Whether entrepot trade requires foreign exchange purchase and settlement depends on the specific business situation.
If in entrepot trade, you receive foreign currency payment, and what you need to pay to the upstream supplier is also foreign currency, and at the same time there is sufficient funds in your local currency account, then you can make the payment directly in foreign currency without purchasing foreign exchange. However, if you receive local currency payment while payment to the upstream requires foreign currency, you may need to purchase foreign exchange.
Regarding settlement, if the foreign currency payment you receive does not need to be used for external payment anymore and you want to convert it into RMB for domestic use, you need to settle. For example, you purchase goods from Company A abroad, resell them to Company B abroad, and receive US dollar payment from Company B. If you have no subsequent need for US dollar payment, you can convert the US dollars into RMB through settlement. In short, the foreign exchange purchase and settlement in entrepot trade need to be judged according to the actual situation such as the currencies of receipts and payments and the company's capital arrangements.
Professional consultant answers
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
Whether entrepot trade requires foreign exchange purchase and settlement depends on the specific business situation.
If in entrepot trade, you receive foreign currency payment, and what you need to pay to the upstream supplier is also foreign currency, and at the same time there is sufficient funds in your local currency account, then you can make the payment directly in foreign currency without purchasing foreign exchange. However, if you receive local currency payment while payment to the upstream requires foreign currency, you may need to purchase foreign exchange.
Regarding settlement, if the foreign currency payment you receive does not need to be used for external payment anymore and you want to convert it into RMB for domestic use, you need to settle. For example, you purchase goods from Company A abroad, resell them to Company B abroad, and receive US dollar payment from Company B. If you have no subsequent need for US dollar payment, you can convert the US dollars into RMB through settlement. In short, the foreign exchange purchase and settlement in entrepot trade need to be judged according to the actual situation such as the currencies of receipts and payments and the company's capital arrangements.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
Generally speaking, if entrepot trade involves receipts and payments in different currencies, foreign exchange purchase and settlement may be required. For example, if the income is in euros and the expenditure is in US dollars, then the corresponding foreign exchange purchase operation needs to be carried out.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
If both receipts and payments in entrepot trade are in the same foreign currency, and the enterprise has no need to convert the foreign currency into local currency, usually no foreign exchange purchase and settlement are required, and the direct foreign currency flow will do.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
If the enterprise has a profit in entrepot trade and wants to convert the foreign currency profit into local currency for domestic operations, etc., settlement will be involved in this case.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
If the capital flow of the enterprise's entrepot trade is relatively simple, and the receipts and payments can be directly matched and the currencies are the same, foreign exchange purchase and settlement will hardly be used.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
When the enterprise needs to use local currency to pay domestic expenses in entrepot trade, but receives foreign currency payment, settlement may be required.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
If in entrepot trade, the enterprise has negotiated with the upstream and downstream about the currencies of receipts and payments, and they are all the currencies of the enterprise's commonly used accounts, foreign exchange purchase and settlement may not occur.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
If the enterprise is to balance its foreign exchange position, even if the currencies of receipts and payments in entrepot trade are the same, it may also carry out foreign exchange purchase or settlement operations.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
When the enterprise needs to pay a specific supplier in a certain foreign currency in entrepot trade, but only has other foreign currencies or local currency on hand, foreign exchange purchase is required.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
If the entrepot trade enterprise wants to enjoy the benefits of exchange rate fluctuations, it may also actively carry out foreign exchange purchase and settlement operations.