What is a bonded warehouse?

A bonded warehouse is a secure storage facility approved by customs for storing imported goods that have not yet been paid customs duties, taxes, and other import charges. These warehouses are strictly monitored by customs authorities to ensure the safety and compliance of goods during storage. The primary purpose of a bonded warehouse is to allow importers to defer payment of customs duties and taxes until the goods are released for domestic consumption or re-export.

How a bonded warehouse works

The operation of a bonded warehouse is relatively simple but highly efficient. Imported goods can be stored temporarily in a bonded warehouse without paying customs duties and taxes immediately after arriving in the destination country. The storage period in the warehouse is usually five years, depending on the customs policies of each country. During this period, the owner of the goods can choose to pay the customs duties and taxes and release the goods for domestic consumption or re-export them to other countries to avoid paying local customs duties. Some goods can also be processed or assembled in a bonded warehouse, subject to customs approval.

Types of bonded warehouses

Public bonded warehouse

• Operated by a third-party logistics enterprise or warehousing company, multiple enterprises can share the warehouse resources.
• Suitable for small and medium-sized enterprises, cross-border e-commerce, import traders, etc., which can enjoy the bonded policy without building their warehouses.
• Enterprises can store goods flexibly and improve the efficiency of warehousing and supply chain management.

Self-use bonded warehouse

• Set up by the enterprise itself, it only stores the imported goods of that enterprise.
• Suitable for large manufacturing enterprises, multinational companies, etc., and is often used to store raw materials, parts, or semi-finished products.
• Enterprises can better control the warehousing management process and reduce operating costs.

Logistics bonded warehouse

• Mainly used for cargo transit, distribution, splitting, and allocation by international logistics companies.
• Suitable for cross-border e-commerce and international trading companies, it can accelerate the turnover of goods and improve the response speed of the supply chain.
• Goods can be stored in the warehouse and shipped to different markets or customers.

Processing bonded warehouse

• Allows simple value-added processing such as sorting, packaging, labeling, and assembly to be carried out in the warehouse.
• Suitable for manufacturing, retail, and e-commerce companies, it can optimize inventory management and enhance the value of goods without paying tariffs.
• It is ideal for companies reprocessing goods before exporting or selling them domestically.

Special bonded warehouse

• It mainly stores unique goods such as cold chain food, medicine, chemicals, and luxury goods.
• They must meet specific storage requirements, such as temperature control equipment and safety supervision measures.
• They are suitable for industries with high requirements for storage conditions, such as pharmaceuticals, food, and electronics.

bonded export warehouse

• It is specially used to store goods that are about to be exported. Enterprises can store goods before export and enjoy tax exemption policies.
• It is suitable for foreign trade enterprises and manufacturing enterprises, which can reduce the financial pressure of export trade and improve the flexibility of goods deployment.

Customs supervision bonded warehouse

• The customs directly supervise it, and the entry and exit of goods require strict approval.
• It is suitable for high-value, sensitive goods or industries under national key supervision to ensure tax revenue and market compliance.

Advantages of bonded warehouses

Using a bonded warehouse brings a variety of benefits to a business, including

• Deferring taxes: The business does not need to pay import duties immediately, which improves cash flow.
• Optimizing the supply chain: Goods can be dispatched flexibly in response to market demand changes, reducing the inventory risk.
• Processing for added value: Some bonded warehouses allow simple processing, which increases the product’s added value.
• Export facilitation: If the goods are ultimately exported, the business can be exempt from tariffs, reducing operating costs.

The difference between a bonded warehouse and an ordinary warehouse

The core difference between a bonded warehouse and an ordinary warehouse lies in customs duties and supervision. Customs have already cleared goods stored in an ordinary warehouse, while goods in a bonded warehouse are still under customs supervision and have not officially entered the domestic market, so they enjoy tax exemption and bonded policies. In addition, bonded warehouses can carry out some value-added operations, while ordinary warehouses are usually only used for storage and transportation.

How do I apply for and use a bonded warehouse?

Enterprises must apply to customs to use a bonded warehouse and meet the relevant qualification requirements. The general process includes

1. submitting an application and providing information such as the enterprise’s qualifications and the warehouse location.
2. After the customs review of the application, it will be confirmed that the requirements for setting up a bonded warehouse have been met.
3. The warehouse will then be put into use, and it will comply with customs supervision policies and regularly submit records of goods entering and leaving the warehouse.

Related FAQs

What types of goods can be stored in a bonded warehouse?

Bonded warehouses usually store a wide range of goods related to international trade, including electronic goods, luxury goods, perishable goods, alcoholic beverages, and tobacco products.

What is the storage period in a bonded warehouse?

The storage period in a bonded warehouse is usually five years, depending on each country’s customs policies.

What fees are involved in using a bonded warehouse?

The use of a bonded warehouse usually involves storage fees, handling fees, security fees, and other storage-related fees.

What is the difference between a bonded warehouse and an unbonded warehouse?

A bonded warehouse allows for the deferral of customs duties and taxes, while an unbonded warehouse incurs all relevant charges upon the importation of goods.

What are the primary uses of a bonded warehouse?

A bonded warehouse’s main uses are to defer customs duties and taxes, provide flexible inventory management, and simplify the re-export process.

Who can use a bonded warehouse?

Bonded warehouses primarily serve the needs of importers, exporters, and manufacturers engaged in international trade.

What are the risks of using a bonded warehouse?

Risks of using a bonded warehouse include time constraints, high operating costs, and restricted access.

How are the costs of a bonded warehouse calculated?

The costs usually include storage fees, handling fees, customs clearance fees, etc., depending on the type of warehouse, the storage period, and the services required.