By Eric Huang    Photo：CANVA

1. The Email That Keeps Taiwanese Business Owners Up at Night

It is 4 p.m. on a Friday. The sales manager at a Taiwanese industrial connector brand in Taoyuan has just received a reply from a U.S. distributor. The tone is polite, but the message is clear: starting with the next order, the terms will be DDP, and the distributor will no longer serve as Importer of Record. In plain English: deliver the goods to our warehouse, pay the duties, handle the customs entry, and deal with U.S. Customs if anything goes wrong. We will simply receive the shipment. The Taiwanese company has no U.S. subsidiary, no U.S. legal entity, no employees in the country, and not even a U.S. address. The sales manager forwards the email to the owner. The reply is three words: "What now?"

We have seen this situation repeatedly in recent years. Taiwanese machine-tool component suppliers, Chinese consumer-electronics brands, Vietnamese furniture manufacturers, Malaysian rubber-products producers: more and more Asian companies already have steady U.S. customers and ship anywhere from a few loads to dozens of shipments a year, yet still get stuck on one question: who will act as the U.S. importer? In the past, many U.S. buyers were willing to serve as IOR while overseas suppliers quoted FOB or CIF and moved on. With U.S. tariffs shifting rapidly and compliance exposure increasing, more buyers are pushing the IOR responsibility back toward their suppliers.

This article looks at the IOR question from the perspective of an international logistics practitioner: what an IOR actually is, why U.S. buyers are increasingly reluctant to take the role, what options an overseas company has without a U.S. entity, what each option requires, and where companies tend to run into trouble. We will also walk through a real case study, with the company name withheld, to show what the process looks like in practice. If your company has U.S. customers, no U.S. entity, and is being asked to quote DDP, this guide is written for you.

2. What Is an IOR? It Is a Legal Responsibility, Not Just a Title

The Importer of Record, or IOR, is the party U.S. Customs and Border Protection (CBP) holds legally responsible for an import. That party may be an individual or a legal entity, and it may be a U.S. company or a foreign company. What matters is the responsibility, not the label.

The IOR is responsible for making sure the goods may legally enter the United States, declaring the correct HTS classification, customs value, and country of origin, paying applicable duties and fees, complying with other federal agencies such as the FDA, FCC, USDA, and EPA, keeping required import records for at least five years, and responding to CBP audits. If something is wrong, penalties, seizures, additional duties, and, in serious cases, criminal exposure can fall on the IOR.

Many Asian sellers initially confuse the IOR with the consignee or the customs broker. They are not the same. The consignee is the party receiving the goods. The customs broker is the licensed professional that files entries with CBP on the IOR's behalf. The IOR is the party legally accountable for the import. A broker can prepare filings and communicate with CBP, but the broker does not assume the IOR's underlying liability. When CBP looks for the party responsible for the entry, the IOR is at the center of that inquiry.

That is why "who will be the IOR?" has become a commercial negotiating point. Under EXW, FOB, CIF, or CFR, import clearance is usually handled by the buyer, and the U.S. buyer often acts as IOR. Once the terms move to DDP (Delivered Duty Paid), the seller takes responsibility for delivering to the named place and handling import clearance and duties, so the IOR question usually shifts to the seller's side as well. DDP does not automatically make the seller the IOR as a matter of U.S. customs law, but in practice the parties almost always need to settle the IOR arrangement before the goods move.

There is another concept many first-time Asian importers have never had to think about: Reasonable Care. U.S. law requires the IOR to exercise reasonable care over its declarations. "I didn't know," "the broker told us to file it that way," or "the customer gave us the information" does not simply transfer the responsibility elsewhere. CBP may look at whether the company checked its classification, retained composition and origin records, sought professional advice where appropriate, and maintained an internal review process. The standard is manageable, but companies that have never operated as an IOR often discover these expectations only after CBP starts asking questions.

3. Why Are U.S. Buyers Less Willing to Act as IOR?

Ten years ago, it was common for a U.S. buyer to act as IOR without much discussion. That has changed quickly, for three practical reasons.

