---
title: "What are the core policy measures currently in place to encourage transit trade?"
description: "To address the pain points of low customs clearance efficiency，large capital occupation and unclear policy dividends in transit trade，measures can be implemented from four dimensions: fiscal support，customs facilitation，tax optimization and financial services，covering special subsidies，smart customs clearance，VAT deferral，cross-border settlement facilitation and so on，to help enterprises reduce costs in compliance，and improve operational efficiency and profit margin of transit trade.。"
url: "https://www.sh-zhongshen.com/en/qa/core-policy-measures-for-encouraging-transit-trade.html"
language: "en"
type: "Q&A"
category: "Entrepôt Trade Q&A"
datePublished: "2026-11-02"
dateModified: "2026-11-02"
brand: "Zhongshen Trading China"
answerCount: 8
---

# What are the core policy measures currently in place to encourage transit trade?

## Question

 I am the person in charge of a foreign trade enterprise mainly engaged in mechanical and electrical products. Recently, we launched transit trade to avoid trade barriers, but encountered problems of low customs clearance efficiency, large capital occupation and unclear policy dividends. Last month, a batch of precision mechanical and electrical equipment was detained at the transit port for 3 days, which cost us nearly 20,000 yuan in extra port detention fees and almost delayed the delivery date, making me extremely anxious. Now I would like to ask what practical incentive measures are currently available for transit trade, covering fiscal subsidies, customs facilitation, tax optimization and financial support. It would be better to provide specific and implementable directions combined with the actual situation of mechanical and electrical products, to help us reduce costs and improve operational efficiency. 

## Answers
                            
### Answer 1 — Best Answer

From the perspective of policy dividend implementation，we first remove vague statements and focus on three core confirmed measures for transit trade in pilot free trade zones such as Shanghai in 2026: **special fiscal subsidies**，**smart customs clearance facilitation**，**tax deferral optimization**.

For the transit trade scenario of mechanical and electrical products，the special subsidies can be aligned with the "Transit Trade Increment Support Program" of Shanghai Pilot Free Trade Zone. Enterprises need to submit transit manifests，bills of lading and settlement vouchers on a monthly basis，and can enjoy a subsidy of 500 yuan per TEU for the incremental part. Note that all documents for subsidy application must be submitted before the 15th of each month，and applications will not be accepted after the deadline.

For smart customs clearance，enterprises can apply for the "advance declaration for transit trade" permission. For mechanical and electrical products，customs clearance procedures can be processed in advance with pre-recorded manifests，without waiting for the arrival of goods，which can shorten the customs clearance time to less than 4 hours and effectively avoid the risk of port detention. For tax optimization，enterprises can apply for VAT deferral payment. The value-added tax in the transit trade link does not need to be paid immediately，and settlement will be carried out after the final departure of the goods，which can relieve the pressure of capital occupation for enterprises.

Compliance red lines to note: All subsidies and facilitation measures only apply to authentic and compliant transit trade. False transit trade and inconsistency between documents and goods are strictly prohibited. Once any violation is verified by customs，all support qualifications will be revoked，and administrative penalties will be imposed.

**status:** accepted
**Author:** Cindy Chen
**Date:** 2026-11-02

### Answer 2

For the customs clearance link of transit trade, consistency review of manifests and bills of lading shall be completed in advance, with focus on checking information such as transit port code, goods description, quantity, weight and measurement to ensure full consistency with actual goods. For the connection of core nodes, confirm the arrival time of goods with the transit port agent 24 hours in advance, and submit pre-declaration data simultaneously to avoid port detention caused by information delay.

For abnormal response plans, in case of customs valuation query, immediately provide upstream and downstream contracts of transit trade, settlement vouchers and full logistics track of goods transit to prove the authenticity of the transit trade. For final compliance implementation, all documents shall be kept for at least 3 years for subsequent customs verification.

**status:** suggested
**Author:** Jason Wu
**Date:** 2026-11-02

### Answer 3

For logistics route optimization of transit trade, ports with direct transit services shall be preferred, such as the direct transit route from Shanghai Yangshan Port to Singapore Port, which can reduce the number of cargo loading and unloading and lower the risk of cargo damage. For cargo right control, negotiable bills of lading shall be used, and the specific process of bill of lading endorsement shall be clarified to avoid cargo right disputes.

For the risks of container rollover and space overbooking, sign a space guarantee agreement with the shipping company in advance to lock the space, and reserve a 3-day buffer period at the same time. For container detention fees, enterprises can apply for exclusive free storage period extension for transit trade, with a maximum free storage period of 14 days. The application shall be submitted before the arrival of the goods, and relevant vouchers of transit trade shall be provided.

