EXW vs FOB: Why FOB Is Safer When Buying from China

Key points

Under EXW the buyer is responsible for Chinese export clearance but usually cannot file it in its own name.
Under FOB the supplier clears export and pays origin costs until the goods are on board.
A supplier that does not declare in its own name may lose its export VAT rebate and price that in.
FCA at the supplier's premises gives EXW-style control while the supplier clears export.
Neither EXW nor FOB obliges the seller to insure, so insure from the moment risk passes to you.

EXW vs FOB at a glance

Seller makes the goods available at its premises, not loaded
Buyer loads, or the factory loads at the buyer's risk
Buyer is responsible for Chinese export clearance
Buyer pays trucking to port, origin terminal charges and freight
Risk passes at the factory
Allowed for any mode of transport

Task	EXW	FOB	FCA (seller's premises)
Export packing	Seller	Seller	Seller
Loading at the factory	Buyer	Seller	Seller
Export declaration in China	Buyer	Seller	Seller
Trucking to the port or warehouse	Buyer	Seller	Buyer
Origin terminal handling and loading on board	Buyer	Seller	Buyer
Sea freight and insurance	Buyer	Buyer	Buyer
Import clearance, duty and VAT	Buyer	Buyer	Buyer
Risk passes	At the factory, before loading	On board at the port	At the factory, after loading

The export clearance problem with EXW in China

Every shipment leaving China needs an export customs declaration, filed through the China International Trade Single Window. The declaring exporter must be registered with China Customs (GACC) as a consignor or consignee of import and export goods and hold an electronic port account. A foreign buyer, such as a Dubai trading company, is not registered and normally cannot act as exporter of record in China. Under EXW you are formally responsible for export clearance, yet you cannot perform it yourself, so the declaration still has to be made in the supplier's name or through an export agent. If nobody agreed that in advance, cargo can wait at the port while documents are chased.

Customs registrationThe exporter holds a GACC consignor and consignee registration and an electronic port account. Separate MOFCOM foreign trade registration has not been needed since 30 December 2022.
Documents to the brokerCommercial invoice, packing list, sales contract, declaration authorisation, and the declaration elements for each HS code.
ClassificationChina uses a 10-digit code. Material, use, brand and model must be declared accurately, or customs will query the shipment.
Licence and inspection checkSome goods need an export licence, a dual-use licence or statutory inspection before they can be declared.
Single Window filingThe broker files under the right trade mode, usually 0110 general trade, or 1039 for qualifying market goods.
Release and loadingCustoms releases the goods, and the container is gated in at the terminal and loaded.
VAT rebate claimUnder general trade, the exporter uses the declaration in its own name to claim its export VAT rebate.

The VAT rebate side of the story

China's standard VAT rate is 13%, with 9% or 6% for some goods. When a supplier exports under general trade in its own name, with matching VAT invoices and the export proceeds collected, it can reclaim VAT at a product-specific rebate rate of 0–13%. If someone else declares the goods, the supplier may lose that rebate, so it may raise its EXW price or refuse to provide documents. Rebates also change: for photovoltaic products they were cancelled from 1 April 2026, for batteries they were cut from 9% to 6% on the same date, and the battery rebate is due to be eliminated from 1 January 2027.

13%standard VAT rate in China

0–13%export rebate rate, by product

1 Apr 2026solar export rebate cancelled

1 Jan 2027battery export rebate due to end

When FOB is safer, and when EXW can work

FOB is safer when the supplier is registered with China Customs and you want it to own the export declaration and licence checks.
FOB suits payment by letter of credit, because the seller delivers on board and can obtain an on-board B/L.
FOB makes comparing offers simpler: trucking to port and origin terminal charges are inside the supplier's price.
EXW can work when your forwarder has agreed in writing which licensed agent will declare the goods and the supplier will hand over the documents.
EXW can work for small market purchases declared under 1039 market procurement through a partner agent.
For truck or rail to Central Asia, FOB is not an option at all; use FCA.

Market goods and multiple suppliers

Buyers in Yiwu or Guangzhou markets often deal with small shops that cannot issue VAT invoices or declare exports. For qualifying goods, the 1039 market procurement mode allows a simplified declaration through registered market operators, commonly capped at USD 150,000 per declaration, VAT exempt and without rebate. When goods come from several suppliers, each can declare its own goods, which it must do if it claims a rebate, or one agent declares the consolidation. Our Guangzhou team collects from the factories, counts and photographs the cartons, consolidates them and arranges the export.

SeaRoad

Before you accept an EXW price

EXW check before you sign

0/8

Is the supplier registered with China Customs to declare exports?
Who will file the export declaration, and in whose name?
Will the supplier provide the invoice, packing list and declaration data?
Does the product need an export licence or statutory inspection?
Who loads at the factory, and who is liable for damage while loading?
Does the price change if the supplier loses its VAT rebate?
Is cargo insurance in place from the factory?
Would FOB or FCA cost less once pickup and export fees are added?

Quick quiz

EXW or FOB?

Under EXW, who is formally responsible for Chinese export clearance?

Why is EXW often hard for a Dubai buyer?

Which term gives EXW-style control but keeps export clearance with the seller?

Under FOB Shenzhen, when does risk pass to the buyer?

Frequently asked questions

What is the difference between EXW and FOB?

Under EXW the seller only makes the goods available at its premises and the buyer handles loading, export clearance and all transport. Under FOB the seller also clears export and delivers the goods on board the vessel at the named port.

Is EXW cheaper than FOB?

The EXW price is lower, but you then pay loading, trucking to port, the export declaration and origin terminal charges yourself, and take on the export clearance risk. Compare the total cost to on board, not the unit price.

Can a foreign buyer do export customs clearance in China?

Normally not in its own name. The exporter must be registered with China Customs, so the declaration is made by the supplier or a licensed export agent.

Who pays origin terminal handling under FOB?

The seller pays origin terminal handling and loading on board under FOB, usually inside its FOB charges. Under EXW these are for the buyer.

Can I use FOB for a truck shipment from China?

No. FOB is a sea and inland waterway rule. For truck or rail, use FCA at the supplier's premises or a named terminal.

Should I buy EXW or FOB from Alibaba suppliers?

Usually FOB or FCA. Ask whether the supplier can declare exports in its own name. If it cannot, agree in writing who will, before you pay the deposit.

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General information checked on the date shown. Rules and rates change: our team confirms the details for your shipment.

EXW vs FOB: the China export clearance problem, and when FOB is safer