First, tariff risk has expanded dramatically. Since 2025, the U.S. tariff framework has changed almost quarter by quarter. Reciprocal tariffs were first imposed under IEEPA. On February 20, 2026, the Supreme Court ruled 6-3 that IEEPA did not authorize those tariffs. The White House then moved to a 10% global surcharge under Section 122 on February 24. When that measure reached its 150-day limit, USTR's Section 301 forced-labor actions took effect on July 24, adding duties of 10% or 12.5% across 60 economies. For an IOR, forecasting duty exposure became much harder. Many U.S. buyers would rather negotiate a DDP price and shift that volatility back to the supplier.

Second, compliance exposure has increased. CBP continues to scrutinize customs value, origin, and HTS classification, while enforcement around forced labor under UFLPA, anti-dumping and countervailing duties (AD/CVD), and evasion through transshipment has become more important. U.S. buyers understand that acting as IOR means standing behind the import declaration. If origin records are weak or the declared value is understated, the consequences can fall on them. Some U.S. legal teams have responded by declining to act as IOR for overseas suppliers altogether.

Third, the de minimis landscape has changed. Low-value parcels under US$800 previously relied on Section 321 de minimis treatment to enter the United States duty-free, and many Asian brands built B2C channels around that model. The United States suspended de minimis treatment for China- and Hong Kong-origin goods on May 2, 2025, and extended the suspension globally on August 29, 2025. The OBBBA enacted in July 2025 also permanently repeals the commercial-shipment exception under Section 321 effective July 1, 2027. Low-value commercial goods can therefore no longer rely on the US$800 threshold alone for the former duty-free simplified treatment. Non-postal shipments must use the appropriate ACE entry type and pay applicable duties and fees, while postal shipments are handled under separate rules. Sellers that once used low-value parcel channels to avoid building a conventional U.S. import structure now have to revisit their IOR and clearance setup.

The buyer's logic is not hard to understand: they do not want to guess where tariffs will be when the goods arrive, and they do not want to carry compliance risk for someone else's supply chain. For overseas suppliers, that creates pressure. It also creates an opening. A supplier that can manage DDP reliably, price landed cost accurately, and keep customs clearance under control can become much easier for a U.S. customer to work with over the long term.

4. No U.S. Company: What Options Does an Overseas Business Have?

An overseas company that is asked to take responsibility for the U.S. import without having a U.S. entity generally has three practical routes. Each comes with a different mix of cost, control, and compliance responsibility.

The first is to establish a U.S. subsidiary. Form an LLC or corporation, obtain an EIN, and use the U.S. entity as the IOR. The advantages are clear ownership of the import structure, a more complete U.S. tax and operating setup, and greater flexibility if the company later holds inventory, distributes to multiple customers, or invoices locally. The trade-off is time and overhead: incorporation, banking, accounting, annual filings, and federal and state tax obligations. For a business making only a few U.S. shipments a year, that may be more infrastructure than it needs.

The second is to register the foreign company directly as a Non-Resident Importer, often referred to in the trade as a Foreign Importer of Record. U.S. customs rules do not require every IOR to be a U.S. company. A foreign business may obtain a CBP-assigned importer number through Form 5106, then arrange the required customs bond and appoint a U.S. customs broker so it can import in its own name without first forming a U.S. subsidiary. A non-U.S. corporation also needs a resident agent in the relevant state who can accept service of process; in practice, a customs broker holding a valid POA may help arrange this. The advantage is that the importing entity remains your own company. The trade-off is that the compliance and duty exposure also remains yours, and the Ultimate Consignee and U.S. receiving arrangement still need to be established in advance, commonly through a 3PL or the customer.

The third is to use an IOR service provider. These companies act as IOR through their own U.S. entity and charge a service fee. The attraction is convenience: you do not have to build the IOR structure yourself. The trade-offs are cost, usually charged per shipment or as a percentage of cargo value, less direct control over the import process, and dependence on the provider's own compliance record. A weak provider can create problems for your shipment rather than solve them.

How should you choose? Shipment frequency and the company's U.S. market strategy are still useful starting points. A business moving only one or two low-value shipments a year, with uncertain future volume, may first compare an IOR service provider with a single transaction bond. For companies with steady volume and long-term U.S. plans, a Non-Resident Importer structure paired with a continuous bond used to be a common path. Companies already holding U.S. inventory, serving multiple customers, or reaching meaningful scale should seriously evaluate a U.S. subsidiary. But Executive Order 14411, signed in June 2026, directs CBP to tighten the rules governing Foreign IOR formal entries and bond use. That means companies can no longer choose a continuous-bond structure simply by counting annual shipments. The same three routes remain relevant, but the decision now requires a broader look at current entry rules, bond eligibility, cost, and control.

