If you’re importing goods into Canada, you’ve probably come across the terms Importer of Record (IOR) and Delivered Duty Paid (DDP) in the commercial import process. But what do they actually mean, and which one is the better choice for your business?
Let’s break it down in simple terms so you can make an informed decision about your import process.
What is Importer of Record (IOR)?
When you choose to be the Importer of Record (IOR), you’re taking full responsibility for your shipment. That means your business name appears on all the import and brokerage paperwork, and you’re the one accountable for ensuring the shipment meets Canadian regulations.
What You Need to Import as an IOR
To bring goods into Canada under the IOR model, you’ll need:
- A Canadian Business Number (CBN) with a Non-Resident Importer (NRI) designation.
- To complete a two-step registration process:
- First, you apply for a CBN with the Canada Revenue Agency (CRA).
- Once approved, you apply for an NRI designation with the Canada Border Services Agency (CBSA).
- A brokerage account with a customs broker to handle clearance at the border. (Most major brokerage firms offer this service, and we can recommend a few great ones!)
Why Businesses Choose IOR for Commercial Imports
- Full control – Your business oversees the entire import process.
- Tax benefits – You can recover the 5% import tax paid on your goods.
- Stronger market presence – Having your name on the import docs gives you more credibility in Canada.
The IOR method makes sense for businesses that want long-term control over their Canadian imports and tax recovery. But it does require more paperwork and responsibility—so it’s not for everyone.
What is Delivered Duty Paid (DDP)?
If you’ve ever had a shipment sent “Delivered Duty Paid (DDP),” it means the shipper takes care of everything—customs, duties, taxes, and all the paperwork.
In most cases, DDP for commercial imports is mainly available from China, where shipping companies act as the IOR on behalf of the importer.
How DDP Works for Commercial Imports
- The shipper uses their own CBN/NRI and declares themselves as the IOR.
- They handle customs clearance and duty payments, so you don’t have to.
- Since the shipper is the official importer, your business doesn’t need to worry about tax recovery or compliance.
Things to Consider Before Using DDP
- Limited availability – Most DDP services are offered by Chinese shipping companies.
- Less control – Since the shipper is the IOR, you don’t have much say in the import process.
- Compliance risks – If the shipper doesn’t follow Canadian import regulations, you could still face issues.DDP is often the simpler choice for businesses that don’t want to deal with Canadian import regulations. But it also means giving up control and tax recovery benefits.
IOR vs. DDP: Which One Should You Choose?
The best commercial import method depends on your priorities. Here’s a quick comparison to help you decide:
| Factor | IOR (Importer of Record) | DDP (Delivered Duty Paid) |
| Control | Full control over the import process | Limited control; shipper handles import |
| Tax Recovery | Eligible for 5% import tax recovery | No tax recovery for the importer |
| Customs Compliance | Business is responsible for compliance | Shipper assumes compliance responsibility |
| Availability | Available from any country | Mostly offered by Chinese shippers |
| Risk | Higher responsibility, but better oversight | Less responsibility, but potential compliance risks |
- If you want full control, tax recovery, and long-term benefits, go with IOR.
- If you prefer a hands-off approach with fewer upfront responsibilities, DDP might be the better option.
Final Thoughts on Commercial Import Options
Whether you go with IOR or DDP, the key is understanding what works best for your business. If you want to build a strong presence in Canada and maximize tax benefits, then IOR is the way to go. But if you’re looking for convenience and a simpler import process, then DDP could be a good fit.
Still not sure which import method is best for you?
Let’s talk! We’re here to help you navigate your Canadian import process and make it as smooth as possible.
