EXW, FOB, CIF, DDP: Incoterms explained for UAE importers
The three letters on your quote decide who pays for what and who carries the risk. A plain-English guide.
- Incoterms are rules from the International Chamber of Commerce.
- They decide costs and risk, not the price of the goods alone.
- FOB is a common choice for importers with their own forwarder.
- Compare quotes on the same Incoterm, or the cheapest one may not be.
A quote of "USD 4 per unit" means little until you know the Incoterm. It might include delivery to your warehouse, or nothing beyond the factory gate. Incoterms, published by the International Chamber of Commerce, set out who pays and who carries the risk at each stage.
| Term | Seller handles | Buyer handles | Good when |
|---|---|---|---|
| EXW (Ex Works) | Goods ready at factory | Everything from pickup, including China export clearance | You have a strong agent in China |
| FOB (Free On Board) | Delivery to the ship and export clearance | Sea freight, insurance, import | You use your own forwarder |
| CIF (Cost, Insurance, Freight) | Freight and basic insurance to destination port | Unloading onward, import duties | You want a simple quote to a port |
| DDP (Delivered Duty Paid) | Everything to your door, including duties | Receiving the goods | Small orders, first-time importers |
Which to choose
Many Gulf importers choose FOB and appoint their own forwarder: the factory handles China, and you control freight and clearance at home. DDP is convenient but can hide costs, and it can complicate how duties and VAT are recorded. Ask your accountant and clearing agent.
Compare like with like
When suppliers quote different terms, convert them to the same basis before comparing. Use our landed cost worked example.
Related: sea or air freight from China to the UAE.
How Husbar can help
Husbar China Line helps Gulf brands compare quotes, choose Incoterms and coordinate freight from the factory to the warehouse. See Husbar China Line.
Frequently asked questions
What is the most common Incoterm for imports from China?
FOB is widely used by importers who appoint their own forwarder.
Is DDP a good idea?
It is simple, but check exactly what is included and how duties and VAT are handled.
Who publishes Incoterms?
The International Chamber of Commerce. The current edition is Incoterms 2020.