What is EXW?
EXW (Ex Works) is an Incoterm where the seller’s only obligation is to make the goods available at their own premises, their factory, warehouse, or another named place. The buyer arranges everything else: collection, loading, export customs clearance, freight, insurance, and import customs. EXW gives the seller minimum responsibility and places maximum obligation on the buyer. It applies to all transport modes.
If a supplier has quoted you a price labelled “EXW [city or address]” and you are not sure what that means for you, this article explains it clearly.
EXW is the most seller-friendly Incoterm in existence. The seller does almost nothing beyond making the goods ready at their door. Everything else, collection, export paperwork, the entire journey, and import clearance at your end, falls on you as the buyer.
That sounds simple. In practice, it causes real problems for UK and EU traders, especially after Brexit. The section on disadvantages and the UK section explain exactly why.
Here is the full sequence of events under an EXW shipment, from start to finish.
1. Contract agreed. The seller and buyer agree on EXW terms and name a specific place: for example, “EXW Seller’s Factory, Milan, Italy.” That address is the point where the seller’s obligations end and the buyer’s begin.
2. Seller prepares the goods. The seller packs the goods (unless otherwise agreed) and makes them available for collection at the named premises on the agreed date. That is the full extent of the seller’s obligation.
3. The seller does NOT load the goods. This surprises many people. Under EXW, the seller is not required to load the goods onto the buyer’s vehicle. Loading is the buyer’s responsibility unless the parties agree otherwise in the contract. The seller simply has the goods ready.
4. Buyer arranges collection. The buyer sends their own transport, a haulier, freight forwarder, or courier, to collect the goods from the seller’s premises.
5. Buyer handles export customs clearance. This is the most problematic step. In the country of the seller, the buyer must arrange export customs clearance. The buyer, not the seller, must submit the export declaration. In practice, a buyer based in the UK collecting goods from an Italian supplier will find this difficult. The buyer may not have the legal standing to act as an exporter in Italy, may not have a European EORI number, and may not have a relationship with an Italian customs agent.
6. Buyer arranges main freight. The buyer contracts the carrier and pays freight costs for the entire journey, from the seller’s premises to the buyer’s destination.
7. Buyer arranges insurance. The seller has no obligation to provide insurance under EXW. The buyer arranges their own cargo insurance if they want cover.
8. Transit. The goods travel entirely under the buyer’s risk and at the buyer’s cost.
9. Buyer handles import customs clearance. On arrival in the UK, the buyer clears the goods through UK customs, pays UK import duty and import VAT, and files a declaration through the UK Customs Declaration Service (CDS). The buyer needs a UK EORI number to do this.
10. Delivery to buyer’s premises. The buyer takes delivery of the goods. The shipment is complete.
| Responsibility | Seller | Buyer |
|---|---|---|
| Packing the goods | Yes (unless agreed otherwise) | No |
| Making goods available at named premises | Yes | No |
| Loading goods onto buyer’s vehicle | No (unless agreed) | Yes |
| Export customs clearance | No | Yes |
| Export duties and taxes | No | Yes |
| Main freight from seller’s premises | No | Yes |
| Cargo insurance | No obligation | Yes — buyer must arrange own cover |
| Risk of loss or damage | Ends when goods available at premises | From the moment goods are available |
| Import customs clearance | No | Yes |
| Import duties and import VAT | No | Yes |
| Last-mile delivery to buyer’s premises | No | Yes |
The fundamental point of EXW: the seller’s job ends the moment the goods are sitting ready at their premises. Everything after that is the buyer’s problem and the buyer’s cost.
When a supplier quotes a price on EXW terms, the price covers a very narrow set of things.
What the seller’s EXW price includes:
That is it. The EXW price is essentially the ex-factory price of the goods.
What the buyer must arrange and pay for separately:
A cost example in practice:
A UK retailer buys machine parts from a manufacturer in Germany on EXW terms. The parts are valued at £10,000. The EXW price is £10,000. On top of that, the retailer pays: a haulier to collect from Germany and deliver to the UK (around £900–£1,500 for a full-load movement depending on distance and weight), cargo insurance (roughly £50–£150 for this value), UK customs clearance via a broker (£150–£300), UK import duty (0% for most machine parts from Germany under the UK-EU Trade and Cooperation Agreement, but duty may apply for goods from other countries), and UK import VAT at 20% (£2,000, typically reclaimed by VAT-registered businesses). None of these costs are in the EXW price.
