China export broker service

Having trouble paying a Chinese supplier? Did things start off ok for small orders, but you're facing dodgy payment options when you scale to volume? Let's take a look at why this happens, and how we can help ease your China payment and export problems!

CNY is a controlled currency

Chinese Yuan (CNY, RMB, kuai) is a controlled currency: the government has strict rules for how and why it can be exchanged for other currencies. This gives China more control over foreign investment and domestic capital in the national economy.

You can't send a wire to China in local CNY currency** because there's simply no way for your bank to exchange the money for you. The Chinese government doesn't sell CNY on an open market like US dollars or Euros.

Your Chinese supplier can't just convert foreign currency to CNY either. The bank will call to notify them of the wire, then they go to the bank in person to show their export license, a goods invoice, proof of tax payment, and proof of export declaration. If this verification isn't completed in a few days the wire is returned to you less fees (~$50).

Mom and pop shops that give amazing China prices rarely have an export license, and often have no idea how to receive foreign currency legally. Foreign "China Guys" who spend some time in Shenzhen and now peddle services to hacker/Makers have even less of a clue!

Who needs export brokerage

Does this describe you?

• Have a Chinese supplier lined up and ready
• Need to make an order > $500
• Supplier can't receive large amounts of foreign currency, has no/crappy shipping options
• You don't want to go to China personally and pull money from ATM machines

Don't mess around; we'll use our Chinese company and licenses to handle the export on behalf of your supplier.

A better way: Big Company export brokerage for dirty prices!

1. Give us the details of your already arranged purchase, we'll get back with freight options (you can ask for a full refund of this service if you're unhappy with our freight options!)
2. We create official invoices and arrange shipping between you, your supplier, and us
3. Wire payment for goods, tax (VAT), and freight in foreign currency to our Chinese company or Hong Kong company
4. We convert the currency to CNY and make payment to your supplier
5. Your supplier ships to our warehouse with an official VAT tax receipt (fapiao) attached
6. We export to you with an official export declaration via air freight or sea freight
7. Depending on the tariff category, we can apply for a refund of all or part of the VAT paid

That's it! We have all the permits and experience necessary to handle currency exchange and proper export procedures. Sit back and wait for your stuffs to arrive without anything dodgy messing up your supply chain! Your backers applaud you for a project delivered on time and without drama!

Here's the fine print. Stuff you should know, stuff that goes wrong:

• Your supplier must issue a general tax payer fapiao tax receipt for 17% VAT (or special lower rates for some goods)
• Your supplier must provide a genuine and legal VAT fapiao or we can't exchange currency and make payment to them
• VAT is not always refundable. Some categories of goods have partial or no VAT refund
• You must be willing to pay VAT. We will apply for a refund of the maximum amount allowed by law and wire the refund to you

Check us out

• Shenzhen Dangerous Prototypes Electronic Technology Company Limited (Shenzhen)
• Business License
• Export License

Freight cost and testing notes!

We're super eager to try this service and automate it further, but we're just starting and we need your help! If this service might be useful please place an order and we'll contact you for further info. You can request a full refund up to the moment we sign the final brokerage contracts!

Unfortunately we can't provide you with the best freight costs automatically. We need to know a bit about the stuff and make some calls to get the best quotes. Freight is sold at 3% markup to account for payment processing and currency exchange fees, we can provide you a copy of the official government tax receipt for freight.

What we can't do

We want to help make trading with your established suppliers faster, simpler, safer, and maybe even cheaper. We're not qualified to verify the quality or fitness of goods, nor can we assist with disputes or problems.

China vs Hong Kong

Our Chinese company is owned by a Hong Kong company. This is how all the kids do it these days. Depending on the nature and size of the transaction we use our Hong Kong company as an intermediary between you and our Chinese company. This is handy if we need to make multiple attempts to get the transaction to go through, and a lot cheaper using the handy "Cross-border remittance" tools available from our Hong Kong bank.

How to pay a supplier in China

There are three legal routes to get money into China for CNY transactions:

• Payment for goods: Requires invoice, VAT tax receipt proof (fapiao), export declaration proof, import/export permit, banking permit, etc. A portion of VAT may be refundable in the following month if all documents are in order.
• Payment for services: Requires invoice. 6% tax charged on incoming payments. If this method is abused to pay for goods without an export declaration the supplier cannot deduct the cost of the goods from their income leading to very high taxes (25% + loss) in addition to the 6% services tax.
• Payment to individuals: Chinese residents may exchange $50,000 USD equivalent of foreign currency per year for personal use. Abusing this method to pay for goods carries the risk of high taxes on the recipient at the end of year.

While the process itself isn't too difficult, most of the permits require months long applications and deposits of serious amounts of capital. It just isn't worth it for a lot of small/medium Chinese manufacturers and suppliers to deal with foreign customers directly (which is why there's so many agents on Alibaba!)

Things people (who should know better) do:

• Smuggle backpacks of cash across the border from Hong Kong (not unsafe, surprisingly, but still illegal)
• Smuggle components in their pants (cargo shorts are not a logistics network...)
• Hire elderly Chinese to bring in $50,000USD through their personal allotment without fully understanding the tax consequences
• Black market exchange banks: warehouses with pallets of cash are busted daily in Guangdong Province

Even people with a decade of experience working with China still do some of these really stupid things to avoid using an export broker. China has come a long way in the last decade: don't believe that famous hacker with pants full of chips, these things are not tolerated as they were in the past. However, there really hasn't been an alternative for open hardware hackers: brokerage firms want a high percent fee and pricing is rarely transparent. Often a brokerage isn't even willing to handle less than a shipping container in size. We're trying to change that!

What can go wrong?

If smuggling is part of your supply chain you'll face the same disruptions as any illicit operation:

• Lack of tracability and accountability in your "logistics" network
• Slowdowns and "supply chain" disruptions from law enforcement and regular crackdowns
• The Chinese Army busts a black market bank and carries away your pallet of Kickstart funds with a forklift

Would you risk it in your country? Then please, for the love of the year of Linux on the desktop, don't do it! To paraphrase Eric Pan of Seeed Studio: When China builds a wall, China also builds a door. This isn't the 1970s. Word.