5. Registering as a Non-Resident Importer: What Needs to Be in Place?

The Non-Resident Importer route has long been used by many Asian brands. In 2026, the basic building blocks still exist, but Foreign IOR eligibility, bonding, and identity-verification requirements are tightening. These are the key pieces to review together.

Step one is obtaining an importer number. Companies with a U.S. tax presence generally use an EIN. A foreign company without a U.S. EIN may apply for a CBP-assigned importer number through Form 5106, the Create/Update Importer Identity Form. In practice, an authorized U.S. customs broker often submits the form through the relevant ABI/ACE process, although a company may also submit it to the appropriate CBP Center under CBP procedures. A broker or surety may separately request corporate registration documents, signing-authority evidence, identity documents, or other KYC material depending on the case. One point now deserves particular attention: an importer number is not something a company can obtain and then ignore indefinitely. In August 2026, CBP issued an enforcement notice focused on the accuracy of Form 5106 data. Incomplete or inaccurate information can result in an IOR number being voided. Changes to the company's legal name, physical address, telephone number, email address, EIN, or other importer-identification data therefore need to be updated promptly. Processing time still varies with the broker, the CBP Center, the completeness of the filing, and any verification required, so the practical advice remains the same: start before the cargo is already on the water.

Step two is arranging a customs bond. The bond is a financial guarantee supporting the IOR's duty, tax, fee, and other customs obligations. Commercial merchandise generally encounters a bond requirement when its value exceeds US$2,500 and a formal entry is required, although certain products regulated by other government agencies may face different formal-entry or bond requirements even at lower values. The two common structures are a Single Transaction Bond and a Continuous Bond. A single transaction bond is generally based at least on entered value plus applicable duties, taxes, and fees. For certain goods subject to other-agency requirements, where failure to redeliver could affect public health or safety, the bond amount may be increased to three times the entered value. A Continuous Bond is generally calculated at 10% of the duties, taxes, and fees paid or projected over a 12-month period, with a minimum of US$50,000. Executive Order 14411, however, directs CBP to change the rules for Foreign IORs so that formal entries generally may not rely on a continuous bond unless CBP determines that revenue and compliance are adequately protected and approves an exception. The old rule of thumb that "more than five shipments a year almost always makes a continuous bond cheaper" therefore no longer answers the question by itself. Companies now need to confirm the Foreign IOR rules in effect at the time before comparing bond costs. Actual premiums will still depend on the bond amount, cargo profile, and underwriting terms offered by the broker or surety.

Step three is executing a customs Power of Attorney (POA), using CBP Form 5291 or an equivalent document, in favor of the U.S. customs broker. A broker must have a valid POA directly from the IOR before conducting customs business on its behalf. For a foreign corporation, the POA also needs to address authority for an agent to accept service of process, and the company must be able to show that the person signing has authority to bind the company. Whether notarization, additional corporate documents, or multiple signatures are requested in practice can depend on the company's legal form and on the broker's or surety's KYC procedures. It is not a universal rule that every foreign company must have two authorized officers sign. Without a valid POA, the broker cannot lawfully conduct the relevant customs business for the IOR.

Step four is confirming the U.S. Ultimate Consignee and receiving arrangement. In practice, a Non-Resident Importer still needs a workable U.S. destination and the corresponding address and identification information. That may be a 3PL warehouse, an FBA fulfillment setup, or the customer itself. But naming an Ultimate Consignee does not automatically transfer the IOR's five-year recordkeeping obligation. The IOR must still maintain its own compliance records.

Step five is building a compliance file. The IOR is required to retain import records for five years, including commercial invoices, packing lists, bills of lading, entry documents, certificates of origin, payment records, and correspondence with the customs broker. If CBP later asks for those records, the company needs to be able to produce them.

