In-transit storage is the simplest: goods sit briefly while awaiting onward carriage, with minimal handling permitted and tight time limits. Bonded warehousing allows longer holding with duty suspended until withdrawal, but generally restricts activity to storage and simple handling. A free zone typically sits outside the customs territory altogether and permits processing, assembly, relabelling and change of ownership while the goods remain in place.
| In-transit | Bonded warehouse | Free zone | |
|---|---|---|---|
| Duty | Not yet assessed | Suspended until withdrawal | Outside the customs territory |
| Typical duration | Days | Months | Months to years |
| Permitted activity | Storage only | Storage, simple handling | Processing, assembly, relabelling |
| Change of ownership | No | Limited | Yes, while in the zone |
| Best for | Awaiting onward carriage | Deferring duty until demand is confirmed | Reconfiguring or selling before market entry |
Choosing between them is a question about what has to happen to the cargo and when the sale occurs — not about which is cheapest per square metre. We size the decision against the actual commercial plan, because a cheap facility that cannot legally do what the project requires is not cheap at all.
Harbour Strategies (HK) Limited · 17 September 2024
Editorial commentary by Harbour Strategies. Figures and regulatory details should be verified against primary sources before being relied upon.
