By Nick Lung    Photo：CANVA

Bonded warehouse refers to a special warehouse established with the approval of the national customs, used to store goods that have not yet gone through import procedures or are in a bonded state. These goods are usually imported goods, export goods or other goods subject to customs supervision. Its advantages are mainly reflected in tax convenience, capital utilization efficiency, logistics flexibility, etc. Bonded warehouse has the following features and functions:

1. Bonded function

During the storage period of the goods, no import taxes or other duties are required for the time being.

Enterprises can perform simple processing such as inspection, packaging, sorting, and labeling in the warehouse without affecting the bonded status.

2. Cost savings

Importing companies can delay payment of tariffs and reduce cash pressure.

Reduce additional tax burdens during goods turnover and storage.

3. Facilitate trade

Export goods can be shipped to bonded warehouses in advance for export, making logistics more flexible.

Overseas goods can be collected and distributed in bonded warehouses, and then transshipped according to demand.

Main purpose

Storage of imported goods: Goods that have not yet completed import procedures can be stored in a bonded state.

Preparation of export goods: Export goods can be advanced into the warehouse and await export arrangements.

Transshipment or re-export: Some goods can be distributed through bonded warehouses and then re-exported to a third country.

Simple processing and value-added services: such as subpackaging, labeling, packaging modification, etc., to increase the market value of goods.

Establish conditions

Approval from local customs and relevant government departments is required.

Warehouses must be equipped with facilities to prevent the loss and damage of goods, as well as technical systems that meet customs supervision requirements (such as monitoring equipment, logistics management systems).

Differences from ordinary warehouses

Ordinary warehouse: The entry of goods into the warehouse does not involve customs supervision, and import customs declaration and other procedures need to be completed.

Bonded warehouse: The goods are under customs supervision and can be delayed or even not declared (if they are eventually re-exported).

Bonded warehouses provide enterprises with many advantages in tax, cost, logistics and other aspects, and are particularly suitable for the following needs:

1. Reduce cash flow pressure and flexibly respond to market demand.

2. Support distribution and transshipment in multiple places to improve trade efficiency.

3. Reduce tax burdens and risks and improve the operational flexibility of the supply chain.

Appreciate if you could share TGL Blog among your friends who are interested in first-hand market information of supply chain and updated economic incidents.