**status:** suggested
**Author:** Andy Guo
**Date:** 2026-11-02

### Answer 4

For tax optimization of transit trade, the VAT deferral policy can be applied. Enterprises conducting transit trade in Shanghai Pilot Free Trade Zone do not need to pay value-added tax in the cargo transit link, and will carry out final settlement after the final departure of the goods, which can effectively relieve the pressure of capital occupation for enterprises.

Meanwhile, for the profits from transit trade, enterprises can apply for compliant adjustment of cross-border related transaction pricing to ensure that profit distribution complies with BEPS rules and avoid tax risks. In addition, for withholding tax of non-resident enterprises, if the transit trade involves overseas payment, enterprises can apply for tax treaty treatment to reduce the withholding tax rate. Note that all tax operations shall keep complete transaction vouchers, including contracts, invoices, settlement vouchers, etc., for verification by tax authorities.

**status:** suggested
**Author:** Linda Gao
**Date:** 2026-11-02

### Answer 5

For cross-border payment and receipt compliance of transit trade, the CIPS (Cross-border Interbank Payment System) can be used to realize direct RMB settlement and avoid exchange rate fluctuation risks. For offshore account management, ensure that the account is only used for payment and receipt of transit trade, and avoid mixing with other businesses. For SWIFT message filling, fill in strictly in accordance with the message format for transit trade, clearly mark the words "transit trade" to avoid the bank misjudging it as general trade.

For foreign exchange settlement and account reconciliation, ensure that the amount and time of payment and receipt fully match the contract and bill of lading of the transit trade, to avoid inconsistency between capital flow and cargo flow. In abnormal cases, if encountering bank verification, immediately provide a full set of documents for transit trade to prove the authenticity of the transaction.

**status:** suggested
**Author:** Victor Sun
**Date:** 2026-11-02

### Answer 6

For legal risk avoidance of transit trade, force majeure clauses shall be clarified in upstream and downstream contracts, covering the division of responsibilities for special situations such as strikes at transit ports and epidemics. For cargo right transfer, clarify the transfer conditions and process of bills of lading to avoid cargo right disputes. For letter of credit terms, avoid soft clauses, such as "goods can only be released after confirmation by the buyer", to ensure the independence of the letter of credit.

For the use of letters of guarantee, if transit port guarantee is involved, select qualified banks to issue the letter of guarantee, and clarify the validity period, compensation conditions, etc. of the letter of guarantee. For intellectual property rights, ensure that transit goods do not involve infringement, and query the intellectual property registration information of the goods in advance to avoid customs detention at the transit port or destination port.

**status:** suggested
**Author:** Lucas Liu
**Date:** 2026-11-02

### Answer 7

For on-site inspection response of transit trade, prepare a full set of documents for transit trade in advance, including manifests, bills of lading, upstream and downstream contracts, settlement vouchers, etc., for customs inspection. For seal authenticity identification, check whether the seal number is consistent with the mark on the bill of lading.

If the seal is found damaged, take photos for storage immediately, and notify the transit port agent and customs. For unpacking inspection response, cooperate with customs inspection, truthfully inform the situation of the goods, and avoid customs detention caused by concealment.

For X-ray inspection operation, ensure that the cargo packaging meets the requirements of machine inspection, and avoid machine inspection abnormalities caused by packaging shielding. For test report handling, if the customs requires testing, cooperate immediately after receiving the test notice, and provide material certificates, MSDS and other information of the goods to shorten the test time.

**status:** suggested
**Author:** Michael Zhang
**Date:** 2026-11-02

### Answer 8

For supply chain structure optimization of transit trade, establish an inventory linkage strategy, adjust the inventory level at the transit port according to the order volume of transit trade, and avoid inventory overstock. For cost actuarial model, calculate all costs such as loading and unloading fees, port detention fees, insurance premiums at the transit port, compare the cost differences of different transit ports, and select the optimal transit port.

For trade term conversion, if the transit trade involves the conversion between FOB and CIF, clarify the division of responsibilities to avoid cost disputes. For international trade structure design, a transit trade subsidiary can be set up in the pilot free trade zone to enjoy the exclusive support policies of the pilot free trade zone and reduce the overall operation cost. At the same time, an abnormal early warning mechanism shall be established to monitor policy changes, logistics status, etc. of the transit port in real time, and adjust the supply chain strategy in advance.

**status:** suggested
**Author:** Evelyn Li
**Date:** 2026-11-02

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