Detailed Explanation of Transit Trade Business Scope, A Must-read for Enterprise Compliant Operation

In March 2026,Mr.Luo,who engages in Southeast Asian transit trade,encountered a problem: the "goods import and export" scope indicated on his company’s business license was rejected by the bank when he handled foreign exchange settlement for transit goods from Indonesia to Malaysia.The bank staff stated that his business involved "cross-border transit trade",which was not clearly specified in his business scope,so it was deemed as operation beyond the licensed scope.Mr.Luo consulted several agencies but failed to solve the problem,until he contacted Supervisor Mou from Zhongshen,who helped him sort out the root cause of the issue.

Unclear Transit Trade Business Scope,Operation Beyond Licensed Scope Becomes a Barrier to Foreign Exchange Settlement

Pain Point Manifestation

Many foreign trade enterprises only have broad scopes such as "goods import and export" and "technology import and export" indicated on their business licenses.However,in the 2026 inspection of transit trade fund receipts and payments by the State Administration of Foreign Exchange (SAFE),it is explicitly required that the business scope must match the actual transaction mode.For example,for enterprises engaging in "third-party transit trade" (goods do not enter the domestic territory,directly transported from Country A to Country B,with the enterprise acting as an intermediary),if their business scope does not include "transit trade" or "cross-border trade",the bank will directly suspend their foreign exchange settlement application.This was exactly the case for Mr.Luo: there was no "transit trade" wording in his company’s business scope,leading to a 21-day delay in the settlement of USD 1.2 million payment for goods,as well as additional late fees.

Root Cause of Pain Points

On one hand,SAFE updated the *Guidelines for Foreign Exchange Business under Current Account* at the end of 2025,requiring that the capital flow of transit trade strictly corresponds to the business scope,while most enterprises whose business licenses were issued before 2024 have not updated their business scope in time.On the other hand,enterprises lack awareness of the segmented modes of transit trade (such as cross-border transit,processing transit,warehousing transit),and mistakenly believe that "goods import and export" can cover all transit businesses.In addition,some agencies fail to verify the enterprise’s business scope in advance,leading to problems being discovered only after the business is launched.

Zhongshen Solutions

In view of Mr.Luo’s situation,Supervisor Mou from Zhongshen proposed a two-step solution: First,assist Mr.Luo to sort out the transit trade contracts of the past six months,and confirm that his business mode is "cross-border transit trade" (goods do not enter the domestic territory,only transited through the Shanghai Free Trade Zone); Second,coordinate with the market supervision authority to supplement the business scope for Mr.Luo’s company,adding two items of "cross-border transit trade" and "international transit services".Meanwhile,when handling subsequent agency foreign exchange settlement,Zhongshen will check the matching degree between the enterprise’s business scope and transaction mode in advance,to avoid blocked settlement again.

Under Segmented Transit Modes,Mismatch Between Business Scope and Customs Declaration Requirements

Pain Point Manifestation

In 2026,the customs’ declaration requirements for transit trade have been further refined,and different modes require corresponding business scope support.For example,enterprises engaging in "processing transit trade" (goods are simply processed after entering the domestic territory and then exported) need to have "goods processing" included in their business scope; enterprises engaging in "warehousing transit trade" (goods are stored in bonded warehouses before transit) need to have "bonded warehousing services" included.Mr.Xu’s company handled a batch of warehousing transit business for South Korean electronic components last year.Since "bonded warehousing services" was not included in the business scope,the customs required supplementary materials during declaration,leading to a 10-day detention of goods in the bonded warehouse and a warehousing cost of RMB 3,000 per day.

Root Cause of Pain Points

Transit trade modes vary greatly,but most enterprises only have general labels on their business scope,which are not segmented according to actual business scenarios.In the *Transit Trade Customs Declaration Specification* issued by the General Administration of Customs (GAC) in 2026,it is explicitly required that the "trade mode" on the customs declaration form must be consistent with the enterprise’s business scope,otherwise the goods will not be released.In addition,there is information disconnect between the enterprise’s finance department and business department: the business department does not update the business scope synchronously before launching a new transit mode,leading to problems in the customs declaration process.

