A bonded warehouse is a facility located in a special customs zone. Sales from this warehouse are tax-exempt, and Chinese companies are eligible for a VAT export refund once goods are shipped to the warehouse. For mainland sellers, this means direct cash flow: VAT is refunded, and you do not pay it upon export.
How the mechanism works
- Goods are shipped to an Ozon bonded warehouse (CEL Hunchun 1, Xingyuan Suifenhe 2, RETS Harbin 1, etc.)
- Shipment to a bonded warehouse counts as an export for Chinese tax authorities
- Mainland companies process VAT refunds at the export rate
- Sales are made from the warehouse without additional tax; Hong Kong, being VAT-exempt, supplies goods without VAT
Economic benefits
- VAT refunds provide additional margin for companies under the general tax regime
- Warehouses near the border ensure shorter delivery times to the buyer
- Goods are closer to the market: replenishment is faster than shipping from deep within China
For small businesses on the 1% preferential VAT rate, the benefit of a refund is minimal. This scheme is primarily of interest to companies under the general regime with 13% VAT: how tax regimes work.
Bonded warehouse network
| Warehouse | Location | Schedule |
|---|---|---|
| CEL Hunchun 1 Bonded | Hunchun, Jilin | 8:30–17:30, Sun — closed |
| Xingyuan Suifenhe 2 Bonded | Suifenhe, Heilongjiang | open daily |
| RETS Harbin 1 Bonded | Harbin | 8:30–19:00 |
| DEX Dubai 1 DAFZA | Dubai, UAE | Mon–Sat 10:00–22:00 |
Frequently asked questions
Is the bonded scheme suitable for small businesses on the 1% VAT rate?
Usually no: the export VAT refund is beneficial under the general regime with 13% VAT. At the 1% preferential rate, the benefit is symbolic, while the documentation requirements for bonded shipments are significant. Calculate before, not after.
How does a bonded warehouse differ for the buyer?
There is no visible difference: the order follows the same routes. The difference lies in the tax status of the goods for the seller and the speed of replenishment: the goods are already at the border.
Can I transfer goods from a standard warehouse to a bonded one?
These are different schemes and require separate shipments. A change is a new bonded shipment with its own documentation, not a "transfer" between warehouses.
What are the financial advantages of using a bonded warehouse for my business?
Using a bonded warehouse allows mainland companies under the general tax regime to receive a VAT export refund, which provides additional margin. Furthermore, sales from these facilities are tax-exempt, improving your direct cash flow.
Which companies benefit most from the bonded warehouse scheme?
This scheme is primarily intended for companies under the general tax regime with 13% VAT. For small businesses on the 1% preferential VAT rate, the benefit of a refund is minimal compared to the documentation requirements.
How does shipping to a bonded warehouse affect delivery times for buyers?
Bonded warehouses are located near the border, which ensures shorter delivery times to the buyer. Because the goods are closer to the market, replenishment is also faster than shipping from deep within China.
What should I know about the first shipment to a bonded warehouse?
The first bonded shipment takes longer than a standard one because you must account for verification time. Bonded warehouses have specific requirements for documentation and company status that the dashboard verifies when you create an application.