Under EXW, risk passes from the seller to the buyer at the earliest possible point of any Incoterm, the moment the goods are made available for collection at the seller’s named premises.
The goods do not need to be loaded. They do not need to be in the buyer’s hands. They simply need to be ready for collection. From that moment, if anything happens to them, theft, damage, fire, it is the buyer’s financial loss.
What this means in plain terms:
If a seller in France makes goods available at their warehouse on Monday morning and the buyer’s haulier does not arrive until Wednesday, and on Tuesday night the warehouse catches fire, the buyer bears the loss. Risk transferred on Monday when the goods were made available, not when the haulier actually collected them.
This is earlier than many buyers expect. The goods have not left the seller’s building. They have not been loaded. But the buyer already owns the risk.
For domestic trade within the same country, this is manageable. For international trade, especially UK buyers collecting from EU suppliers post-Brexit, the gap between “goods available” and “goods in your hands” can involve days of delay at borders, and the buyer bears all of that risk.
Under EXW, the seller has no obligation to arrange insurance. The entire insurance responsibility falls on the buyer.
The buyer bears risk from the moment goods are available at the seller’s premises. That means the buyer needs cover from that point, including while the goods are still sitting at the seller’s factory waiting to be collected.
What type of insurance does a buyer need under EXW?
You should arrange a cargo insurance policy covering:
Institute Cargo Clauses A (all-risks cover) is the most comprehensive option and is appropriate for most commercial shipments. If your goods are fragile, high-value, or being shipped over long distances, Clauses A is worth the cost.
Do not assume you have cover if you have not arranged it. Under EXW, there is no insurance unless you put it in place. If goods are damaged in a road accident between Milan and Calais, the loss falls entirely on you.
If you ship regularly, talk to a marine cargo insurer or your freight forwarder about an open cover policy that automatically covers each shipment under agreed terms. This is more efficient than arranging individual policies per shipment.
Minimal obligation and risk. The seller’s job is done when the goods are ready for collection. There are no freight contracts to manage, no export clearance to handle, and no insurance to arrange. For sellers who are not experienced in logistics or export documentation, this simplicity is genuinely attractive.
Clean pricing. The EXW price is the ex-factory price of the goods. There is no need to build freight, insurance, or customs costs into the quote. For buyers who have their own freight forwarders and want to manage their own supply chain, EXW pricing is straightforward to compare.
No need for a freight forwarder. Under EXW, the seller does not need to deal with carriers, shipping lines, or customs agents. This reduces administrative overhead for small manufacturers or suppliers who sell in volume to buyers who handle their own logistics.
Useful for domestic sales. EXW works well for domestic trade where both parties are in the same country. The buyer collects from the seller’s premises, and there are no export clearance complications.
Control over production and packing. The seller controls how goods are packed and when they are ready. There is no pressure to meet a carrier’s collection deadline, the seller simply notifies the buyer when goods are available.
Full control over the supply chain. The buyer chooses every carrier, every forwarder, every insurer. If you have preferred logistics partners and established rates, EXW lets you use them end-to-end.
Potentially lower total cost for experienced buyers. Buyers who ship in high volumes and have competitive freight contracts may get better rates than a seller would arrange on their behalf. If you have an open marine cargo policy and a trusted customs agent, EXW can result in lower total landed costs than a seller-managed Incoterm like CIP or DDP.
Transparency over supply chain costs. Because you arrange everything, you see every cost. There is no freight mark-up buried inside a CIF or DDP price.
Works across all modes. EXW applies regardless of whether you ship by road, air, sea, or rail. You are free to choose the mode that works best for your shipment.
Useful for consolidating shipments. If you are buying from multiple suppliers in the same country and want to consolidate goods into a single container, EXW lets you send your own forwarder to collect from each supplier and consolidate at a local freight station before shipping to the UK.
The critical VAT problem, proof of export. This is the most serious issue with EXW for UK and EU sellers, and it is not well understood.
In the UK (and the EU), when a seller exports goods, they can zero-rate the sale for VAT, meaning they charge 0% VAT instead of 20%. This is only allowed if the seller can prove the goods actually left the country.
