Brazilians often associate Chinese goods as cheap knock-off products. This article will outline the complete process of importing Chinese textiles and garments to Brazil.
The Brazilian textile industry is struggling with competition from China. According to ABIT (Brazilian Association of Textile Industry), the Brazilian garment sector loses upwards of BRL 2.5 Billion each year due to imports from China. They claim that protecting their industry could generate more than one hundred thousand additional jobs.
As Brazil is still a net exporter to China it is little likely that there will be any trading sanction to the Chinese textile and garment industry, so let’s have a look at how to import textiles and garments form China to Brazil.
1. Exporter in China
The exporter in China needs to have its basic paperwork in place before starting the process of exporting to Brazil. Assuming that the products are actually produced in China, the following documents must be provided:
- Temporary Textiles Export License of the People's Republic of China (中华人民共和国纺织品临时出口许可证)
- Textile Export License (输美纺织品出口许可证)
- Certificate of Origin (输美纺织品原产地证)
In order to manage the system of Textiles Export License, the Ministry of Commerce in China has authorized License Bureaus to manage and guide the license-issuing so that all export is done according to a code of conduct specified by the Chinese government.
2. Importer in Brazil
Before you can ship any product to Brazil, you will need to have a company in Brazil that is the legal importer of the textile or garment products and that has a license to do so.
All importers must be registered at the Foreign Trade Secretariat (SECEX) through a system named Sistema Integrado de Comércio Exterior (Siscomex). This system registers, monitors and controls international trades with Brazil. In order to get access to the Siscomex system, the Brazilian importer will need a RADAR license.
There is a variety of different types of RADAR licenses available and you can read more about this in our article Introduction to Radar. In 2009 there were 34.000 Brazilian companies that had obtained a Radar license and could import goods to Brazil.
3. Import Declaration to Brazil
Besides the standard Siscomex Import License, the importer in Brazil will also need to have an Import Declaration. Textile or garment products are on the non-automatic list, meaning that the Import Declaration will have to be manually approved ahead of importation from China to Brazil.
Important: Do not organize payment for the products with foreign money directly to the foreign exporter.
All payments for imports must be made through an exchange agreement. The importer will have to go to a Brazilian bank authorized by Banco Central (Brazilian Central Bank) in order to issue a remittance to the Chinese exporter.
With the remittance in hand, the Chinese exporter should issue a commercial invoice and an export order.
5. Packing of Goods
The following documents must be prepared in either English or Portuguese:
- Airway Bill / Bill of Lading / Truck Bill of Lading
- Packing List
- Certificate of Origin
- Copy of the Import Declaration
When transporting goods in wooden boxes, a Fumigation Certificate or Heat Treatment Certificate will be required, notarized by the Brazilian Consulate in China.
The invoice and packing list need to be two different documents. The invoice must include:
- Invoice number
- Place and Date of Dispatch
- Quantity shipped
- Full description of all items including brand, serial and part number
- Unit price: Every individual item in U.S. Dollars
- Total price
- Harmonized System code for each invoiced item
- Gross & Net Weight
- Total FOB Value
- Total Freight Charge
- Total Value
When completing the documents, be as specific as possible, do not declare freight “as agreed” or similar terms as Brazilian customs will not accept such information.
The invoice and packing list must be issued on company letter headed paper, stamped and signed. Copies are not acceptable even with original signature.
6. Customs Clearance in Brazil
Before the goods arrive in Brazil, the importer will now have to pay the liable taxes to “Receita Federal”, including Import Duty, IPI, PIS, COFINS e ICMS.
With the confirmation of payment to “Receita Federal” in hands and all the other documents that you collected during the process, your will get the textile or garment goods released from custom.
Taxation and Classification
Just like in the HS classification system, textile and garment are categorized under chapter 58 to 63 in the NCM (Mercosur Common Nomenclature) system.
Generally speaking, the following tax rates will apply when importing textile or garments from China to the state of São Paulo in Brazil:
- Import Duty: 26% - 35%
- IPI: 0%
- ICMS: 18%
- PIS: 1.65%
- COFINS: 7.60%
For more details about tax rates and classifications according the NCM system, please have a look at our Tax Database.
Other Related Content
- Introduction to Radar
- Getting a Siscomex License
- Temporary Import of Goods to Brazil
- Protectionism in Brazil
- The 10 Major Brazilian banks
- The 16 Most Common Brazilian Taxes
- Brazilian Employment Law in a Nutshell
- Cargo Transportation Costs in Brazil