The company plans to engage in entrepôt trade business and is unfamiliar with its taxation. It inquires about specific taxes to be paid for entrepôt trade, how to calculate them, and any special policy regulations. The best answer points out that entrepôt trade mainly involves value-added tax, corporate income tax, etc. Value-added tax is generally not levied; services provided may be taxed at 6%; corporate income tax is levied at 25% (preferential tax rates apply if preferential conditions are met), with tax calculated on the balance of income minus costs, and attention should also be paid to documentation and regional policy differences.
What are the methods of entrepot trade? Come and find out!
Resolved
I am recently interested in entrepôt trade and would like to delve deeper into what methods of entrepôt trade exist. I understand that entrepôt trade refers to the trade of goods bought and sold internationally, which is not conducted directly between the producing country and the consuming country but through a third country. However, I would like to know the specific operational methods and hope to receive a detailed explanation, such as how these methods are applied in actual business. Thank you!
Trade Expert Insights Answers
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
Common methods of entrepôt trade mainly include the following. Firstly, re-export trade, where goods are imported into a transit country and then re-exported to other countries without substantial processing. For example, a Chinese enterprise first exports goods to Hong Kong, and a Hong Kong trader resells them to customers in other countries without processing. This method is simple, and the goods only make a short stopover at the transit point.
Secondly, processing and re-export trade, where goods undergo certain processing in the transit country before being exported. For instance, some electronic product components are assembled into finished products in a transit country and then sold to the target market, increasing the added value of the product.
There is also offshore hand-to-hand trading, where goods do not enter the transit country and are shipped directly from the producing country to the consuming country, with the entrepôt trader only handling documentation and trade processes. For example, if a Chinese supplier reaches a transaction with a US customer, and the transaction is handled by a Singaporean trader, the goods are shipped directly from China to the United States.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
One method of entrepôt trade is to first ship goods to a bonded area for storage, waiting for a suitable opportunity to resell them. When goods enter a bonded area, it is equivalent to them still being offshore, enjoying bonded policies, saving warehousing costs, and allowing for waiting for better prices.
Kevin HuangYears of service：3Customer Rating：5.0
E-Commerce Export AdvisorStart a Chat
There is also triangular trade, which involves three parties: the producing country, the transit country, and the consuming country. The producing country sells goods to the transit country, and the transit country, after simple processing or packaging, sells them to the consuming country, realizing benefits for multiple parties.
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
The use of free trade ports for entrepôt trade is also common. Free trade ports offer preferential policies, and goods can move in and out freely, attracting entrepôt trade business. Simple operations such as sorting and packaging can be performed within the port before re-exportation.
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
Agency entrepôt is a method where an exporter entrusts an entrepôt agent to handle entrepôt business. The agent is familiar with local policies, regulations, and markets, helping the exporter efficiently complete the entrepôt trade and saving time and effort.
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
In entrepôt trade, there is a method of consignment entrepôt. The exporter first deposits goods with a consignee in the transit country, and the consignee sells the goods to customers in other countries based on market conditions.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
There is also a type of composite entrepôt, which is a comprehensive application of several entrepôt methods. For example, goods may first be processed in a bonded area and then exported using the offshore hand-to-hand trading model to meet complex trade demands.
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
In entrepôt trade, entrepôt through establishing overseas warehouses is also a method. Goods are first stored in overseas warehouses, allowing for rapid response to the needs of surrounding customers and timely shipments.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
Quota entrepôt is also a method. When the exporting country has an export quota for a certain commodity, the goods can be exported to the target country through the transit country utilizing its quota.