Does processing with supplied materials count as entrepot trade?
Solved#Entrepot trade#
I'm not very clear about trade methods and would like to consult you all. Does processing with supplied materials count as entrepot trade? I know that in processing with supplied materials, foreign merchants provide raw materials, etc., and domestic enterprises process according to requirements and return the finished products to foreign merchants. And entrepot trade seems to be that the production place and consumption place of goods do not trade directly, but are transferred through a third place. But I'm still not sure whether processing with supplied materials can count as entrepot trade. I hope friends who know the business can give an answer.
Professional consultant answers
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
Processing with supplied materials does not count as entrepot trade. There are essential differences between the two.
First of all, the transaction modes are different. Processing with supplied materials is a commissioned processing relationship. Foreign merchants provide raw materials, etc., and domestic enterprises process according to requirements, charge processing fees, and return the finished products to foreign merchants. For example, a foreign company provides fabric, and a domestic factory processes it into clothes and then delivers them. While entrepot trade is that goods are exported from the producing country to a third country, and then resold from the third country to the consuming country. The third - country enterprise earns the price difference, such as toys produced in China are first shipped to Singapore and then sold to American customers from Singapore.
Secondly, in terms of the ownership of goods, during the processing with supplied materials, the ownership of raw materials and finished products belongs to foreign merchants, and domestic enterprises only have the right to process. In entrepot trade, when the goods are in transit in the third country, the third - country entrepot trader obtains the ownership of the goods. So, from these two aspects, processing with supplied materials does not count as entrepot trade.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
No, it doesn't. The focus of processing with supplied materials is on processing and manufacturing. Domestic enterprises mainly utilize the labor - force advantage for processing. The focus of entrepot trade is on trade circulation. Third - country enterprises utilize geographical location, policies, etc., advantages to do reselling. The business cores of the two are different.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
The differences between processing with supplied materials and entrepot trade are obvious. Processing with supplied materials mainly involves the processing link and earns processing remuneration. Entrepot trade is a pure trading behavior and makes a profit by the price difference of reselling. So, processing with supplied materials does not belong to entrepot trade.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Definitely not. In entrepot trade, the goods transportation will have stops, storage, etc., in the third place. While in processing with supplied materials, the goods go directly from foreign merchants to domestic processing enterprises and then back to foreign merchants, without this process of being transferred through a third place.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
No. Processing with supplied materials is a processing business. Domestic enterprises are equivalent to contract manufacturers. Entrepot trade is a trading business, involving the transfer and transaction of goods between different countries. The natures are different.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
It can also be seen from the tax perspective. The processing fees of domestic enterprises in processing with supplied materials are tax - exempt, while in entrepot trade, various taxes and fees may be involved in the entrepot link. So, processing with supplied materials is not entrepot trade.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
No. Processing with supplied materials involves processing contracts, etc. Entrepot trade involves more trading contracts. The handling documents and processes are different, which also shows that the two are different.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
It can't be counted. Domestic enterprises in processing with supplied materials work according to the requirements of foreign merchants. Entrepot trade is that third - country traders actively seek business opportunities. The operation modes are quite different.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
No. Processing with supplied materials enterprises mainly invest in processing labor services. Entrepot trade enterprises invest in trade resources, channels, etc. The investment directions are different.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
No. Entrepot trade emphasizes the transfer of goods, while processing with supplied materials emphasizes processing and production. Obviously, they are not the same thing.