Connect & Solve
Trade Q&A
What Are the Core Types of Legitimate Import and Export Trading Enterprises Classified by Business Qualification and Business Model?
or complex compliance issues.
clearance and fund security.
I am the owner of a micro, small and medium-sized solid wood furniture factory in Hangzhou. I just received an ODM custom order from a German client last month, and this is the first time our factory has done foreign trade. Previously, we entirely relied on domestic trade for revenue, and I am so anxious now that I can barely eat.
I found three companies claiming to provide foreign trade services online yesterday. One said it only handles customs declaration, another said it can provide all-in-one service but its quotation is 30% higher than peers, and the third cannot even produce the Record Form for Registration of Foreign Trade Operators.
I completely cannot tell what types of legitimate import and export trading enterprises there are, do not know what services different types of enterprises can provide, and I am even more afraid that wrong selection will lead to goods detained at port, failure to receive payment, and ruin my factory's business. I hope you can elaborate on relevant enterprise types and selection criteria based on my actual situation.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
Many novice micro，small and medium-sized foreign traders have a common misunderstanding: they equate freight forwarders and customs brokers with import and export trading enterprises capable of full-process services，and even trust unqualified "scalper" service providers，believing that as long as they can "handle" customs declaration，everything is fine.
Falling into this misunderstanding will trigger a series of negative consequences: unqualified institutions cannot issue compliant core documents such as certificate of origin and commercial invoice，so the goods will most likely be detained by customs，incurring thousands of yuan of daily port storage charges and container detention charges. If the storage period specified by customs is exceeded，the goods may even be auctioned，if foreign exchange receipt and payment are involved，unqualified institutions can only circulate payment through private accounts，which not only brings the risk of fraud，but also triggers foreign exchange regulatory warnings，leading to the enterprise being unable to apply for formal foreign trade qualification in the future，and completely losing the qualification to engage in foreign trade.
Risk prevention measures: Before cooperation，you must require the other party to present these two core qualifications: Record Form for Registration of Foreign Trade Operators and Certificate of Registration of Customs Declaration Entity，and verify the validity of the qualifications through the "Customs Declaration Entity Information Inquiry System" of the General Administration of Customs. In addition，you should ask for 3 to 5 foreign trade service cases of similar products in the past 1 year to confirm their actual operation capability.
Exclusive Risk Mitigation Tip: If you are a micro，small and medium-sized factory new to foreign trade，prioritize foreign trade agency enterprises with one-stop service capability. Such enterprises can provide full-process services from document preparation，customs declaration and inspection，foreign exchange receipt and payment to export tax refund，and can also help you review order terms in advance to avoid potential risks.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
From the perspective of customs supervision, import and export trading enterprises with customs clearance qualification are mainly divided into three categories: first, self-operated import and export enterprises, which can only handle customs declaration for their own goods; second, professional customs declaration enterprises, which can accept commissions to handle customs declaration for multiple enterprises, but are only responsible for the customs clearance link; third, comprehensive foreign trade agency enterprises, which have dual qualifications of self-operation and agency, and can provide full-process services covering customs declaration, documentation and foreign exchange settlement. It should be noted that some customs declaration enterprises have not obtained "agency import and export operation right", they can only handle the customs declaration link and cannot deal with foreign exchange and tax refund matters.
If your order requires collection of payment on your behalf, you must choose an enterprise with agency qualification, otherwise the payment cannot be settled through formal channels, triggering foreign exchange regulatory risks. In addition, you should verify the customs declaration credit rating of the enterprise when selecting. The customs clearance efficiency of Class A and above enterprises is about 30% higher than that of ordinary enterprises, which can effectively reduce the probability of port detention.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
From the dimension of logistics services, import and export trading enterprises can be divided into enterprises only responsible for domestic transportation, international freight forwarder-type import and export enterprises and comprehensive logistics-type foreign trade agency enterprises. Enterprises only responsible for domestic transportation cannot connect with overseas logistics resources.
