Yantian Integrated Free Trade Zone Upgraded IntroductionDSV Air & Sea Co., Ltd – Shenzhen

Supply Chain Solution

2 | DSV Air & Sea

Yantian Integrated Free Trade Zone (YFTZ) Development深圳盐田综合保税区

Jan. 1999

The State Council of China approved. Yantian Port Bonded Zone established.

- 1.39 sq km.

Apr. 2004

Interaction btw Yantian Port Bonded Zone & Yantian Port terminal. Yantian Bonded Logistics Park was created.

- 0.96 sq km.

Dec. 2005

Yantian Bonded Logistics Park passed China Customs testing, began operation.

Jan 2014

The State Council of China approved to upgrade Yantian Bonded Logistics Park into Yantian Integrated Free Trade Zone.

- 2.17 sq km.

15th Jan . Yantian Port Bonded Logistics Park was formally upgraded to Yantian Integrated Free Trade Zone

26th Jan. Yantian Integrated Free Trade Zone passed China Customs acceptance inspection.

9th Mar. New Customhouse office set up to support new business scope.

- 2.17 sq km.

Consist of 1.Shatoujiao Bonded Zone, 2.Yantian Port Bonded Zone, 3.Yantian Port Bonded Logistics Park.

3 | DSV Air & Sea

Top special economic zone with most functions & convenient control policies:

• Export / multi-country consolidation• Import & Export bonded storage• Global sourcing • International distribution • Entrepot trade • RMA, VMI, Retailed E-commerce • Value added services (pick, pack, kitting)• Export processing / Assembly• International transhipment

Export Customs Supervised (ECS)

Free Trade Zone(FTZ)

Integrated Free Trade

Zone

Bonded Zones in China

Free Trade Port (FTP)

Export Processing Zone (EPZ)

Yantian Integrated Free Trade Zone (YFTZ)深圳盐田综合保税区 now at top!!!

4 | DSV Air & Sea

Cargo Flow via YFTZ

• Export trading• VMI, VAS• Consolidation &

MCC

Domestic Distribution

Suppliers

Export ClearanceTax retund

Import ClearancePay duty, VAT

• E-commerce retail distribution

• Import trading

• Customs registration Import / Export

• Duty free

Features:• Bonded storage, Free duty tax• Export - Immediate Tax refund• Unlimited storage period• Close connection to Yantian terminal• China – HK cross-border express passage• Centralized declaration• Retailed E-commerce distribution (Courier pickup & delivery)

5 | DSV Air & Sea

* Update by end of Feb 2016

USEurope

Australia

South America

Africa

Middle East

US Europe South America Asia Middle

East Africa Australia HK Feeder Total

29 28 6 17 2 2 2 1 7 94

Worldwide Shipping Service via Yantian Port

6 | DSV Air & Sea

YFTZ - Highway Traffic

Kunming

Nanning

Haikou

Zhuhai Hong Kong

Xiamen

Fuzhou

Ningbo

Shanghai

Hangzhou

NanchangChongqing

Guiyang

HefeiNanjing

Changsha

Shenzhen

Sichuan

Yunnan Guangxi

Guangdong

Hainan

Fujian

Jiangxi

Zhejiang

Anhui

Jiangsu

Hubei

Hunan

ChengduWuhan

HenanShaanxi

Guizhou

Guangzhou

7 | DSV Air & Sea

YFTZ North

YFTZ South

ECS

• 5 minutes to port operation zone

• 1 hour to Shenzhen airport

• 15 minutes to HK-CHN border

• 45 minutes to other Shenzhen ports

• 35 minutes to Futian FTZ

Geographic Background

8 | DSV Air & Sea

Trading Models via YFTZ

China Domestic Market Yantian Integrated FZT Overseas

Domestic Distributor

DSV WHSBonded goods locations

owned by Exporter

Overseas Exporter DSV client &

principal for DSV import agency

contract if used for B-type clients

DSV import agency

Client B

Client C

Blue arrows – product flow Red arrows – paper & financial flow Red dashed line – optional flow if distributor without import license

Client A model – trade model in USD/EUR – continue similar contract terms as based on CIF China/FOB overseas sales

Client B model – wants to buy domestically in RMB, DSV act as import agent and issue Chinese RMB VAT invoice as agent for overseas principal, pays duty/VAT and remits USD overseas. Suitable for regional distributors and clients with order large enough to justify transaction cost & 5 working day lead time for clearance. All stock owned by overseas entity – all profits realized overseas with a need for Chinese legal entity, VAT and CIT taxation.

Client C model (to be status) – frequent usage/small quantities doesn’t justify lead time and cost of individual orders ex bonded stock. Overseas principal needs to find proper local distributor(s) to take ownership & trade domestically. Products however can still stay in same YFTZ warehouse in a non-bonded status with no storage limit, fast lead-time and with full visibility & logistics cost control in the hands of overseas exporter (if deemed beneficial)

DSV WHSNon-bonded goods locations owned by

distributor

Client A

Customs clearance - Centralization

2-3 days customs clearance

4-5 days clearance + invoice issue

Same or next day outbound

2-3 days import declaration

9 | DSV Air & Sea

Thank You谢谢Donald WuSupply Chain SolutionDSV Air & Sea Co., Ltd. Shenzhen Branch

+86 755 8275 9800 Tel. +86 755 8275 9840 Direct tel.+86 185 6572 0770 MobileDonald.wu@hk.dsv.com www.dsv.com