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Trade Q&A
Does Thailand have policy support and mature logistics supporting conditions for developing entrepot trade?
or complex compliance issues.
clearance and fund security.
I am the person in charge of a domestic foreign trade enterprise specializing in the export of hardware and building materials. Recently, the European Union has imposed an anti-dumping duty as high as 65% on our flagship products, which has completely eroded our already thin profit margins. I have stayed up for a whole week looking for solutions.
I heard from peers in southern China before that entrepot trade can avoid trade barriers, but I have only used entrepot trade channels in Malaysia and am completely unfamiliar with the situation in Thailand. I want to clarify whether entrepot trade is feasible in Thailand at all? Will there be policy compliance risks?
Our goods are heavy building materials, so how is the transit efficiency and storage cost of Bangkok Port? If customs detention or port detention occurs during transit, is there a practical loss mitigation plan? In addition, can the third-country certificate of origin required by customers be issued in compliance with regulations in Thailand?
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
First of all，Thailand fully has the compliance foundation for carrying out entrepot trade. Its customs implements the "bonded transit" supervision mode for transit goods. Bangkok Port and Laem Chabang Port are both core transit hubs in Southeast Asia with mature logistics supporting facilities，which can meet the transit needs of various types of goods.
Pre-document Review Details: The original certificate of origin，commercial invoice and packing list of the goods shall be verified in advance to ensure no logical conflict with the third-party documents for transit in Thailand，meanwhile，it shall be confirmed that the third-country certificate of origin required by customers can be issued in compliance with regulations by formal chambers of commerce or the Council for the Promotion of International Trade in Thailand，and qualification materials shall be submitted 3-5 working days in advance for pre-review to avoid process delays caused by document inconsistency.
Core Node Connection: After the goods arrive in Thailand，an agency company with bonded warehouse qualification shall be entrusted to handle the warehousing procedures，and the goods shall be prevented from entering the Thai local market throughout the process，and the transit time shall be controlled within 7-10 working days，the bill of lading shall be order bill of lading，combined with blank endorsement to ensure the controllability of cargo ownership and avoid the risk of cargo ownership loss.
Contingency Plans: In case of random inspection by Thai customs，a full set of transit supporting documents (such as transit contract，pre-allocated manifest information，booking confirmation for subsequent voyages) shall be prepared in advance，and the agency company shall assist in inspection communication，if there is a risk of port detention，you can apply for extending the free storage period of the bonded warehouse to 14 days in advance to reduce additional expenses.
The final compliance implementation shall ensure the consistency of goods，documents and certificates. All documents shall be filed for more than 3 years for customs retrospective verification，so as to avoid subsequent compliance risks.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
For the customs declaration link of Thailand's entrepot trade, attention shall be paid to the consistency of customs code classification of goods. The customs code of the original goods shall strictly match the code on the documents issued for transit in Thailand, so as to avoid valuation disputes caused by code differences.
If the customs questions the transit attribute of the goods, supporting documents such as transit manifest, storage agreement and booking confirmation for subsequent voyages shall be provided to prove that the goods have not entered the local circulation in Thailand. In addition, the special declaration code for "entrepot declaration" shall be used, and declaration under general trade is strictly prohibited, otherwise it will be regarded as imported goods and subject to tariff and value-added tax, and may also trigger subsequent tax correspondence investigations.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
For the logistics route of Thailand's entrepot trade, priority shall be given to the bonded transit warehouse of Laem Chabang Port rather than the ordinary yard of Bangkok Port. The bonded warehouse of Laem Chabang Port has 24-hour operation capacity, with transit efficiency 30% higher than that of Bangkok Port, and the free storage period can be extended to 14 days.
Before the goods arrive at the port, confirm the "direct transit" operation with the shipping company in advance to avoid additional storage costs caused by the goods entering the ordinary yard; the bill of lading shall be made out to order with blank endorsement to ensure that the cargo ownership can be transferred to the final buyer at any time. If the container is rolled over, lock the spare space with the agency company in advance, and the transit time will be delayed by up to 2 working days to avoid affecting the final delivery date.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
The core of taxation for Thailand's entrepot trade is to ensure that the goods do not enter the Thai local market, so there is no need to pay Thai value-added tax and import tariff, but the "Entrepot Trade Tax Filing Form" shall be submitted to the Thai customs, and tax exemption can be enjoyed after filing.
