOR provider invoices the foreign company for the duty amounts paid plus their service fee. The foreign company’s customer receives their goods on DDP terms as agreed
The entire sequence gives a foreign company full import capability within days in markets with straightforward import requirements. In markets with mandatory product certifications (electronics certification in Japan, medical device registration in Germany, telecom type approval in Malaysia), the timeline extends to match the certification lead time, which the IOR provider manages on the foreign company’s behalf.
Which Markets Require a Local Entity and Which Allow Third-Party IOR
The IOR structure is available in virtually every market. The specific registration, certification, and documentation requirements that the IOR must hold vary significantly by market. Here is what third-party IOR looks like in the markets where it is most commonly needed:
United States
A foreign company can import into the US without a US legal entity by engaging a third-party IOR with a valid US importer ID, continuous customs bond, and ACE filing capability. The IOR files the entry with CBP, pays all duties, and manages FDA prior notice or CPSC eFiling where required. The US is one of the most accessible markets for third-party IOR because the importer ID system allows non-resident entities to hold importing credentials. For IOR in the USA, there is no mandatory US entity requirement provided the third-party IOR has the required credentials and bond coverage.
European Union
Every EU customs entry requires a named importer with a valid EORI number. A non-EU company cannot be named as IOR on an EU customs declaration without an EORI. A third-party IOR provider with EU entity registration and EORI in any EU member state can import on behalf of foreign companies across all 27 member states. VAT registration in the destination member state is required for the IOR to manage import VAT recovery. For Germany, France, Netherlands, and other key EU markets, specialist IOR providers hold the EORI, VAT registration, and fiscal representative credentials required for compliant import without a foreign company setting up a subsidiary.
United Kingdom
Since Brexit, the UK operates a separate customs regime from the EU. Every UK import requires a named importer with a UK EORI number. A non-UK company needs either a UK-established entity or a third-party IOR with UK EORI. For IOR in the UK, the third-party structure is well-established and allows foreign companies to access the UK market on DDP terms without a UK subsidiary. UK VAT at 20% is payable at import and recoverable by VAT-registered entities. Postponed VAT Accounting is available to UK-registered importers and reduces the cash flow cost of VAT at the border.
India
India requires an Import Export Code (IEC) issued by DGFT before any commercial import can be filed. A foreign company without an Indian entity cannot obtain an IEC. A third-party IOR with an active IEC and GST registration imports on behalf of foreign companies, files the Bill of Entry through ICEGATE, and manages BIS CRS certification for electronics and IT hardware. For IOR in India, the third-party structure is the standard route for foreign companies entering the Indian market without a WFOE or branch office.
Brazil
Brazil is one of the most complex import markets in the world. The importer must hold a CNPJ (Brazilian tax registration) and RADAR authorisation from Receita Federal before any commercial import can be filed through SISCOMEX. A foreign company without a Brazilian legal entity cannot obtain CNPJ or RADAR independently. Third-party IOR in Brazil is therefore not optional for foreign companies. It is the only legal route. The IOR provider holds the CNPJ, RADAR authorisation, and SISCOMEX filing capability and imports on behalf of foreign companies under a comercialização agreement. INMETRO product certification for electronics must also be coordinated by the local IOR entity.
Saudi Arabia and UAE: IOR Without a Local Entity
Both markets require a locally registered importing entity, so foreign companies must use a third-party IOR provider. In Saudi Arabia, a foreign company needs either a Saudi entity or a third-party IOR with SASO type approval and GAZT VAT registration. In the UAE, a foreign company needs either a free zone or mainland entity or a third-party IOR with customs code and TRN registration. For Saudi Arabia IOR and UAE IOR, third-party providers are routinely used by technology companies, medical device distributors, and consumer goods companies entering Gulf markets without a local subsidiary.
China
China has the most rigid requirements for foreign companies entering the market without a local entity. A foreign company cannot import into China in its own name. Third-party IOR in China requires an IOR provider holding a WFOE, the GACC Customs Registration Code, CCC certification for regulated electronics, and VAT general taxpayer status. This is the only legal route for foreign companies shipping goods into China without establishing their own WFOE.
