Import Goods For Re-Export

[bjohn34]

Does anyone here have experience or knowledge about importing unfinished goods into Thailand, performing the finishing operations here and then re exporting?

Specifically, this would be goods imported from China, additional manufacturing done in Thailand and then exported to Europe and North America.

1. Can this be done outside one of the specific export processing zones?

2. How difficult are the customs, tax and book keeping requirements?

Any other information greatly appreciated.

thanks

[liveinlos]

When you take a look at the customs tax and shipping, you will find it is probably not worth it

Customs will eat up at least 20% and shipping on top of that the get the items to Thailand.

Then the goods sold from Thailand require tax to be paid on the sale

One thing interesting to note.

I read an article from one of the big business men in Bangkok's Chinatown.

He claims they float all the goods from China by river down into Chinatown, not paying any import or customs tax at all

Example

He sends 10 chairs down at $100 each or $1,000 total

You send the same 10 chairs ( if got the same price in China $100 as he did) you have $100 +$20 import/customs tax or $120 in each chair plus shipping.

The Chinese guy sells his chairs for $120 each wholesale

You have $120 each plus shipping in each of your chair so there is no way you can beat his price

The reality is even worse as maybe as a foreigner you could not get the same $100 price but maybe $110 or $120 cost from China

If everyone was on the same level playing field, it would be easy for everyone to make some money

However, you see the Chinese are all super rich in Thailand and no one else is making a thing from China because they get around the import/customs charges

Chinatown, if you have ever spent anytime there at all, is the major supplier to every single Thai vendor you see selling anything

The Chinese can offer goods to Thais wholesale, cheaper than Thais can buy, import and ship to Thailand themselves

(All you ebayers and small potatoes this is not about you, talking about big business)

These impossible situations is why only a few get rich in this country

They have stacked all the rules in their favor

Show me one BIB that would move against Chinatown?

Because they simply do not dare to touch that

[raro]

Apart from what Chinese traders may do in Chinatown, there are also several legal ways that meet the OP's requirements:

1) EPZ. You bring your goods into an EPZ (Export Processing Zone). Those areas are specifically made for exactly the purpose the OP is looking at. No duties/taxes to be paid and products can be exported.or sold locally after manufacturing. The latter is a tad more complicated but feasible.

2) BoI. Depending on what you are doing and how much you are willing to invest, you can obtain BoI privileges. This can (or cannot....depends!) also include duty-free importing of raw materials.

3) Biz19 privileges: Some sort of small-scale BoI privileges. Also here, the import of raw materials can be duty-free, provided that you export after.

4) temporary import: not suitable for regular shipments, but a practical solution for case by case imports for repair etc.

Feel free to PM me for more info.

[raro]

sorry....forgot to answer the paperwork question...

EPZ and temp import probably easiest, BoI and especially biz19 is a bit of a headache and only worthwhile for large volumes.

[CWMcMurray]

Since the goods are coming from China, here is one more idea...

Contact a customs broker and find out what the actual import duty of the goods would be under the general rate and under the Asean / China FTA rate.

If any duty privilege can be gained under the FTA, find a supplier that can issue FORM E.

Just as an Fyi ... many (but not all) items are covered under this FTA and there are a large number of items that will have a reduced import duty rate of 0%

[xbusman]

We do that at my company. Import a variety of things for our manufacturing process from a variety of countries.

You can draw back Customs duties and exports are exempt from VAT which you can also draw back. Thats what the law states anyway.

With meticulous record keeping and keeping everything above board, my experience over the years is that you get about 70 percent back over time. Generally, they keep my money for up to a year.

Tax offices are local, be very very careful where you locate your business. For example, Bang Khen was a pleasure to deal with and we generally got back 100% of VAT draw back while Wang Thong Lang is all but impossible. We get back less than 10 percent what is owed us from that office.

When dealing with Customs, just consider it a cost of goods sold, the return rate is sporadic and you occasionally have to bribe them just to do their job. At best its a complete write off. If its anything of value, often it just wont make it through....