What are the benefits of customs warehousing? 

Did you know that customs warehousing is an effective and strategic solution that will help you completely transform your import and export process?  

What is customs warehousing? 

Imagine your company imports articles from other countries, and you sell them here or send them to different places. 

 
When these products reach the port or airport, you have to pay taxes and duties for them, right? Well, there is a way for you to save money and time: by using a customs warehouse. 

 
While the products are there, the company depositing them is not required to pay taxes or duties. This only applies when they reach their final destination. 

 
This is the case of importers handling top-value products, which are not sold quickly, and which is why they make use of the customs warehouse. 

 
Those involved in international trade, known as trading companies, regularly use the option too. They can have stock in a particular country and then export it somewhere else or sell it in the same country. 
 

How does a customs warehouse work 

Imagine that a business acquires a large quantity of electronic products from China. 

When they reach the country of destination, the goods are stored in a customs warehouse. During this time, they are exempt from paying taxes and duties, which helps the business set up a sales and marketing strategy before having to bear the tax costs. 

Consequently, the basis of its operation is as follows: 

• Request authorization. To do so, an application containing data on the company and the goods is submitted. You will also need to meet the requisites concerning financial soundness, financial guarantee and technical capacity. 
• Choose the type of warehouse. This depends on who the owner is and the type of goods to be stored. The most common are as follows: 
• Public. Managed by an authorized public or private company, where anybody can store their products following payment of a tariff. 
• Private. Administered by the importer or exporter of the goods. 
• Free. It is situated in a customs-free zone, where goods from third countries with tax benefits can be stored. 
• Submit the declaration. Indicate the data on the goods, the type of warehouse and the expected duration of their stay. It may be electronic or on paper, depending on the country. 
• Keep the accounting record and control. The aim is to reflect product entries, exits and movements. You must keep it for at least three years and submit it to the authorities if so required. 
• Give the goods a final destination. When you wish to remove the goods from the warehouse, you must give them a final destination, such as: 

1. Local market. In this case, you must pay the corresponding taxes and duties and submit an import declaration to customs. 
2. Reexport to another country. There is no need to pay any tax or duty, but you do need to submit an export declaration. 
3. Destruction. You do not need to pay any taxes or duties, although you are required to submit a destruction declaration to the authorities. 

 
As you can appreciate, the operation is quite straightforward and offers many benefits for managing goods without having to pay taxes and duties until you actually need to. 

  
Benefits of customs warehouses 

 
The benefits of customs warehouses include savings in money, optimization of the stock and the capacity to adapt to market fluctuations. Among them are: 

• Savings. The company is not required to pay taxes or duties for their imported products until they are removed from the warehouse and taken to the local market or another country. 
• Optimization. By using a customs warehouse, businesses are given the possibility to keep more efficient control of their inventory, as they are aware at all times of their availability and location. 
• Adapting to fluctuations. Above all, because markets respond rapidly to changes in demand, supply or competition. 

 
For example, if there is a business opportunity in another country, you can send your products from the warehouse without having to go through the local market. 

Or if there is an economic or political crisis in your country of destination, you can keep your products in the warehouse until the situation is rectified. 

• Flexibility in the storage period. Because you can store the products for an unlimited period of time (except for perishable goods). 
• Access and the possibility to carry out additional processes. Although the goods are in custody in the customs warehouse, businesses are authorized to improve the packaging or labelling, make inspections regarding quality or even move them to another customs warehouse. 
• Gradual removal of the goods. It is particularly useful when demand for the products fluctuates or depends on the season. For example, a business importing toys can cover the demand during the Christmas season, and then remove the rest of the stock gradually. 
• Agility in deliveries. Instead of sending products directly from the country of origin, companies are given the option to do so from the customs warehouse, as they have stock which allows them to reduce transit times and improve efficiency in the supply chain. 

Customs warehousing and tax warehousing or temporary warehousing? 

A customs warehouse is a warehouse administered by the authorities where goods from abroad can be stored. 

 
On the other hand, though the tax warehouse is also a warehouse regulated by the government, it is used to store national or imported products with the aim to postpone the payment of taxes and duties until they are actually sold. 

 
In the case of temporary warehousing, its main objective is the momentary reservation of goods in transit. It is used when the goods arrive in a country but have yet to be dispatched or sent to their final destination. 

 
This alternative allows you to keep the goods under customs supervision while you comply with the necessary formalities for their release or transport. 

Conclusion 

 
Customs warehousing offers a wide range of benefits allowing you to optimize your operations, improve your cash flow and keep strategic control of your stock lists. 

 
You no longer have to worry about paying taxes and duties immediately, as you have the option to defer payment until your products are distributed. 

 
Do not miss the opportunity to avail of all these benefits. 

 
Get in touch with us today to find out more about how customs warehousing can benefit your business.