Bonded Warehouse

A bonded warehouse is a warehouse operated by a private company in a foreign country under the regulatory supervision of that country’s customs agency. Its main advantage is to defer the payment of customs duties. Like a standard warehouse, bonded warehouses let businesses store their goods closer to foreign customers for faster delivery, with the advantage of pushing out the payment of custom duties until the goods are released from the bonded warehouse. They are used for storing imported or exported goods.Goods stored in a bonded warehouse can be modified onsite for the local market. These modifications can include:

• Labelling
• Marking
• Testing
• Packaging
• Dilution
• Grading
• Service and maintenance

Inspection of the goods can also be performed in the bonded warehouse.

More about bonded warehouses

The following example illustrates how bonded warehouses work.ABC Company ships goods frequently to Romania. It uses a warehouse in Romania to store the goods until they are sold to local customers. ABC Company has to pay custom duties upon entry of the goods to Romania. Changing to a bonded warehouse would have a positive financial impact for ABC Company because it would allow it to only pay duties when a sale is made to a Romanian customer and the goods leave the bonded warehouse.