If the enterprise is involved in related party transactions, it shall ensure that the pricing of transit service fees conforms to the arm's length principle, so as to avoid triggering BEPS (Base Erosion and Profit Shifting) investigations. In addition, Chinese enterprises can repatriate the profits from entrepot trade back to China through compliant channels, without paying corporate income tax in Thailand, and a full set of transit documents shall be kept as proof of tax compliance.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
The receipt and payment of foreign exchange for Thailand's entrepot trade shall go through compliant cross-border payment channels. If RMB settlement is adopted, the CIPS system can be preferred to ensure the traceability of the capital path.
It is necessary to avoid using offshore accounts for document-free foreign exchange receipt and payment, otherwise it will be listed as a suspicious transaction by the Thai financial regulatory authority, triggering the risk of account freezing. In addition, it shall be ensured that the amount of foreign exchange received and paid is strictly consistent with the amount on the transit documents, and the difference shall not exceed 5%, otherwise it will be regarded as an abnormal transaction, and additional supporting documents shall be submitted for explanation.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
The contract for Thailand's entrepot trade shall specify the "transit responsibility division" clause, stipulating that the agency company shall bear the responsibility of cargo ownership custody during the period when the goods are in Thailand. In case of cargo damage or loss, compensation shall be made according to the CIF value of the goods. In addition, the "force majeure bottom-line clause" shall be added to the contract.
If transit cannot be carried out due to policy changes in Thailand, the agency company shall assist in handling the procedures for returning the goods to China, and the relevant expenses shall be borne by both parties according to the agreed proportion. At the same time, the authenticity of the certificate of origin issued by Thailand shall be verified to avoid legal disputes caused by false documents.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The inspection rate of transit goods by Thai customs is about 5%-10%. The focus of inspection is whether the physical properties of the goods are consistent with the description on the documents.
Materials such as sample photos of the goods and MSDS (for dangerous goods) shall be prepared in advance. In case of devanning inspection, the agency company shall arrange a qualified customs broker to accompany on site to avoid cargo damage caused by improper operation.
In addition, it shall be ensured that the seal of the goods is a one-time customs seal, and the use of ordinary seals is strictly prohibited, otherwise it will be considered that the goods may be swapped, triggering the risk of customs detention. If the inspection result is abnormal, the appeal materials shall be submitted within 3 working days, otherwise the goods will be forcibly returned or auctioned.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
If the transit goods are heavy building materials or dangerous goods, the packaging standards meeting the requirements of Thai customs shall be adopted. Heavy building materials shall be reinforced with wooden pallets, and the size of the pallets shall meet the requirements of the loading and unloading equipment of Laem Chabang Port, so as to avoid loading and unloading delays caused by size mismatch.
For dangerous goods, the UN dangerous goods packaging certification of Thailand shall be handled in advance to ensure that the dangerous goods marks on the packaging are clear and accurate, and the Thai translation of MSDS shall be submitted at the same time, otherwise the goods will be refused entry into the warehouse. In addition, the English mark "Transit Goods, Not for Sale in Thailand" shall be marked on the packaging to avoid being regarded as imported goods.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
For goods of Chinese enterprises engaged in entrepot trade via Thailand, if the original goods are of Chinese origin, it shall be ensured that the trade mode on the original export declaration form is "entrepot goods" rather than general trade, otherwise export tax refund cannot be enjoyed.
A full set of transit documents (including Thai certificate of origin, transit contract, copy of bill of lading) shall be kept as supporting materials for tax refund review, so as to avoid triggering tax correspondence investigation due to incomplete documents. In addition, it shall be ensured that the interval between the foreign exchange receipt time and the declaration time of the export declaration form shall not exceed 180 days, otherwise it will be regarded as no foreign exchange received, and tax refund cannot be handled.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
The supply chain planning for Thailand's entrepot trade shall give priority to the balance between transit cost and timeliness. The transit cost of Laem Chabang Port is 20% lower than that of Singapore, but the timeliness is 3-5 working days slower than that of Singapore, which is suitable for cost-sensitive goods. For high-value goods, the fast transit channel of Bangkok Port can be selected, and the transit time can be controlled within 5-7 working days, but the cost is relatively high.
In addition, an inventory linkage mechanism shall be established to predict the fluctuation of transit time in advance, so as to avoid inventory shortage of the final buyer caused by transit delay. At the same time, the transit risk can be partially transferred to the agency company by adjusting the trade term to CIF (Thailand transit port).