Incoterms 2020 for imports from China: EXW, FOB, CIF or DDP?

What Incoterms govern in imports from China – and what they don’t

Incoterms for imports from China define who bears which transport costs, where the risk of loss and damage passes, and who handles export and import formalities. The version in force (as of October 2026) is Incoterms® 2020 of the International Chamber of Commerce (ICC).

They do not govern transfer of ownership, payment terms, statutory warranty or the applicable law. So “FOB Shanghai” says nothing about when you pay or when the goods become yours – that belongs in the purchase contract.

Transfer of costs and risk at a glance

Simplified overview of the most common clauses for deliveries from China to Germany:

Clause	Transfer of risk	Main carriage paid by	Export clearance China	Import, customs duty, import VAT	Cargo insurance
EXW (Ex Works)	Supplier’s factory, not loaded	Buyer	Buyer	Buyer	Not regulated, advisable for buyer
FCA (Free Carrier)	Handover to your carrier, e.g. container terminal	Buyer	Seller	Buyer	Not regulated
FOB (Free on Board)	On board the vessel at the port of shipment	Buyer	Seller	Buyer	Not regulated
CFR (Cost and Freight)	On board at the port of shipment	Seller	Seller	Buyer	Not regulated
CIF (Cost, Insurance and Freight)	On board at the port of shipment	Seller	Seller	Buyer	Seller, minimum cover ICC (C)
CIP (Carriage and Insurance Paid To)	Handover to the first carrier	Seller	Seller	Buyer	Seller, cover ICC (A)
DAP (Delivered at Place)	At the place of destination, ready for unloading	Seller	Seller	Buyer	Seller, in its own interest
DDP (Delivered Duty Paid)	At the place of destination, ready for unloading	Seller	Seller	Seller	Seller, in its own interest

The four most important clauses in detail

EXW – cheap on paper, difficult in China

With EXW, you have to collect the goods from the factory and also declare the export from China. In practice, this requires a company or an appointed agent in China. What usually happens is that the supplier handles export clearance after all – but without a contractual obligation and with unclear responsibility. Loading is also your responsibility under EXW; any damage during loading is at your expense.

FOB and FCA – the standard solution with your own forwarder

FOB is the most widely used clause in business with China: the supplier brings the goods to the port, handles export and loads them; you book sea freight and insurance through your freight forwarder. The advantage: you know the freight costs, choose the shipping line and transit time, and stay in control.

Strictly speaking, FOB is intended for sea freight of bulk cargo. With containers, the supplier hands over the goods at the terminal, days before loading – the ICC recommends FCA for this. In everyday practice, FOB is still usually agreed; what matters is that both sides know what is meant.

CIF – the supplier pays the freight, you bear the risk

With CIF, the supplier organises freight and insurance to the port of destination. However, the risk passes to you as soon as the goods are loaded in China. The prescribed minimum insurance (ICC Clause C, 110 % of the goods value) only covers major events such as stranding or fire, not typical transport damage such as moisture or breakage. In addition, the supplier chooses the shipping line – often the cheapest, not the fastest – and high charges that you have to bear may arise at the port of destination.

DDP – convenient, but with tax pitfalls

With DDP, the seller delivers customs-cleared to your plant and pays customs duty and import VAT. For you, this is the simplest option – provided the seller can do it in a legally compliant way. A supplier not based in the EU needs an EORI number and, as a rule, German VAT registration. If this is not the case, the import is often declared in the buyer’s name – and then you are the importer after all, without knowing it from the contract. Background information in the article Customs duty and import VAT.

Which clause suits you?

Mode of transport and suitable clause

The mode of transport helps determine which clause makes sense. Transit times are guide values from port or terminal to Germany, excluding pre- and on-carriage (as of 2026, varying by route and the situation in the Red Sea).

Mode of transport	Transit time (guide value)	Suitable clauses	Typical for
Container sea freight (FCL/LCL)	approx. 30–45 days	FCA, FOB, CFR, CIF, DAP, DDP	Series deliveries, heavy parts
Rail freight China–Europe	approx. 18–25 days	FCA, CPT, CIP, DAP, DDP	Urgent partial quantities, medium values
Air freight	approx. 3–7 days	FCA, CPT, CIP, DAP, DDP	Samples, shortages, light high-value parts
Courier/express	approx. 3–6 days	Usually DAP or DDP	First samples, documents

Delivery terms at TOP Asia Technik GmbH

The standard at TOP Asia Technik GmbH is delivery to your door, duty paid (DDP): transport is included in the price, we clear customs, pay customs duty and import VAT, and you receive a German invoice in euros with 19 % VAT. Your contractual partner is a German GmbH. On request, we also deliver EXW or under other Incoterms – then no freight buffer needs to be priced in, which can be cheaper for you. We agree the delivery terms with you.

On request, safety stocks, call-off orders or a consignment or interim warehouse, e.g. at the freight forwarder, are also possible; the customer bears the storage costs. More on the process under Sourcing from China; you can get a cost calculation for your part via the enquiry form. For heavy parts such as castings or machine frames, comparing the freight options is particularly worthwhile.

Frequently asked questions about Incoterms for imports from China