The Real Costs of the Two Approaches
| Factor | Set Up a Local Entity | Use a Third-Party IOR |
|---|---|---|
| Time to first shipment | 3-9 months for entity registration plus certifications | Days to weeks depending on product certification requirements |
| Upfront cost | USD 5,000-50,000+ for entity setup, legal fees, local directors, bank accounts | IOR service fee per shipment, typically a percentage of CIF or a flat fee |
| Ongoing fixed cost | Annual accounting, audit, company secretarial, local director fees regardless of volume | Pay per shipment. Zero cost in months with no shipments |
| Compliance liability | Company bears all customs compliance liability in that jurisdiction | IOR provider bears customs declaration liability. Company remains responsible for product accuracy |
| Market exit | Company liquidation process: 3-18 months, legal fees, tax clearance required | Stop placing orders. No dissolution required |
| Best suited for | Established market with committed volume, permanent distribution, or local operations | Market testing, occasional imports, new market entry before volume justifies entity, regulated markets where certifications require a local entity holder anyway |
What Most Companies Get Wrong When Trying to Import Into a New Country
The most common and most expensive mistake in international market entry is asking your freight forwarder to act as IOR. A freight forwarder moves cargo. In most jurisdictions, a freight forwarder without a locally registered entity and the required import credentials cannot legally act as IOR. When a forwarder attempts to act as IOR without standing, the customs declaration is filed incorrectly, duties may be unpaid, and liability for the entry falls on whoever CBP or the destination customs authority can identify. In some markets, goods are seized. See our guide to freight forwarder vs importer of record for why these are different roles with different legal standing.
The second mistake: assuming DDP means the seller handles everything automatically. DDP is an Incoterm that assigns the seller responsibility for delivering goods with all duties paid. DDP does not specify how the seller fulfils that obligation. A foreign seller on DDP terms who has no legal entity in the destination country and no IOR partner has taken on an obligation they cannot legally fulfil. The goods will reach the destination port with no compliant importing entity to clear them. The result is a port hold, escalating demurrage costs, and a delayed or failed delivery.
The third mistake: setting up an entity before confirming product certification requirements. A company that incorporates a German subsidiary before confirming CE marking compliance, WEEE registration, and German packaging EPR requirements has a legal entity but still cannot import until the certifications are in place. The entity and the certifications are separate tracks that run in parallel. An IOR provider manages both simultaneously, often faster than a foreign company can set up an entity independently.
The fourth mistake: wrong market entry timing. Companies that set up a full local entity to test a new market before confirming there is demand are over-invested in the infrastructure before the commercial case is proven. The IOR structure lets a company import into a new country without setting up a legal entity and sell product to real customers before committing to the fixed cost of a permanent local presence.
When to Use IOR and When to Set Up a Local Entity
Using a third-party IOR to enter a new market without a local entity is the right structure when:
- You are entering a new market for the first time and need to validate demand before committing to a permanent local structure
- Your import volume is too low to justify the fixed cost of a local entity
- You need to be operational immediately and cannot wait three to nine months for entity registration and certification
- You are importing a regulated product that requires certifications held by a local entity anyway, and the IOR provider already holds those certifications
- Your product may change or your market strategy may evolve and you need flexibility to exit without a dissolution process
- You sell on DDP terms globally and need a consistent, managed importing structure across multiple markets simultaneously
Transitioning from third-party IOR to your own local entity makes sense when:
- You have committed volume in the market that makes the fixed cost of a local entity commercially justified
- You need to employ local staff, sign local contracts, or establish a permanent commercial presence
- Your product requires intellectual property protection, local banking, or tax treaty benefits that only a local entity can access
- Your customers require a local contracting entity for procurement or compliance reasons
- You have validated the market through IOR and are now ready to convert to a permanent structure
Many companies use IOR as the first phase of international expansion and transition to a local entity once the market is proven. The two structures are complementary, not mutually exclusive. Starting with IOR does not prevent transitioning to a local entity once the market is proven. It simply avoids the three to nine months and the fixed cost investment before you know whether the market justifies it.
