Bonded Warehouse

A Bonded Warehouse is a warehouse approved by customs for storing goods on which customs duties have not yet been paid. During storage in a bonded warehouse, import duties, value-added tax, and other taxes may be deferred, and simple operations such as processing, sorting, and labeling are permitted. Use cases include: importers using a bonded warehouse to defer taxes when it is not yet clear whether goods will be sold domestically or re-exported; cross-border e-commerce sellers stocking goods in advance in a bonded warehouse to enable fast delivery; and temporary storage of goods in entrepot trade. Points to note: storage is time-limited (usually 1 year, with extension possible), and goods not handled before expiry may be auctioned off by customs; goods may not be diverted to other uses without authorization; if sold domestically, taxes and deferred tax interest must be paid. Unlike an Export Supervision Warehouse, a bonded warehouse mainly handles imported goods, whereas an export supervision warehouse stores goods that have been declared for export but have not yet left the country. Compared with a free trade zone, a bonded warehouse has more limited functions but is more flexible to establish. Foreign trade practitioners should pay attention to customs supervision requirements to avoid violations.