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Tips for International Trade with South America

Exporting to South America is big business. In January 2013, U.S. exports to Brazil, Colombia and Venezuela totaled $3 billion, $1.6 billion and $1.4 billion, respectively.[1]

Here are tips for small businesses that want to sell their export products in these emerging markets.

Warn Customers of Local Duties and Taxes

One thing Punit Shah, director of marketing and ecommerce at My Trio Rings, recommends to export business owners is advising foreign customers in South America - and anywhere else in the world - that they will also have to pay their country's local duties and taxes. In some cases that duty can be 40 percent or more of the value of the export product. My Trio Rings is located in New York and sells unique diamond and gold wedding and engagement rings. Many of its sales are to South America and the Caribbean.  

“Especially if you are shipping to a middle man in that country, you want to ensure they are trustworthy and won’t divert your goods to a prohibited end-user or embargoed country.”

— Andrea Appell, director at the trade compliance consulting firm BPE Global

"I use a service called DutyCalculator.com to estimate the duties for our 10 most common shipping destinations," Shah says, and he recommends that foreign customers use the site to estimate what duties they may have to pay.

Without the service, Shah says, it would take "countless resources to trove through the documentation for each country and determine applicable duties and taxes."

Business owners should also monitor South American currency exchange rates, which may impact final costs when paying duties and taxes abroad. Since each country has its own currency, in April 2013 $10,000 U.S. dollars (USD) would have bought about $51,151 Argentine pesos (ARS), but only R$19,564 Brazilian reals (BRL).

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Determine If a Product is Restricted

Every country in South America has different rules and regulations about what can and can't be imported, but some items are more difficult to export than others, says Shawn Fanshier, Americas Region vice president of brokerage and customs trade at UPS.

Certain items, like pharmaceuticals or food, may also require proof they meet local health and safety standards. Fanshier says the U.S. government's export site has lots of information about country-specific international shipping regulations.

Know the Customer

Anyone doing business in Latin America should know who will be buying their export product and how it's being used, advises Andrea Appell, director at the trade compliance consulting firm BPE Global in San Francisco. "For example, if a small baker in Argentina places an order for a large number of routers, that end-user doesn't make sense for your product, and the transaction should raise a red flag," she says. "Especially if you are shipping to a middle man in that country, you want to ensure they are trustworthy and won't divert your goods to a prohibited end-user or embargoed country."

Along with getting acquainted with foreign customers, export business owners can benefit from the services of a trusted online foreign exchange provider. With email market-rate alerts, it's easy to capture preferred foreign exchange rates when initiating a money transfer to Brazil and most of South America.


[1] Foreign Trade, United States Census Bureau, U.S. Department of Commerce



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