Introduction #
The 9810 model, officially known as the “Cross-Border E-Commerce Export to Overseas Warehouse” model, is one of the newer regulatory frameworks launched by China Customs. It was first piloted under Announcement No. 75 (2020) by the General Administration of Customs on June 12, 2020.
Under this model, e-commerce enterprises may export goods in bulk to overseas warehouses. Upon receipt of confirmed orders from foreign customers, the goods are dispatched directly from the overseas warehouse to consumers. The model is designed to simplify export procedures, improve logistics efficiency, and reduce costs—facilitating international market expansion for Chinese enterprises. However, compared to traditional cross-border export models, the overseas warehouse model raises unique legal and compliance concerns in areas such as logistics operations, taxation, and foreign exchange control. This article provides an in-depth analysis of the operational steps and the associated compliance challenges.
I. Operational Guidelines for Exporting via Overseas Warehouses #
The 9810 model follows a pre-positioned inventory structure, in which enterprises store goods in an overseas warehouse before final sale and dispatch. The main operational steps include:
1. Enterprise and Overseas Warehouse Registration #
Enterprises engaging in 9810 model transactions must be registered with the local customs office. They must also register their overseas warehouses in the customs system, providing detailed information including the warehouse’s location, scale, and operator. Registration information must be kept up to date to ensure accuracy and regulatory compliance.
2. Inventory Preparation and Shipment #
Based on sales forecasts and market demand, enterprises prepare goods and arrange shipment to designated overseas warehouses. This requires close coordination with logistics and warehousing providers regarding shipping volumes and timing. During preparation, enterprises must ensure product quality control, appropriate packaging, and compliance with destination country requirements (e.g., labeling, certification, safety standards).
3. Export Declaration and Foreign Customs Clearance #
Before shipment, the enterprise must complete export declarations with China Customs, providing essential product information such as product name, quantity, value, and certificates of origin. Upon arrival in the destination country, goods must be cleared through local customs. Enterprises should engage licensed customs brokers or agents to ensure compliance with local tariff and import regulations.
4. Inventory Management and Order Fulfillment #
Once goods are warehoused, enterprises manage inventory via the overseas platform’s system, monitoring stock levels, expiry dates, and order status in real time. Upon receiving orders through the e-commerce platform, the enterprise issues fulfillment instructions, and the overseas warehouse handles picking, packing, and delivery—enabling localized distribution.
II. Tax Compliance Issues #
Tax compliance is a central concern under the 9810 model. Exportation from China and subsequent sales in the destination country each trigger different tax obligations.
1. Export VAT Refunds #
In accordance with China’s VAT refund policy, exports to overseas warehouses may be eligible for VAT rebates. At the time of export declaration, the enterprise must submit supporting documents such as VAT invoices and export declarations to apply for the refund.
According to the State Taxation Administration’s “Operational Guidelines for VAT Exemption and Refund in Cross-Border E-Commerce Export to Overseas Warehouses”, there is a distinction between:
- Direct sales to foreign companies upon export (eligible for immediate VAT refund); and
- Inventory prepositioning followed by later sale to consumers, which allows for VAT refund based on actual sales data. Enterprises may choose to file VAT refund applications in one batch or multiple batches, and do not need to wait for complete sell-through of the shipped goods.
2. Local Sales Tax and VAT in the Destination Country #
Sales from overseas warehouses may constitute a local taxable supply, triggering tax obligations under the destination country’s domestic tax laws. For example, enterprises selling into the EU must register for and remit VAT. Enterprises should conduct a jurisdiction-specific analysis and complete local tax registration where applicable.
3. Double Taxation and Bilateral Tax Treaties #
Since exports from China benefit from VAT refunds and local sales may be subject to foreign tax, there is a risk of double taxation. Enterprises should explore the Double Taxation Agreements (DTAs) between China and the destination country to assess eligibility for tax credits, exemptions, or reduced withholding rates, thereby reducing overall tax burdens.
4. Transfer Pricing #
Tax compliance also includes proper transfer pricing for cross-border inventory transfers. Goods exported to overseas warehouses must be priced on an arm’s length basis. In related-party transactions, enterprises should prepare transfer pricing documentation to justify pricing and reduce the risk of tax authority audits in either jurisdiction.
III. Foreign Exchange Compliance Issues #
Export operations under the 9810 model often involve high-volume international payments and receipts. Ensuring foreign exchange compliance is essential to secure the legality of fund flows.
1. Foreign Exchange Receipt and Settlement #
Enterprises must complete foreign exchange receipt and conversion (settlement) within the statutory period following export. Payment may be received via e-commerce platform accounts or traditional banking channels. The amount and transaction data must match the export declaration records. Mismatches may trigger regulatory scrutiny by the State Administration of Foreign Exchange (SAFE).
2. Monitoring of Fund Flows and Reporting #
Under the inventory prepositioning model, goods may be sold in batches from the overseas warehouse. Enterprises must ensure that payment flows match corresponding sales records and inventory movements, maintaining comprehensive internal controls and reconciliation between logistics, sales, and financial data.
3. Anti-Money Laundering (AML) Compliance #
Given the frequency and volume of cross-border payments, enterprises must implement internal control mechanisms to prevent cross-border money laundering. This includes know-your-customer (KYC) checks, recipient verification, and real-time transaction monitoring, in accordance with China’s AML regulations.
4. Compliance in the Use of Third-Party Payment Platforms #
Third-party payment systems are widely used in overseas warehouse models. Enterprises must ensure that selected platforms comply with SAFE rules, particularly when using offshore payment platforms. All fund transfers must be fully recorded and traceable to legitimate commercial transactions. Non-compliant use of payment channels may result in penalties and disruption of fund settlement.
Conclusion #
The 9810 cross-border e-commerce export to overseas warehouses model offers significant opportunities for Chinese enterprises to expand into international markets. However, it introduces new challenges in taxation and foreign exchange management.
To remain compliant, enterprises must be well-versed in applicable export, tax, and currency regulations in both China and the destination market. By establishing sound internal compliance systems, maintaining proper documentation, and proactively communicating with customs, tax, and foreign exchange authorities, enterprises can mitigate legal risks and promote the sustainable development of their global e-commerce business.
This article is for informational purposes only and does not constitute legal advice. For case-specific consultation, please contact us. Read our full Legal Disclaimer, which also includes information on translation accuracy.