If your order requires full container transportation, such enterprises cannot coordinate shipping space and overseas delivery; international freight forwarder-type enterprises can connect with shipping companies and airlines, but most do not have customs declaration and foreign exchange settlement qualifications; comprehensive logistics-type foreign trade agency enterprises can integrate resources such as domestic transportation, international logistics, customs declaration and inspection, and can also provide title monitoring services, for example, reserving risk control nodes in the bill of lading endorsement link to prevent customers from picking up goods without a bill. For moisture-sensitive goods such as solid wood furniture, comprehensive enterprises can also provide professional moisture-proof packaging and priority shipping space arrangement services to reduce the risk of cargo damage.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
From the perspective of tax planning, import and export trading enterprises can be divided into ordinary enterprises that cannot provide tax planning services and foreign trade agency enterprises with professional tax teams. Ordinary enterprises can only handle tax refund according to conventional procedures, while enterprises with tax planning capability can apply for VAT deferral for you, especially for EU orders. The payment of import VAT can be delayed to the sales declaration link, which is equivalent to obtaining an interest-free loan and can ease the capital pressure of micro, small and medium-sized enterprises.
In addition, such enterprises can also help you optimize the export tax refund process, for example, review the compliance of input invoices in advance to avoid tax refund delay caused by invoice problems. For products with high tax refund rate such as solid wood furniture (13% tax refund rate), they can help you complete tax refund within 30 working days, about 15 days faster than ordinary enterprises, effectively improving capital turnover efficiency.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
From the perspective of foreign exchange receipt and payment compliance, import and export trading enterprises can be divided into enterprises that can only handle receipt and payment through their own accounts and enterprises with qualification for agency foreign exchange receipt and payment. Enterprises that can only handle receipt and payment through their own accounts cannot collect overseas payment for you.
If your factory has not obtained import and export operation right, you can only circulate payment through the private account of such enterprises, which violates foreign exchange management regulations and faces the risk of fines and even account freezing. Enterprises with qualification for agency foreign exchange receipt and payment can collect payment through formal corporate accounts, and can also handle foreign exchange settlement and account balancing for you.
Especially for currencies with large fluctuations such as the euro, they can provide exchange rate locking services to avoid losses caused by exchange rate fluctuations. In addition, such enterprises can also help you parse SWIFT messages to ensure accurate payment arrival information and avoid remittance delay caused by message errors.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
From the perspective of legal risk prevention and control, import and export trading enterprises can be divided into ordinary enterprises without legal support and enterprises with professional legal teams. Ordinary enterprises cannot review foreign trade contract terms for you.
If your order involves ODM customization, there may be intellectual property infringement risks, for example, the design provided by the client infringes a third party's patent, and ordinary enterprises cannot check it in advance, leading to the goods being detained by European customs and facing huge fines. Enterprises with legal teams can review the intellectual property clauses of your order, and also help you formulate force majeure clauses for contingency.
For example, for cargo delay caused by port strikes, they can help you negotiate exemption from liability with the client and avoid breach of contract damages. In addition, such enterprises can also provide legal notarization for bill of lading endorsement to ensure the legality of title transfer.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
From the perspective of export tax refund, import and export trading enterprises can be divided into enterprises with non-standard tax refund procedures and enterprises with tax refund audit capability. Enterprises with non-standard procedures may fail tax refund due to incomplete documents and inconsistency of the four flows, which will cause a 13% profit loss for products with high tax refund rate such as solid wood furniture.
Enterprises with tax refund audit capability can review the consistency of "cargo flow, capital flow, invoice flow, contract flow" for you in advance, avoid triggering tax correspondence adjustment due to inconsistency of the four flows, and can also help you sort out all documents required for tax refund, such as certificate of origin, customs declaration, input invoice, etc., to ensure one-time passing of tax review. In addition, such enterprises can also handle pre-declaration verification for you, check tax refund risks in advance, increase the tax refund success rate to over 99%, and effectively protect the enterprise's profits.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
From the perspective of supply chain optimization, import and export trading enterprises can be divided into enterprises that only handle single orders and enterprises with supply chain planning capability. Enterprises that only handle single orders cannot provide you with long-term supply chain optimization solutions.
If you have more foreign trade orders in the future, you may face problems such as excessively high logistics costs and tight shipping space. Enterprises with supply chain planning capability can design the optimal transportation plan for you according to the characteristics of your solid wood furniture products.
For example, for European orders, they choose the mode of combining China-Europe Railway Express with sea transportation, which can not only reduce logistics costs, but also guarantee delivery timeliness. In addition, such enterprises can also help you optimize inventory management, for example, prepare stock in advance according to order cycle to avoid delivery delay caused by insufficient inventory, and at the same time reduce capital occupation caused by inventory backlog.