Alternative Structures For Selling Product Into Export Markets


This document sets out various structures for selling products into the US and other export markets. The structures track the progression of a prototypical Hong Kong company moving from FOB Asia to LDP (DDP) US sales. In Structure A, Hong Kong Co. is doing home-jurisdiction manufacturing and selling FOB HK,in Structure B Hong Kong Co. is a trading company but still selling FOB HK, in Structure C Hong Kong Co has established a US-based distributor which sells to the customer (US Department Store) on LDP (DDP) terms and in Structure D Hong Kong Co. makes the LDP sales directly to US Department Store.

The structures help to illuminate the commercial, financing, customs and tax implications as Hong Kong Co. moves from FOB to LDP sales. This progression from FOB to LDP is one that many Asian companies and exporters in other jurisdictions make as they become increasingly sophisticated and want to maximize profit and lower customs duty.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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