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Can Trading Companies with Compliance Qualifications Agent Export Business of All Categories of Goods?
or complex compliance issues.
clearance and fund security.
I run a small solid wood furniture factory. I just received an order of 3 containers of oak dining chairs from a US client last month, with a total cargo value of nearly 800,000 RMB. I do not have my own import and export right. Previously, I could only do buy-out export through a freight forwarder, and I could not get the export tax refund of around 120,000 RMB at all, which was a huge unnecessary loss.
I contacted a trading company with 20 years of experience yesterday, and they said they can handle export agency for me. But I heard from peers before that some trading companies had goods detained during agency, and even absconded with the payment. Now I am very upset and have not slept well for two consecutive nights: I want to get tax refund and compliant export through them, but I am afraid of pitfalls.
For example, will they use non-compliant documents for customs declaration and cause cargo detention? Can they help me control the cargo title? Will the tax refund from agency export actually reach me? And if something goes wrong, will my factory be involved?
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
First of all，we need to reveal a common misunderstanding in the industry: many scalper agencies that advertise "trading company export agency" actually do not have formal import and export qualifications. They use buy-out export mode instead of compliant agency，and cannot provide documents that meet tax refund requirements.
If you fall into this misunderstanding，it will trigger a series of negative reactions: customs will detain the goods during inspection due to inconsistent document subject. For your solid wood furniture，if it stays at the port for more than 7 days，it will get damp and deform，and you will also incur high demurrage and storage fees，on the tax side，"inconsistency of four flows" will trigger a tax refund correspondence investigation. You will not only fail to get the 120,000 RMB tax refund，but also may be identified as tax evasion，facing a fine of 5%-10% of the cargo value.
Physical risk isolation measures: You should require the agent trading company to adopt dual-title customs declaration，mark your factory as the "notify party" on the cargo title document (bill of lading)，and designate a freight forwarder approved by you to handle logistics，so as to prevent the agent from controlling the cargo title.
Exclusive stop-loss tip: When signing a contract with the agent，clearly require all funds to flow through bank supervised account，and transfer the tax refund to your factory's corporate account within 3 working days after the tax refund arrives. Meanwhile，keep all original documents for at least 5 years for inspection.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
When trading companies conduct export declaration for agency business, they need to complete closed-loop document logic verification in advance, and focus on checking whether the cargo list, invoice, packing list provided by the principal match the agent's import and export operation right certificate and customs registration certificate, especially whether the HS code classification of solid wood furniture is accurate. If the classification is wrong, it will trigger a customs valuation dispute, and even require deletion and re-declaration, which affects the customs clearance efficiency.
In addition, the integrated customs clearance mode should be adopted for declaration to avoid declaration rejection caused by information asymmetry between local customs and port customs. If the declaration is held by customs, supplementary explanation materials should be submitted within 3 working days, and the agent should cooperate with the customs to complete the appointment and preparation for on-site inspection.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
For the logistics link of trading company export agency, priority should be given to locking direct routes to the United States to avoid the risk of cargo title out of control caused by transshipment. If transshipment is required due to space shortage, it should be clearly specified that the free storage period of the transit port is not less than 7 days. Meanwhile, the freight forwarder should be required to issue a bill of lading with your factory as the notify party, and the agent is prohibited from endorsing and transferring the bill of lading without permission.
In case of container rolling, the agent should coordinate with the freight forwarder to change space of another shipping company on the same route within 24 hours, and apply to the shipping company for demurrage reduction. In addition, the authenticity of the container seal should be confirmed before cargo loading, so as to avoid cargo damage or customs detention caused by tampered seal.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
When providing export agency services, trading companies can assist you in applying for the VAT deferral policy. Especially for goods destined for the US market, reasonable tax structure design can delay the payment of relevant taxes and alleviate your capital pressure.
In addition, cross-border related transaction pricing should be reasonably planned to avoid triggering BEPS investigation due to pricing deviating from the fair market value. For tax risk isolation, the tax subjects of the agent and your factory should be independently accounted.
The agent only charges a fixed agency service fee and does not participate in the profit distribution of the goods. Meanwhile, all tax vouchers including special VAT invoices, customs declarations, foreign exchange collection vouchers should be kept for inspection by tax authorities.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
For the foreign exchange collection and payment link of trading company export agency, the CIPS RMB cross-border payment system should be used for capital settlement to avoid interception of SWIFT messages due to sanction risks. For offshore account management, the agent is prohibited from using private accounts for foreign exchange collection and payment.
All funds must flow through corporate accounts. Corresponding documents such as customs declaration, contract and invoice should be provided for foreign exchange settlement to ensure consistency of four flows.
If you encounter difficulties in foreign exchange settlement and account reconciliation, supplementary materials should be submitted to the bank within 10 working days after foreign exchange collection. Meanwhile, optimize the timing of foreign exchange purchase, complete the purchase at a low exchange rate to reduce the exchange rate difference cost.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
The contract for trading company export agency should clearly specify the node of cargo title transfer: after the cargo is loaded on board and the on-board bill of lading is obtained, the cargo title transfers from your factory to the US client. The agent is only responsible for document transmission and compliant declaration. Meanwhile, a force majeure clause should be added as a guarantee.
If the cargo is detained at the port due to force majeure such as pandemic, port strike, the agent does not need to bear liability. In addition, you should require the agent to issue a Letter of Indemnity (LOI), promising not to dispose of the cargo or withhold funds without permission. If the agent breaches the contract, you can file a lawsuit with the court based on the LOI. Meanwhile, you need to complete the intellectual property customs protection filing to avoid goods being detained due to infringement.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
For the tax refund link of trading company export agency, pre-declaration verification should be completed in advance. Focus on checking whether the export date, cargo quantity and amount on the customs declaration are consistent with the special VAT invoice. If there is inconsistency of four flows, the documents should be adjusted within 5 working days after pre-declaration to avoid triggering tax correspondence investigation.
For capital reflux, the agent is prohibited from transferring tax refund funds to private accounts, and the funds must be directly transferred to your factory's corporate account. Documents for filing should be kept for at least 5 years, including customs declaration, contract, invoice, bill of lading, foreign exchange collection voucher, etc. If cross-month declaration is required, the tax refund declaration should be completed before the 15th of the next month to avoid late payment penalty.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
For supply chain planning of trading company export agency, the CIF trade term can be converted to FOB to transfer logistics costs to the US client, reducing the cost pressure on your factory. Meanwhile, establish an inventory linkage strategy, adjust the production plan according to the order cycle of the US client to avoid inventory backlog.
The cost accurate calculation model should cover agency service fee, customs declaration fee, logistics fee, tax refund amount, etc., and dynamically calculate the return ratio. If the agency service fee exceeds 3% of the cargo value, the agent's qualification should be re-evaluated. In addition, the international trade structure should be optimized, and the "agency + self-operation" mode should be adopted to reduce the risk of single business.