A word about customs brokers. U.S. brokers are licensed professionals, but their approach and product knowledge vary. Some primarily process the data they receive; others actively review classification, valuation, and origin before filing. For a foreign company acting as IOR for the first time, a strong combination is a forwarder that understands the Asian export side and a U.S. broker that understands the product category. The forwarder can help keep shipment data and documentation consistent before departure, while the broker manages the import filing and CBP communication. When both sides work from the same information set, errors are less likely. In this business, the cheapest broker is not necessarily the best broker. Saving a small amount on brokerage is rarely worth the cost of a classification or valuation error later.

There is also an important policy shift to watch. On March 5, 2026, the U.S. Senate introduced the Securing Accountability in Foreign Entries Act, or SAFE Act (S.4003). The proposal goes beyond requiring a Non-Resident Importer to provide a U.S. address, phone number, and agent. It would require a more substantive U.S. connection, including a physical U.S. presence and specified owner or full-time employee conditions, and would raise the proposed minimum continuous import bond to US$100,000. As of this update, S.4003 remains a bill and has not become law. The more immediate change is Executive Order 14411, Strengthening Customs Enforcement, signed on June 3, 2026. The order directs DHS and CBP to tighten IOR eligibility, bonding, good-standing, and vetting requirements; prohibit Foreign IORs from using informal entry; and, for formal entry, generally prevent Foreign IORs from relying on a continuous bond unless CBP approves an exception. It also introduces CTPAT-related requirements, including use of a CTPAT-validated licensed customs broker in certain circumstances. On August 19, CBP followed with a Form 5106 data-accuracy notice, beginning implementation through importer-identity verification. By September 2026, it is no longer accurate to say that the Foreign IOR framework is unchanged. The route still exists, but companies need to confirm which CBP implementation rules are in force before shipping.

6. Why the 2025-2026 U.S. Tariff Environment Makes the IOR Question More Important

The IOR's responsibilities were not created by the tariff changes of 2025 and 2026. What changed was the amount of money attached to those responsibilities. Landed-cost calculation went from a routine pricing exercise to a much more consequential part of import planning.

Start with the timeline. In the first half of 2025, IEEPA reciprocal tariffs began with a 10% baseline, while the country-specific rates announced in April reached as high as 50%. Vietnam was listed at 46%, Cambodia at 49%, Laos at 48%, and Lesotho at 50%. Most of the higher country-specific rates were subsequently paused, leaving the 10% baseline in place for many economies. China, amid subsequent retaliation and adjustments, briefly reached 145%. On February 20, 2026, the Supreme Court ruled that IEEPA did not authorize these tariffs. Collection of the relevant IEEPA tariffs stopped on February 24, when a 10% global surcharge under Section 122 took effect. On May 7, the Court of International Trade ruled that the Section 122 surcharge exceeded presidential authority, but at that stage the relief applied only to the three plaintiffs before the court, while other importers continued paying under the existing framework. On July 24, the 150-day Section 122 period expired, and USTR's Section 301 forced-labor tariffs covering 60 economies took over. In roughly eighteen months, the legal basis for the additional duty on an import changed three times.

The structure in effect from July 24 also creates very different outcomes across Asian sourcing markets. Taiwan and the European Union receive a combined-rate ceiling of 10%: where the MFN rate is below 10%, the Section 301 duty brings the total to 10%; where the MFN rate is already 10% or higher, the additional Section 301 duty is zero. Japan, South Korea, and Switzerland have a 12.5% ceiling. Seventeen economies, including Malaysia, Indonesia, Cambodia, and India, are subject to an additional 10% on top of MFN. Thirty-eight economies, including China, Vietnam, Thailand, the Philippines, Singapore, and Hong Kong, are subject to an additional 12.5%, while China also remains subject to its pre-existing Section 301 duties. The same product can therefore carry a landed-cost difference of more than ten percentage points depending on whether it ships from Taiwan, Vietnam, or China.

Why does that matter to the IOR? Because when you are the IOR, tariff changes flow directly into your cost base. Under DDP, the rate used when the sales team quotes the customer may not be the rate in force when the goods arrive. During the February and July 2026 transitions, we saw Asian suppliers face exactly that problem: absorb the difference or reopen the commercial discussion with the customer. In this environment, a DDP contract without a tariff-adjustment clause is effectively a bet on what Washington does next.

