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Comparison of Chinese free-trade zone and export processing zone

Item Free-trade zone Export processing zone
Corporate income tax 15% Same as on the left
Imported materials for processing Bond treated Same as on the left
Import of equipment and related materials Customs duty shall be exempted for production equipment, machinery, and office supplies necessary for the operation of those companies located in the zone Same as on the left
Business line Manufacturing company, trade, warehousing, logistics, and consulting Export processing-based manufacturing companies and those forwarders and warehousing companies who provide them with services only
Sales of the products outside the zone Domestic transport of the products is 100% permitted without obligation of minimum export quantity Selling more than 30% of the products outside the zone is not allowed because more than 70% of the products are required for export
Customs duty/value added tax imposed when selling outside the zone Sell the entire quantity of products manufactured outside the zone
-> Tax imposition

Those cases other than the above where the quantity, description, and price of imported raw materials contained in the products can be identified
-> Impose taxes on raw materials
Impose taxes on the products
Processing in the zone of raw materials from outside the zone VAT can't be refunded when cargo enter free trade zone unless cargo departed from China Value added tax shall be refunded when the raw materials are carried in the zone
Commission of processing to outside the zone Possible if the approval of the customs house is obtained Possible
Export of the products through the zone Possible to carry the cargoes outside the zone and into the zone and then export them as is Prohibited
Transport of the products in the zone A transportation company who has acquired a license in the free-trade zone and registered with customs undertakes the consignment An expert transportation company who has acquired a license from customs and is established in the zone undertakes the consignment
Storage limitation of bonded cargo Unlimited duration Semi-annual notification to the customs house is required
Bonded cargo control Bonded warehouse receiving register (EDI with the customs house) Export processing zone border crossing cargo record statement (EDI with the customs house)
Control system Free-Trade Zone Control Act The interim provisions on monitoring and controlling export processing zone

* The Free-Trade Zone Control Act is established in each individual free-trade zone and is not a law that covers all of the free-trade zones throughout China.
Data bank
Legal restrictions and taxation system
China Compulsory Certification (CCC)
Administrative Measures on the Import of Mechanical and Electrical Products
Administrative Measures on the Inspection and Supervision of Imported Used Mechanical and Electrical Products
Export and import duties
Regulations concerning packing materials
Intellectual property rights system at customs
Processing trade
Specific economic area
System of bank surety accounts
The CEPA (the Hong Kong /
Mainland Closer Economic Partnership Arrangement)
Certification of place of origin and export /
import procedures
The import of new chemical substances
The flow of export/import clearance
Distance between principal cities of each country
Comparison of Chinese free trade zone and export processing zone
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