Selling to companies or end users along the border

A book publisher received a purchase order from the gift shop from the Rosarito Hotel. The book publisher's CEO packed a half dozen books into the back of his car, drove to Rosarito Beach, and tried to collect on the first installment.

He risked loosing his car, a stiff fine, and no payment.

When at last he made contact with the SBD-ITC (Small Business Development & International Trade Center) we took him through the ropes and opened a successful export business.

The very first thing we did was to create an official invoice for the books, then drove to the border, elected the right lane where you declare your cargo and took the invoice to the customs inspector who is there for exactly that purpose. On reviewing the documents, he looked up the tariff, and wrote down the amount on a government form which we then presented to the bank clerk right there in the government office, who took our dollars, changed them into pesos, signed and sealed the document and handed it back to us.

We turned, walked the three steps back to the customs official, handed him our paperwork and he wished us good luck and happy hunting.

On the way out of the parking area we were asked to push the button on a red/green light apparatus which we did. And got a red light!

The Mexican customs agent politely asked us to pull off into a parking zone and to open the trunk. We did, he checked our paperwork against the box of books, nodded, said thank you, have a nice stay in Mexico.

The buyer had been forewarned that we would not have an official Mexican invoice... which require an official RFC and sequence of numbers... and so they had a check made out on a U.S. Bank which we would easily deposit on return to the U.S.

Words to the wise:

Not long ago a marine corps corporal was on his way to pick up some stragglers at the border crossing. Innocently he went beyond the last exit and was into Mexico before he realized it. The weight of his van triggered the red light and he was motioned into secondary inspection where he declared he had some guns.

Before he knew what had happened he was cuffed and hauled off to jail, then to the local penitenciary where he would have remained for up to 15 years had it not been for the political whoopla stirred up by Rodger Hedgecock, a famous radio talks-show host, in San Diego.

The caveat, is to know what you can and can't take into Mexico. Guns are illegal. Most other things are legal and can be exported upon payment of the right duty.

The days of simply handing the guard a few dollar bills are over. It is much safer, wiser and smarter to have an invoice for whatever you are bringing into Mexico, paying the fees, and continue worry-free.

If in doubt, simply leave your car in the parking lot, go into Mexico, look for the first customs house broker right there at the crossing and ask. If the customs broker is not there, ask a Mexican official who will direct you to the right 'window' or desk.

Once a business relationship has been established, your method of transporting and invoicing will be simplified. You crate your product, albeit it in Spanish with Metric weights and measures, include the invoice and packing slip and get it to your customs broker who will then handle all the legal necessities. Your customer should make arrangements with the broker to pay your invoice on receipt of the goods if it's a COD transaction. Otherwise it will be invoiced and paid according to whatever terms you have worked out.

Regarding the RFC mentioned earlier:

The RFC is Registro Federal de Comercio, which is the same thing as your IRS business number. Mexican businesses must purchase their invoice forms from authorized government printing offices and must account for every number in the sequence by year's end.

If you do not issue an invoice with a legal RFC, the Mexican customer cannot pay on it and declare it as an expense! Thus, you must make arrangements with your Mexican customer to have their accounting department open a U.S. bank account among other things if they are to import from the U.S.  These are minor technicalities but must be handled or you end up not getting paid.

An example:

A Mexican Institute still owes the writer over a thousand dollars which they would like to pay, but can't, because the writer could not provide them with a legal invoice.

One last item on local sales: When you go into Mexico as a tourist you cannot conduct business, although most people do. If you are to visit a local company they will not let you in unless you have a visitor's permit or FM3, the equivalent of a 'Green card'.

You get one easy enough. Just stop at the border crossing and show them your passport, write down the name and address of the business you will be visiting, and they will give you a 30 day permit. No cost. You MUST return the visitor's pass on your way back from your visit. Your name is forever written into their books and if you try for another visitor's permit or FM3 later on, they will not issue it to you because of your prior failure to comply with their laws.

You can also get the permits from a local Mexican Consulate. There's one in downtown San Diego.

Return to Home Page