Trade Documents
What is a Proforma Invoice?
Proforma invoice vs commercial invoice — when to use, validity, and typical fields for export sales.
A proforma invoice is a preliminary quotation document used for payment, import license, and LC opening before shipment.
Meaning and When to Use Proforma Invoice
Proforma Invoice (Proforma Invoice) is an Incoterms® 2020 rule for international trade. Used before shipment for any mode — not a customs final declaration.
Always state the full format in contracts — e.g. "Proforma Invoice Shanghai, Incoterms® 2020" — not the acronym alone.
Choose Proforma Invoice based on who can best arrange carriage, insurance, and import clearance.
Division of Responsibilities, Risk, and Cost
Under Proforma Invoice, responsibilities typically split as follows:
- Seller: Issue PI labeled "Proforma Invoice" with estimated value and validity date
- Seller: State Incoterms, payment terms, and bank details
- Buyer: Use PI for internal approval, deposit TT, or LC application
- Buyer: Expect commercial invoice after shipment with final values
PI is not binding customs value — ensure commercial invoice matches agreed PI unless renegotiated.
Pricing and Cost Practice
PI often shows FOB/CIF unit prices and MOQ. Use Quotation Calculator then convert to PI format.
Documents and Compliance
Clearly mark "Proforma Invoice" header. After shipment issue commercial invoice and packing list — see related guides.
Examples
Example — 30-day PI validity
PI USD 45,000 FOB Ningbo valid 30 days — buyer pays 30% deposit against PI number PI-2026-001.
Example — LC from PI
Buyer opens LC referencing PI description — shipment must match LC and later commercial invoice.
FAQ
- Is proforma invoice legally binding?
- Contract-dependent — often subject to confirmation; not a tax or final customs document.
- Can PI value differ from commercial invoice?
- Only with agreement — LC and customs expect consistency unless amended.
- Must PI say Proforma?
- Yes — label clearly to avoid confusion with commercial invoice.
- PI for samples?
- Common for sample shipments with nominal or zero values — declare purpose on invoice.
- How long is PI valid?
- Seller sets validity — typical 15–30 days in quotation notes.
Conclusion
PI starts the export sales cycle; commercial invoice closes it. Link Quotation Calculator with Commercial Invoice guide.