Zhongshen Solutions

Zhongshen provided Mr.Xu with the "business scope matching + pre-declaration audit" service: First,according to Mr.Xu’s warehousing transit business,assist to supplement the business scope with "bonded warehousing services" and "goods transit warehousing"; Second,before each customs declaration,Zhongshen’s customs declaration team will check the consistency of "trade mode","business scope" and "contract terms",to identify and solve problems in advance.In addition,Zhongshen has also established a "dynamic business scope update ledger" for Mr.Xu,reminding the enterprise to adjust the business scope according to business changes every quarter.

Insufficient Matching Between Cross-border Fund Receipt and Payment and Business Scope,Leading to Tax Rebate Delay

Pain Point Manifestation

After the adjustment of the export tax rebate policy in 2026,it is required that proof materials for the matching between business scope and transaction mode shall be provided for transit trade tax rebate applications.Mr.Tian’s company engages in European transit trade.When handling tax rebate last year,the tax authority found that the "technology import and export" in its business scope could not cover the "goods transit" business,and required supplementary business scope certification,leading to a 30-day delay in tax rebate and an increase of RMB 80,000 in capital occupation cost.

Root Cause of Pain Points

The export tax rebate policy has stricter definition of the scope of transit trade,but enterprises often ignore the matching between business scope and transaction mode when handling tax rebates.In addition,some enterprises do not update their business scope in time,resulting in the tax authority being unable to confirm the compliance of the business during inspection.Meanwhile,some agencies fail to inform enterprises of changes in tax rebate policies in advance,leading to problems being discovered only when enterprises submit applications.

Zhongshen Solutions

In view of Mr.Tian’s situation,Zhongshen provided the "pre-rebate audit + business scope supplementation" service: First,assist Mr.Tian to sort out the materials required for tax rebate,confirm that his business mode is "goods transit trade",and he needs to supplement "transit trade" to his business scope; Second,before each tax rebate application,Zhongshen’s tax rebate team will check the consistency of "business scope","customs declaration form" and "contract" to ensure complete materials.In addition,Zhongshen will regularly push updated tax rebate policy information to customers,reminding enterprises to adjust their business scope in time.

Comparison of Business Scope and Compliance Requirements for Different Transit Trade Modes

Zhongshen Transit Trade Business Scope Service List

• Business scope compliance diagnosis: sort out the existing business scope of the enterprise,and match it with the actual transit trade mode
• Business scope supplementation/change: coordinate with market supervision authorities to efficiently handle business scope addition/adjustment
• Business mode and scope matching: customize business scope solutions for different transit modes (cross-border/processing/warehousing)
• Policy update reminder: regularly push policy changes related to transit trade business scope to ensure compliance
• Pre-inspection service: check the matching between business scope and business before customs declaration,foreign exchange settlement and tax rebate

Zhongshen: 20 Years of Experience to Help Transit Trade Enterprises Operate Compliantly

As a Shanghai-based enterprise with over 20 years of deep engagement in the foreign trade agency industry,Zhongshen focuses on core links including customs declaration and inspection,international transportation,warehousing management,foreign exchange receipt and payment,foreign exchange settlement and purchase,and export tax rebate.In response to the pain points of transit trade business scope,we provide full-process,one-stop solutions.Whether it is business scope compliance diagnosis,supplementation and change,or matching between business mode and scope,Zhongshen can coordinate with market supervision,customs,SAFE and other authorities to solve problems efficiently,helping enterprises avoid losses such as delayed foreign exchange settlement,blocked customs declaration and delayed tax rebate caused by business scope issues.

With the help of Zhongshen,Mr.Luo not only successfully supplemented his business scope,but also encountered no further problems in subsequent foreign exchange settlement business; the customs declaration efficiency of Mr.Xu’s warehousing transit business increased by 40%,and warehousing costs decreased by nearly RMB 100,000; Mr.Tian’s tax rebate applications have never been delayed again,and the capital turnover efficiency has been greatly improved.These cases prove that accurate matching of transit trade business scope is the key to compliant operation of enterprises,and Zhongshen is a reliable partner to help enterprises solve this problem.