There is another point many companies overlook: duty refunds. After the IEEPA tariffs were invalidated, the Court of International Trade ordered on March 4, 2026, that relevant entries not yet liquidated be liquidated without the IEEPA duties, and that entries already liquidated but not yet final be handled through reliquidation under the court's order. CBP then launched CAPE, the Consolidated Administration and Processing of Entries process, in ACE on April 20 to centralize IEEPA duty refunds and interest. But it is not as simple as saying that everyone who paid can file the same claim. The process depends on the entry's liquidation status, the entry types CAPE can process at that stage, and CBP's applicable procedures. Who ultimately receives the money also comes back to the IOR shown on the entry and the refund-payment arrangement on file with CBP. If a U.S. customer or third-party IOR service was the IOR at the time, the overseas supplier should not assume the refund will automatically come back to it. Refund rights and allocation are better addressed in the commercial agreement in advance. The IOR sits on the front line of both the risk and the economic rights attached to the entry, something worth considering before agreeing to DDP terms.

7. Case Study: Six Hurdles as a Taiwanese Brand Moves from FOB to DDP

A real case, with the company name withheld, helps connect the pieces. Company C is a Taiwanese brand producing precision hardware and industrial components. It began serving U.S. distributors on a steady basis in 2022, growing from six 20-foot containers a year to around thirty by 2025. Its path to becoming an IOR was not smooth, but each problem eventually became part of its operating procedure.

The first hurdle came in spring 2024. Company C's largest U.S. distributor said the next order would be DDP and that it would no longer act as IOR. Company C asked the customer to introduce its existing customs broker and shipped with a "get the goods in first and sort out the details later" mindset. The first shipment ran into trouble. The broker reused the U.S. customer's previous HTS classification, but Company C's product specifications actually fell under a different tariff line with a four-percentage-point difference in duty. The customs value was also declared using Company C's DDP sales price, which already included freight and duty, effectively causing duty to be calculated on amounts that should have been separated out. The shipment overpaid more than US$10,000 in duty and triggered a CBP notice over an inaccurate declaration. The lesson was straightforward: using someone else's broker does not give you someone else's compliance discipline.

The second hurdle was choosing the IOR structure. In the second half of 2024, Company C used a trading company owned by a U.S. acquaintance as IOR under an informal arrangement to put that company's name on the entries. When the IEEPA reciprocal tariffs took effect in April 2025, the expected duty on one shipment jumped from roughly 8% to more than 30%. The owner of the U.S. company reassessed the exposure and withdrew while the cargo was already on the water. Company C had to bring in an IOR service provider on short notice, at a fee equal to 3% of cargo value, leaving almost no margin on that shipment. The lesson was equally clear: if your IOR arrangement depends on someone else's willingness to keep lending you their name, they can withdraw that support at the worst possible time.

The third hurdle was the suspension of de minimis treatment. Company C had a small B2C business alongside its distributor sales and had been shipping low-value parcels directly to U.S. consumers under the US$800 threshold. After global de minimis duty-free treatment was suspended on August 29, 2025, those shipments were no longer automatically duty-free simply because they were below US$800. Non-postal shipments had to move through the appropriate ACE entry type and pay applicable duties and fees. The added filing and duty cost made the parcel model far less competitive. Company C spent two months shifting the B2C business to a model based on full-container imports into a U.S. 3PL, followed by domestic fulfillment. Duties were paid at import, and delivery time fell from roughly two weeks to three days. What began as a compliance problem became a turning point in the company's U.S. distribution model.

The fourth hurdle was formal registration as a Non-Resident Importer. In September 2025, Company C decided to stop relying on third parties and act as its own IOR. With support from its forwarder and U.S. customs broker, it applied for a CAIN through Form 5106, obtained a US$50,000 continuous bond, executed a notarized POA, and named its U.S. 3PL as Ultimate Consignee. The process took five weeks. From then on, Company C reviewed the HTS classification, customs value, and origin for each shipment before filing, while the broker handled the actual customs submission.

The fifth hurdle was the tariff transition in 2026. IEEPA gave way to Section 122 on February 24, and Section 122 gave way to Section 301 on July 24. Both times, Company C found itself quoting one tariff environment and importing under another. The first time, it absorbed the difference. The second time, it added a tariff-adjustment clause to its DDP contracts: the applicable rate would be the U.S. customs rate in effect on the shipment date, with any amount above the quoted baseline shared equally between buyer and seller. Customers pushed back at first, but accepted the clause once the mechanism was clearly explained. One important detail: Company C did not become IOR in its own name until September 2025. Any IEEPA refund it could handle in its own IOR capacity therefore relates only to qualifying entries made after that point. Earlier shipments handled under a third-party IOR depend on the entry record and the commercial arrangement in place at the time.

