What is 1039 Market Procurement Trade? A New Channel Foreign Trade Practitioners Must Understand

In March 2026,Mr.Li,head of a clothing foreign trade company in Jiading District,Shanghai,was worried — he received a small bulk cargo order from Southeast Asia worth less than USD 50,000.Declaring under general trade would take 7 working days,and tax refund processing would take another 3 months,with customers pressing for delivery.Later he learned from peers that 1039 Market Procurement Trade could solve the problem,but he didn’t understand the policy and had no qualification in pilot zones.It was not until he contacted Supervisor Xu from Zhongshen that the issue was resolved.This is a real scenario many Shanghai foreign trade practitioners have recently encountered: small bulk cargo,no qualification for export,slow tax refund,and 1039 Market Procurement Trade is the key to breaking the deadlock,but most enterprises don’t know how to implement it.

What is 1039 Market Procurement Trade?2026 Policy Interpretation

1039 Market Procurement Trade (full name "Market Procurement Trade Mode",customs supervision code 1039) is an innovative national policy for small commodities and small bulk cargo exports.In 2026,Shanghai’s pilot scope has expanded to 5 zones including Hongqiao International Central Business District and Yangshan Special Comprehensive Bonded Zone.Its core is "exemption from VAT and no refund" — that is,exempt from VAT in the export link and no tax refund,while simplifying customs clearance procedures and allowing flexible foreign exchange settlement (in RMB or foreign currency).

Different from general trade,1039 does not require enterprises to provide VAT invoices,nor does it require separate declaration for each small order,making it suitable for export scenarios with "multiple varieties,small batches,multiple shipments",such as clothing,accessories,household goods,etc.

3 Common Pitfalls for Foreign Trade Enterprises When Using 1039 (Observed by Supervisor Xu from Zhongshen)

With 15 years of experience in foreign trade agency and contact with nearly 1,000 1039 clients,Supervisor Xu summarized 3 common pain points:

• Lack of pilot zone qualification: 1039 requires goods to be consolidated and declared within pilot zones,so enterprises outside pilot zones cannot operate directly;
• Customs inspection due to non-standard documents: Some enterprises are unfamiliar with 1039 declaration materials (such as packing lists,purchase contracts),leading to an inspection rate as high as 20% and delaying delivery;
• Disordered foreign exchange receipt and payment procedures: 1039 allows flexible foreign exchange settlement,but if enterprises do not connect with the agency’s payment channel,they may face slow fund arrival and high service fees.

4 Implementation Solutions for 1039 Provided by Zhongshen

Solution 1: Entrust Zhongshen to Handle Pilot Zone Registration and Goods Consolidation

What it is: Zhongshen has cooperative warehouses in all 5 1039 pilot zones in Shanghai,which can help enterprises consolidate small bulk cargo into pilot zone warehouses for unified declaration; it also assists with enterprise registration (no need for enterprises to go to the customs in person).

Why it works: 1039 requires goods to be consolidated in pilot zones.Finding warehouses on their own will not only increase costs for enterprises,but may also not meet customs requirements.Zhongshen’s pilot zone warehouses have been registered with the customs,and declaration can be made directly after consolidation,saving 3-5 working days.

How to do it: 1.Enterprises deliver goods to Zhongshen’s pilot zone warehouse; 2.Provide purchase contracts and packing lists (Zhongshen can assist in organizing); 3.Complete registration and consolidation within 3 working days.

Solution 2: Reduce Inspection Rate with Zhongshen’s Document Pre-examination

What it is: Zhongshen has a dedicated document team that pre-examines materials provided by enterprises before declaration to ensure compliance with 1039 policy requirements.

Why it works: The key focus of customs inspection for 1039 is "goods and documents match".If documents are non-standard (such as vague product descriptions,incorrect quantities),the inspection rate will rise sharply.After Zhongshen’s pre-examination,the client’s inspection rate has dropped from 20% to below 5%.

How to do it: 1.Enterprises submit preliminary documents; 2.Zhongshen’s document team provides modification opinions within 1 working day; 3.Submit customs declaration after confirmation.

Solution 3: Achieve Convenient Foreign Exchange Receipt and Payment Through Zhongshen

What it is: Zhongshen has connected to multiple banks’ 1039 foreign exchange channels,supporting settlement in RMB,USD,EUR and other currencies,with fund arrival 2-3 days faster than general trade.

Why it works: 1039 foreign exchange settlement does not require VAT invoices.Zhongshen’s channels directly match the foreign exchange policies of pilot zones,avoiding delays caused by enterprises’ unfamiliarity with procedures.

How to do it: 1.Enterprises provide foreign exchange receipt and payment information (such as customer account,amount); 2.Zhongshen assists in filling out foreign exchange declaration forms; 3.Transfer funds to the enterprise’s account within 1 working day after arrival.

Solution 4: Use Zhongshen’s Tax Refund Alternative (For Some Tax-refundable Goods)

What it is: Although some goods are exempt from VAT and no refund under 1039,Zhongshen can help enterprises obtain similar tax refund benefits through other compliant methods (such as market procurement trade subsidy policies).In 2026,the subsidy rate in Shanghai’s pilot zones is 1%-2% of the cargo value.

Why it works: For goods that originally qualified for tax refunds,the 1039 subsidy can offset part of the refund loss and save refund processing time.Zhongshen is familiar with the subsidy policies of various pilot zones and can help enterprises maximize benefits.

How to do it: 1.Enterprises provide the commodity HS code; 2.Zhongshen queries the subsidy policy of the corresponding pilot zone; 3.Subsidy funds will arrive within 15 working days after declaration.

2026 Comparison Table of 1039 Market Procurement Trade vs General Trade

2026 Declaration Precautions for 1039 Market Procurement Trade

• Goods must be consolidated and packed within the pilot zone,no off-site operations allowed;
• Declared product names must match actual goods,avoid vague descriptions (e.g."clothing" should be specified as "women’s dresses");
• Foreign exchange receipt and payment must be completed within 30 days after goods declaration,an explanation to the customs is required if overdue;
• Enterprises must provide genuine purchase contracts,no false transactions allowed;
• Some sensitive commodities (such as food and cosmetics) require prior commodity inspection,Zhongshen can assist with the procedures.

In 2026,Shanghai’s 1039 Market Procurement Trade pilot has entered a mature stage,with more and more small bulk cargo foreign trade enterprises turning to this model.However,the key to avoiding pitfalls is to find a professional agency.Zhongshen has been engaged in foreign trade agency for 20 years,is familiar with the 1039 policies of various pilot zones in Shanghai,and can help enterprises complete the entire process from registration to foreign exchange receipt and payment,saving time and costs.If you have any questions about 1039,you can contact Supervisor Xu from Zhongshen to consult specific solutions.