A bonded port is an area within a conventional port in which goods can be processed and manufactured without being considered imports. Dayaowan Port, located in the Dalian Development Zone, has recently received approval from the State Council to operate as a bonded port.

From an operational point of view, this designation will provide the following advantages for companies locating there.

1. There will be minimal customs procedures carried out on material imported into the zone, processed and then re-exported. Notifying the customs authorities of arrival and departure of materials is adequate under normal circumstances. Customs duty will only be payable on the portion of produce that is brought out of the port area for import into mainland China. This is considerably more advantageous than companies located in the present Free Trade Zone and Export Processing Zone. As they are not connected directly to the port, goods produced in these areas have to go through more rigorous customs procedures. This has implications for both cash-flow and turnaround time.
2. VAT will not be levied on goods processed in the Bonded Port and then re-exported.
3. The manufacturing facilities and warehouses are located adjacent to the docks. This minimizes the internal transportation cost and turnaround time, especially for good that will be re-exported.
4. The current Bonded Logistics Zone will form part of the Bonded Port. Therefore companies in this area can not only enjoy the existing advantages of the Logistics Zone, they will also no longer be restricted to repackaging and distributional functions. They will now be allowed to commence manufacturing and processing operations as well.
   The Bonded Port area will be 6.88 sq kms. There is space available in both conventional and refrigerated warehouses currently nearing completion, and several major shipping companies operate out of Dayaowan Port.

Dezan Shira & Associates maintains an office in Dalian, advising foreign investors on legal administration, corporate establishment, due diligence and tax policy in the city. Please contact Adam Livermore or visit the Dalian office website for more information.