Incoterms are the 11 rules of the International Chamber of Commerce that define, in three letters, who arranges and pays for transport, who clears customs, who insures the cargo, and the exact point where risk passes from seller to buyer. The current version is 2020. They do not govern price, payment terms or transfer of ownership: that belongs in the contract.
The four you will see in almost every purchase
The most common mistake: assuming CIF includes customs
CIF covers freight and insurance to the port. Customs clearance, ITBIS (VAT), duties and trucking to your warehouse are not included. Many new importers compute their landed cost on the CIF price and discover at the port that 20 % to 35 % more is due, depending on the tariff line.
Which one suits imports into the Dominican Republic
If you want to control freight cost and pick your forwarder, buy FOB (or FCA for containerized cargo, which is what the ICC recommends). You negotiate freight with someone you know and buy insurance to fit.
If you prefer simplicity and the supplier has good rates, CIF works, but always ask for the breakdown and check that insurance covers at least ICC (A) clauses, not just the minimum (C).
DAP and DDP make sense for urgent spare parts or small courier purchases. For full containers, the supplier rarely knows Dominican clearance well and the price usually carries a high margin for that risk.
Write it properly on the invoice
The Incoterm must appear with the exact place: "FOB Shanghai" or "DAP Av. 27 de Febrero 282, Santo Domingo", not just "FOB". Dominican customs uses it to determine the valuation base: in a FOB purchase, freight and insurance are added to the value to compute duties.
Before accepting a proforma, send it to us. We tell you which Incoterm suits you and what your landed cost will be.
Talk to the team