How to Start Importing Into a New Country This Week
- Step 1: Identify the destination country and your product’s HS code. The HS code determines the applicable duty rate, whether your product requires mandatory certifications, and which regulatory bodies the IOR must engage before clearance. Use the Carra Globe HS Code Finder for a starting point and verify the destination country’s full 10-digit tariff code and applicable rate in the official government tariff database
- Step 2: Confirm whether your product requires mandatory certifications in the destination market. Electronics in Japan require PSE. Telecom equipment in Malaysia requires SIRIM. Medical devices in Germany require CE marking and German registration. Food products in Saudi Arabia require SASO and SFDA. The IOR provider must hold or coordinate these certifications before the first shipment can clear customs. Confirm the certification status before booking freight, not after
- Step 3: Engage a specialist IOR provider with confirmed standing in the destination market. The IOR provider must hold a registered local entity, the required customs registration, relevant product certifications, and an established relationship with the destination customs authority. Request confirmation of the provider’s entity credentials and customs registration number before any cargo moves. Our IOR services cover 175+ countries with pre-verified entity credentials, customs registrations, and product certification management in each market. For a new market, we can confirm import capability, certification requirements, and first shipment timeline within 24 hours of receiving your product and country details
- Step 4: Structure your commercial terms as DDP with your destination country customer. Under DDP, you take responsibility for all import costs and the customer receives goods with duties paid and all compliance handled. This is the cleanest commercial structure for IOR-based importing because it keeps all customs compliance within your control, eliminates the risk of a consignee without import standing causing a clearance hold, and delivers a single total price to your customer. Use the Carra Globe Volumetric Weight Calculator when calculating your DDP freight cost for air shipments and confirm your full landed cost using the formula in our guide to how to calculate landed cost before quoting your DDP price
How Carra Globe Enables International Market Entry Without Local Entities
Carra Globe provides IOR services across 175+ countries through locally registered entities in each market with the customs registrations, product certification capabilities, and established customs authority relationships that every commercial import requires. Our IOR structure means a foreign company can import into Germany, India, Brazil, Japan, Saudi Arabia, China, Malaysia, or any of 175+ other markets without incorporating a local subsidiary, hiring a local director, opening a local bank account, or waiting for entity registration to complete. We hold the entity. We hold the customs registration. We coordinate the product certifications. We file the customs declaration and pay the duties. We release the goods to your customer or your local distributor. Our Delivered Duty Paid service wraps IOR, freight forwarding, customs clearance, duty payment, and last-mile delivery into a single end-to-end managed service with full landed cost visibility before any shipment moves. For the regulatory context of specific markets, see our country-specific IOR guides for USA, Germany, India, Brazil, China, Japan, Malaysia, Saudi Arabia, and UK.
Frequently Asked Questions: Import Into a New Country Without Setting Up a Legal Entity
Is it legal to import into a new country without setting up a legal entity using a third-party IOR?
Yes, completely legal. Every customs declaration requires a named Importer of Record. That IOR must be a legally registered entity in the destination country. That entity does not have to be your company. A specialist third-party IOR provider holds the required local entity and credentials and imports on your behalf as the legal IOR. This is the standard mechanism used by foreign companies entering new markets without subsidiaries across every major trading economy in the world.
Who is liable for import duties and compliance when using a third-party IOR?
The IOR named on the customs declaration bears legal liability for the accuracy of the entry, the correct duty payment, and the compliance of the goods with local regulations at the time of clearance. The foreign company remains responsible for the accuracy of the product information, HS code classification, and declared value it provides to the IOR. The risk allocation between the foreign company and the IOR provider is defined in the service agreement. A specialist IOR provider takes on the formal customs declaration liability in exchange for their service fee and the foreign company’s commitment to provide accurate product information.
Can my freight forwarder act as my IOR?
In most markets, no. A freight forwarder arranges the transport of goods. Acting as IOR requires a locally registered entity with customs registration credentials, the ability to hold product certifications in the destination market, and legal accountability for the customs declaration. Most freight forwarders do not hold these credentials and are not legally permitted to act as IOR in the destination country. Treating your freight forwarder as your IOR without confirming they have legal standing produces incorrect customs declarations and potential goods seizure.
How quickly can I import into a new country without setting up a legal entity?
For markets where the IOR provider already holds the required entity credentials and product certifications, a first shipment can be operational within days. For markets where new product certifications are required, the timeline matches the certification process: PSE in Japan takes 3-6 months for Type 1 products, BIS in India takes 3-6 months, INMETRO in Brazil takes 3-4 months. In all cases the IOR provider manages the certification process in parallel with any other market preparation, so the import readiness date is driven by certifications, not by entity setup.
Do I need a local entity to sell in a new country, or just to import?
These are separate questions with different answers. To import, you need a legally registered IOR in the destination country. That can be a third-party provider. To sell commercially in a new country on an ongoing basis, the legal requirements vary by market, product category, and business model. Some markets allow foreign companies to sell direct to customers without a local entity for limited volumes or specific product types. Others require a locally registered commercial entity for any ongoing commercial activity. Confirm the specific selling requirements for your product and target customer segment in each market separately from the import compliance question.
What is the difference between IOR and DDP?
IOR is the legal role: the entity named on the customs declaration responsible for import compliance. DDP is the commercial Incoterm: the agreement that the seller delivers goods to the buyer’s door with all duties paid. They work together. When a foreign company sells on DDP terms, they need an IOR in the destination country to fulfil the DDP obligation legally. A specialist IOR provider enables a foreign company to sell on DDP terms globally without setting up local entities in every destination market.