The sixth hurdle was digitizing landed-cost management. In the first half of 2026, Company C worked with its logistics provider to build a simple landed-cost model. Enter the HTS code, origin, cargo value, freight, insurance, bond cost, brokerage, warehousing, and last-mile delivery, and the model calculates landed cost by SKU at the quotation stage while identifying the tariff basis in force and its effective date. That gave the sales team a defensible DDP number on the same day instead of relying on a rough estimate. Customers responded well to the transparency, and several distributors moved additional product lines to Company C.

8. Five Practical Takeaways for Asian Brands

Company C's experience, together with cases we have seen over the past few years, can be reduced to five practical lessons.

Control your own IOR structure rather than relying on a borrowed name. A third-party arrangement may look convenient, but the liability is real, refund rights and payment arrangements follow the entry and IOR structure, and a third party can withdraw at any time, disrupting future shipments. For a company that plans to build a long-term U.S. business, maintaining control over its import structure is generally more stable than depending on an informal name-lending arrangement. After EO 14411, however, "Non-Resident Importer plus continuous bond" can no longer be treated as a standard formula. Companies now need to compare the Foreign IOR bond and entry rules in force at the time, the cost and control implications of an IOR service provider, and the economics of establishing a U.S. entity before deciding which structure fits best.

HTS classification and customs value are two of the biggest levers on duty cost. The same product can carry materially different duty rates under different tariff lines. Freight, insurance, and duty included in a DDP price also need to be separated correctly when determining customs value, or the importer risks paying duty on amounts that should not be included. These are not issues to hand over blindly to a broker. The company should understand the basis and retain final review authority.

Build a tariff-adjustment clause into DDP contracts. When the legal basis for tariffs can change several times within a year, fixing a full year's price to the rate in effect on quotation day puts the supplier's margin at the mercy of policy changes. A clause that states which effective date controls and how increases above an agreed baseline are shared gives both sides a clearer commercial framework. U.S. customers will often accept that approach when the mechanism is transparent.

Treat the end of de minimis as a reason to rethink the operating model, not simply as a loss of a tax advantage. The old duty-free parcel model has already been suspended globally, and the commercial-shipment exception is scheduled for permanent repeal in July 2027. For some brands, importing in bulk into a U.S. 3PL and fulfilling domestically can reduce repeated border-processing costs, shorten delivery times, and improve the customer experience. The economics still need to be tested against the product and order profile, but the change can also create a more scalable U.S. distribution model.

Treat documents and records as an operating asset. The five-year record-retention requirement is not administrative housekeeping. If CBP conducts a post-entry review, the company may need to produce invoices, packing lists, bills of lading, entry documents, certificates of origin, and proof of duty payment. A disciplined filing system also supports refund claims, audit responses, and customer reconciliation.

9. Closing: IOR Is Not Just a Burden. It Is Part of the U.S. Market Entry Strategy

When a U.S. customer pushes the IOR responsibility back to an overseas supplier, it may look like the buyer is simply offloading work and risk. In practice, it also tests whether the supplier can manage customs clearance, understand landed cost, and operate within U.S. compliance requirements. Suppliers that can do that well are easier for U.S. customers to work with. Those that cannot may remain limited to traditional FOB-style relationships while competitors offer a more complete import solution.

From hardware manufacturers in Taoyuan to electronics brands in Shenzhen, furniture producers in Ho Chi Minh City, and rubber-products companies in Penang, more Asian businesses are building the capability to manage the U.S. import side of the transaction. What they have in common is not necessarily scale. It is the willingness to treat IOR as an operating discipline and turn each problem into a better process for the next shipment.

Asian brands that build the right U.S. import structure, understand their landed cost, and define tariff and compliance risk clearly in their contracts are better positioned to operate steadily in a market where the rules can change quickly.

IOR is only three letters, but it carries both responsibility and commercial opportunity. Companies that can manage the role consistently gain more control over how they enter and serve the U.S. market.

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