JoshIn an increasingly globalized economy, it’s not uncommon for people to broaden their horizons beyond the borders of the US when it comes to buying goods. The advantages are numerous: there’s much more choice when all the nations of the world are taken into account, and the price of the item itself can often be lower if it’s been produced in a location with low manufacturing costs.
However, whether you’re a business customer buying supplies or you’re a personal customer looking for a gift, apparel or something else altogether, there are also downsides involved. The cost of changing cash over to a foreign currency can be large, and there can be rules and regulations to follow. Whether you’re buying on the ground in a foreign destination or you’re ordering from the comfort of your own home here in the US, here are some top tips to follow when looking to save money on international spending.
Import laws
The first headache that an international purchaser will have to contend with lies in the import and export laws that the country levies. As an American buying abroad, there are certain restrictions on what you can either bring back into the country with you when your trip is over or on what you can order in from a foreign supplier. While it may be tempting to simply take the risk, it’s not worth it: anyone or any shipment can get stopped and searched, and it happens more often than you might think.
The laws are designed to be comprehensive, and they can refer to all sorts of products. One example of a large purchase that you may import for either business or personal reasons is an automobile. If you do, then you’ll have to ensure that the car in question satisfies the safety and anti-burglary requirements laid out by the Department of Transportation as well as the emissions standards of the US Environmental Protection Agency. Laws can also vary from state to state – especially in terms of alcohol. Some states require you to have a license to bring in alcohol, while others have a maximum amount.
Forms and papers
One piece of good news, however, is that you don’t generally need to get a license in order to import products. Only those in certain fields have to go through this particular bureaucratic hurdle. However, all business importers have 15 calendar days to fill out what’s known as a CBP form in order to bring in their purchased items.
This timeframe begins on the day that your purchased items arrive at a US port of entry. Remember, this doesn’t just refer to actual sea-based ports but also to road points and airports. You’ll need to give what’s known as your importer number on this form, and this is usually the same as your IRS business registration number.
Currency fees
While import laws and customs controls can perhaps be the most challenging aspect of making a purchase abroad, the most pressing financial challenge is often turning your US dollars into cash that you can spend in a certain country. You’ll usually need to pay a fee for this privilege. By looking online for the best international money transfer rates, though, you can generally find an affordable rate.
An aspect of currency exchange that is harder to plan for, however, is the exchange rate. To some extent, this is out of your control. If the dollar has a lower value compared to the currency in the country in which you plan to make the purchase and you don’t have time to wait, then you’ll probably have to deal with the unfavorable rate and simply pay more in dollars in order to get your item. You could, however, be strategic about it. If you don’t need to make the purchase for another few months, then you could take a risk and see if the foreign exchange market realigns in your favor further down the line.
Spending money on a large purchase abroad is often necessary, especially if the item is available cheaply there or is not available in the US at all. However, there are plenty of pitfalls to contend with: from unfavorable exchange rates to import laws, you’ll have a lot to consider. Using the web to do your research is a good way to mitigate these problems and ensure that your purchase occurs cheaply and smoothly.