The term "bonded warehouse” refers to a storage facility approved by and registered with the Customs for the holding of bonded goods. Imported goods may, prior to being picked up, be stored in a bonded warehouse if approved by the Customs. Goods stored in a bonded warehouse (bonded goods) may be exempt from paying duty on the condition that they are re-exported or exported within the two-year warehousing period.
    During the warehousing period, the owner of the goods or the holder of the manifest thereof may apply to the Customs for permission to  inspect and test, sort, classify, segment, assemble, or repack such goods within the bonded warehouse. The bonded warehouses shall be established in proper locations approved by Customs.
    A bonded warehouse, by nature, is a buffer place for storing goods under the process between Customs' clearance/duty paying and shut-out/re-exportation. On the one hand, dutiable goods are kept in the warehouse to prevent them from flowing into the tax areas and thus secure revenue collection. On the other hand, the bonded goods are allowed to undergo reconditioning processes prior to duty payment. In case of changes in the applicable tariff rates, the owners of the bonded goods can choose a preferable timing to declare the goods and apply to lower rates. Furthermore, the bonding mechnism gives the owners extra time to look for prospective buyers if they haven't had one; in this way, relevant cost can also be saved.
Bonded warehouses can be classified into the following two categories:
    1. General bonded warehouses: 
        For the storage of general goods, materials and fules used in transport vehicles for international trade, equipment and materials for repairing ships or airplanes, mineral oil, hazardous goods, goods for reconditioning,            materials for repairing containers or pallets, exhibition goods, goods for sale in duty-free shops or offshore Island duty-free shops, other goods approved by the Customs.
    2. Self-provided bonded warehouses:
        Bonded warehouses that are registered for the storage of goods imported and purchased by the warehouse owners themselves, goods used for reconditioning, and goods for sale in duty-free shops or offshore island               duty-free shops.