Doing entrepot trade in domestic Free Trade Zones conforms to current regulatory compliance requirements
Importing from China?
Need help with sourcing, customs or shipping?
Your China Import Partner
Reliable sourcing and import agency services.
I am engaged in cross-border wholesale of small home appliances in Southeast Asia, having been in this industry for nearly 5 years. Recently, I received two stable entrepot trade orders: the goods are produced in a domestic factory and will be finally delivered to customers in the Middle East, requiring transshipment, container splitting, and cargo distribution.
Previously, I used regular ports for transshipment, which not only had long capital turnover cycles but also high warehousing and customs clearance costs. Last month, due to document issues, the shipping schedule was delayed for a week, and I paid thousands of yuan in liquidated damages to the customer.
I have heard that FTZ policies are favorable for transshipped goods, so I want to switch to operating entrepot trade in domestic FTZs, but I am not sure whether the policy allows this in 2026, whether there are compliance risks, and whether it can really reduce costs. I would like to ask about the specific requirements and precautions.
SophiaYears of service：7Customer Rating：5.0
Senior Customs AdvisorStart a Chat
In 2026，all domestic FTZs that meet regulatory requirements can conduct entrepot trade in compliance. There are no prohibitive requirements in current policies，on the contrary，multiple facilitation benefits have been introduced for entrepot trade.
The core benefits currently include bonded warehousing for goods upon entry，VAT deferral，and facilitation of cross-border RMB settlement，which are applicable to scenarios such as small and medium-sized batch entrepot cargo distribution and third-country title transshipment. These can directly reduce capital turnover costs by 15%-20% and shorten the overall operation cycle by 3-7 days.
Operational realization path: Declare and record the goods in the FTZ in advance. After completing warehousing and cargo distribution，directly transfer the customs to exit. No import tariffs or VAT are required during the whole process，only documents such as title transfer certificates and sales contracts need to be retained for future reference.
Compliance red lines to note: It is prohibited to use FTZ entrepot trade for false trade to obtain tax refunds. All documents must ensure consistency of title，cargo flow，and capital flow. Violations will be included in the customs abnormal list，affecting the customs clearance efficiency of all subsequent import and export businesses. Currently，most FTZs have opened green channels for entrepot trade. As long as the requirements are met，the operation process is simpler than that of regular ports.
EmilyYears of service：3Customer Rating：5.0
Client Success AdvisorStart a Chat
When declaring entrepot trade to enter the FTZ, a complete set of entrepot trade sales contracts must be provided in advance, namely the purchase contract between the domestic supplier and you, and the sales contract between you and the overseas end buyer. At the same time, the final destination of the goods must be clearly marked to avoid being identified as general import trade during customs valuation.
If the title has been transferred before entering the FTZ, you need to declare the title change information to the customs in advance to avoid logical contradictions in the declaration leading to the deletion and re-submission of documents. For the entrepot trade green channel opened by customs in 2026, as long as the documents are logically complete, the valuation time can be compressed to 1 working day, which is much faster than 3-5 days for regular ports. If there is a valuation dispute, timely provide third-party title certificates and market quotation documents to prove the authenticity of the transaction.
AlexanderYears of service：10Customer Rating：5.0
Senior Trade AdvisorStart a Chat
The core of FTZ entrepot trade logistics operations is title control and transshipment cost control. For entrepot goods that need container splitting and cargo distribution, priority is given to public bonded warehouses in the FTZ, which can enjoy a free storage period of up to 6 months, saving more than 30% of warehousing costs compared to regular overseas transshipment ports.
If the original transshipment port experiences overcapacity and cargo is rejected, you can directly apply for a port change to exit in the FTZ without going through return procedures, making the operation process simpler. The bill of lading needs to be marked "To Order" to facilitate subsequent title endorsement and transfer, avoiding the failure to complete title transfer due to the named bill of lading. For goods that are transshipped in full containers without being split, you can apply for direct transit through the FTZ without entering the warehouse, further reducing operation time.
EllaYears of service：10Customer Rating：5.0
Senior Financial AdvisorStart a Chat
FTZ entrepot trade can enjoy bonded policies. Import tariffs and import VAT are not required when goods enter the FTZ, and taxes are only payable when the goods finally enter the domestic market. This can maximize profits by utilizing tariff differences and exchange rate differences.
For profit retention in entrepot trade, you can cooperate with cross-border RMB settlement policies in the FTZ to avoid exchange losses, and do not need to pay withholding tax on non-resident enterprises. As long as the transaction is real and compliant, you can enjoy these benefits.
If VAT is involved, you can apply for VAT deferral, without advancing the tax, and pay directly in the final sales link, significantly reducing capital occupation costs. It should be noted that the profits from entrepot trade must be declared truthfully to avoid being identified as tax base erosion risk due to unreasonable pricing, which will affect tax payment credit.
SarahYears of service：3Customer Rating：5.0
Foreign Exchange AdvisorStart a Chat
The receipt and payment of funds for FTZ entrepot trade can enjoy facilitation policies, supporting the use of RMB or foreign currency for settlement. You can directly complete receipt and payment through the settlement account of enterprises in the FTZ without providing a large number of paper documents for review in advance. If using RMB settlement, you can go through the CIPS system, which has a receipt and payment time 2-3 days faster than SWIFT and lower handling fees.
It should be noted that the payment and receipt path must match the transaction documents, and the payment and receipt parties must be consistent with the buyer and seller of the sales contract, avoiding the separation of capital flow and title, which may lead to foreign exchange settlement backlog. For transactions involving third-country title transfer, only the title transfer agreement is required to complete the payment and receipt review, without providing additional documents.
DavidYears of service：3Customer Rating：5.0
Business Development AdvisorStart a Chat
During the operation of entrepot trade, it is necessary to clarify the title transfer nodes in the sales contract and clearly agree on the title ownership during the warehousing period in the FTZ to avoid third-party disputes. If you need to exchange a letter of guarantee for a bill of lading, you need to clarify the liability scope of the letter of guarantee to avoid title loss due to soft clauses.
For goods involving intellectual property rights, you need to complete the intellectual property customs protection filing in advance to avoid the goods being detained by customs due to suspected infringement of transshipped goods. At the same time, you need to stipulate force majeure clauses to clarify the responsibility division for situations such as customs regulatory adjustments and shipping schedule delays, avoiding the inability to recover losses in case of breach of contract disputes.
OliviaYears of service：5Customer Rating：5.0
Senior Customs AdvisorStart a Chat
The inspection rate of FTZ entrepot goods is much lower than that of general import goods. As long as the declaration information is complete and true, most goods can be directly released by machine inspection.
If on-site container unpacking inspection is encountered, you need to prepare a complete set of documents in advance, including sales contracts, title certificates, and packing lists, to cooperate with customs in checking that the name, quantity, and declaration information of the goods are consistent. The authenticity of the seal needs to be checked.
If the seal is damaged during transportation, you need to promptly explain the situation to the customs to avoid being identified as opening the container without permission, leading to cargo detention. If inspection and identification are required, you can apply for the FTZ rapid inspection channel in advance, and the report issuance time is 2-3 days faster than that of regular ports, reducing unnecessary container detention fees.