1. How payment terms shape the document set
The invoice is the same document in every transaction. What changes is who bears the cost and the risk of getting the documents right, and who pays for the certification.
The Incoterms and the payment terms together determine that allocation, and the allocation is often not what either party assumed.
2. Cash in advance
The buyer pays before shipment.
Document cost falls on the seller, since the seller prepares everything to ship.
Where the destination requires legalized documents, the seller usually bears the legalization cost, because the destination’s requirement is not a contractual term the buyer negotiated.
When it goes wrong
Where the certification cost is material and the margin is thin, the seller discovers after commitment that the legalization cycle costs more than the margin allows.
3. Open account
Seller ships, buyer pays later.
The seller absorbs everything. Document preparation, legalization, courier.
The economic logic: the buyer has chosen the seller and controls the terms. The seller who wants the business supplies the paperwork.
The cost that hides
Where the destination requires legalization and the seller did not price it in, the cost appears as an unbudgeted reduction in margin, sometimes months after the sale.
4. Letter of credit
The credit names the documents and the credit pays the cost of complying with them.
Where the credit requires legalized documents, the cost of legalization falls on whichever party the contract assigns it to, and the contract frequently does not assign it.
The default: the seller complies with the credit, so the seller pays unless the contract says otherwise.
The allocation that works
A contract term specifying that legalization cost is for the buyer’s account, or shared, is worth having where the destination is a consular destination and the volume is significant.
5. Documentary collection
The buyer pays or accepts against documents.
The seller prepares the documents, and the cost falls on the seller unless the contract assigns it.
6. What Incoterms actually say
Incoterms allocate costs between buyer and seller for transport, insurance, and export and import formalities.
They do not address certification or legalization cost directly.
The customs clearance obligation is allocated: under DDP the seller handles import clearance and bears the cost. Under other terms the buyer handles it.
But legalization of documents at origin is not a customs clearance obligation, and Incoterms are silent on it.
The gap
This is the precise point where allocation disputes arise. Incoterms decide who clears customs, not who pays for the notary, the authentication and the embassy legalization.
7. The destinations where it matters
Where the apostille applies, the cost is small — a notarization and an apostille.
Where consular legalization applies, the cost is material, and it is per document.
For a Middle Eastern destination requiring invoice, certificate of origin, packing list and free sale certificate to be legalized, the cost across four documents is not negligible.
8. The contract clause
A clause that resolves it:
Either: “All costs of certification, notarization, authentication and legalization of the export documents required by the buyer or by the destination authorities shall be for the buyer’s account.”
Or: “The seller shall bear the cost of all export documentation including legalization, and shall include such cost in the unit price.”
Either works. The absence of the clause is what causes disputes.
9. The practical answer
For most trade, the seller bears the cost and prices it in.
For consular destinations with high document volumes, the cost should be a visible line in the costing rather than an absorbed overhead.
The question in the title has no universal answer. It has a contract answer and a costing answer, and both should be settled before the shipment.
*This article is based on Incoterms 2020 and the consular authentication guidance published by China’s Ministry of Foreign Affairs, updated October 2026. Parties should address cost allocation in the contract.*