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In the process of export agency, how is the entity responsible for receiving and paying the payment determined?
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We are a manufacturing company and recently want to expand our business by entering the e-commerce market.The company acts as an export agent. However, there's a crucial issue we've been unable to clarify: To which account should foreign clients transfer the payment? If clients send the payment to the agent company, which then transfers it to us, is this operation compliant with regulations? Could it affect tax refunds? We hope experts can help us sort out this issue regarding the determination of the legal entity involved.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
From the perspective of regulatory compliance，you must clarify the core principle of "who exports and who receives foreign exchange payments". Under the agency export model，although the declaration procedures are handled by the agency company，the actual exporter is you as the manufacturing enterprise. According to the regulations of the State Administration of Foreign Exchange，the entity receiving foreign exchange payments for exports must be consistent with the "operating unit" on the declaration form. If the agency company is the operating unit，the payment should be deposited into the agency company's account，however，the agency company must，after receiving the foreign exchange payments，conduct a "domestic transfer" through the bank to transfer the payment to you and provide a tax payment certificate. The greatest risk here is that if the agency company collects and pays the payment on behalf of you but fails to provide a complete tax chain proof，you will face the risk of being unable to declare export tax rebates，and may even be identified by tax authorities as engaging in false trade. It is recommended that you clearly stipulate in the agency agreement: the agency company only collects agency fees，the ownership of the payment belongs to you，and specify specific time limits for receiving and transferring payments and the obligation to provide relevant documents.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
In terms of operational procedures, the determination of the entity responsible for receiving and paying the payment directly affects the efficiency of customs clearance and tax refund. The standard practice is for the agency company, as the declaration operator, to receive the payment, but it must conduct the "domestic transfer under the agency export" at the bank, transferring the original currency or the RMB after conversion to your company's account. Three key documents need to be coordinated: First, the declaration form's "operating unit" is the agency company, and the "shipping unit" is your company; Second, the bank remittance slip's remarks column must indicate "agency export payment receipt" and the declaration form number; Third, the agency company needs to provide you with the "Proof of Goods Exported by Agent" and the bank transfer certificate. This operation can not only meet the customs' requirement of "consistency between documents and goods", but also ensure the foreign exchange management authority's supervision logic of "who exports, who receives the payment". Please remember not to transfer the payment privately through personal accounts or non-official channels, which will lead to inconsistencies in the flow of documents, funds, and goods, triggering customs inspections.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
When explaining payment arrangements to foreign clients, the professionalism of your communication directly impacts their trust. You can approach this as follows: "To ensure trade compliance and payment security, we will arrange for our export agency partner [agency name] to receive your payment. They will transfer the full amount to our company account via official banking channels within three working days after receiving the funds. This is a compliant practice in international trade that safeguards your payment security." Additionally, the agency agreement must clearly stipulate that the agency acts solely as a payment collection channel, does not hold ownership of the funds, and must complete the transfer within the agreed timeframe. It is recommended that you require the agency to provide its bank credit certificate and include a penalty clause for delayed transfers in the contract. This approach demonstrates your professionalism and expertise while effectively managing risks to prevent the agency from misusing your funds.