Under EXW, the buyer controls export clearance. The buyer arranges the export declaration, uses their own customs agent, and holds the proof of export. The seller may never receive that proof. HMRC requires UK sellers to hold evidence that goods have been exported to justify zero-rating the sale. If HMRC audits the seller and they cannot produce proof of export, HMRC can demand the full 20% VAT that should have been charged.
This is not a theoretical risk. It is a documented problem that affects UK exporters using EXW. The seller has handed over the goods, received payment, and zero-rated the invoice, but has no proof that the goods ever left the UK. If the buyer never exported them, or used an informal export route, the seller carries the VAT liability.
For UK sellers exporting under EXW, this is a major legal and financial risk.
Export clearance may not be possible for foreign buyers. A buyer based in the UK collecting goods from a French seller faces a practical problem: they may not have legal standing to submit an export declaration in France. Export declarations in the EU must be made by someone with an EU EORI number. A UK-based buyer typically does not have one. This creates a situation where the party legally responsible for export clearance under EXW (the buyer) is legally unable to perform it.
In practice, this is often resolved by the seller’s freight agent acting as the indirect customs representative, but this blurs the EXW obligations and can create liability for the seller.
No control after handover. Once goods are collected, the seller has no visibility of what happens to them. If goods are damaged during loading (which is the buyer’s responsibility), the seller has limited ability to intervene or claim.
Export clearance in a foreign country is difficult. As discussed above, the buyer must arrange export clearance in the seller’s country. If the seller is in the EU and the buyer is in the UK, the buyer needs an EU EORI number to submit the export declaration, or must appoint an EU-based customs agent to act as indirect customs representative. This adds cost and complexity that buyers often do not anticipate when they agree EXW terms.
Risk starts before the goods have moved. The buyer bears risk from the moment goods are available at the seller’s premises. If there is a delay between “goods ready” and “goods collected”, due to a vehicle breakdown, a border delay, or poor coordination, the buyer carries that risk throughout.
Loading is the buyer’s problem. The seller is not obligated to load goods onto the buyer’s vehicle. If the seller has a warehouse full of pallets and the buyer’s haulier arrives with a flatbed, any damage that occurs during the buyer’s loading operation is the buyer’s liability.
Insurance falls entirely on the buyer. There is no seller-arranged insurance under EXW. The buyer must arrange their own cover from day one. New importers who are not aware of this may have no cover in place and discover the gap only after goods are damaged.
All customs costs on the buyer. In addition to UK import duty and import VAT, the buyer is responsible for export clearance costs in the seller’s country. These can include customs agent fees, export duties (rare but applicable to some commodities), and any export licence fees if the goods are controlled items.
Complexity increases with distance. EXW works reasonably well for short-distance domestic trade. For international shipments, especially across UK-EU borders post-Brexit, the number of moving parts the buyer must manage (two sets of customs declarations, two sets of customs agents, freight, insurance, loading) makes EXW operationally complex and expensive.
EXW works best in a narrow set of situations.
Domestic trade within the same country. If both the seller and buyer are in the UK, EXW is simple. There is no export clearance to worry about. The buyer sends a vehicle, collects the goods, and the job is done.
When the buyer has sophisticated logistics capability. A large UK importer with their own freight forwarder, an established customs broker, an open marine cargo policy, and an EU EORI number may find EXW efficient, they control every element of the supply chain and are not paying a seller’s freight mark-up.
When consolidating multi-supplier shipments. If you are sourcing from several manufacturers in the same region and want to combine their goods into a single shipment, EXW allows your forwarder to collect from each one and consolidate at a local facility.
For samples or small domestic collections. If you are collecting product samples from a nearby supplier, EXW is the simplest possible arrangement.
Avoid EXW for any cross-border shipment where you cannot handle export clearance in the seller’s country. If you do not have an EU EORI number and you are buying from an EU seller, you will struggle to fulfil your obligation as the party responsible for export customs under EXW.
Avoid EXW as a UK seller if you need proof of export for VAT zero-rating. If you are a UK exporter selling on EXW terms and the buyer controls the export declaration, you may not receive the proof of export that HMRC requires. Use FCA instead, it keeps the seller responsible for export clearance and maintains the proof of export.
Avoid EXW if you are a new importer without established logistics partners. Without a freight forwarder, a customs broker, and a cargo insurance policy already in place, taking on all logistics responsibility under EXW is risky.
Avoid EXW for high-value, fragile, or time-critical goods unless you have thorough insurance and logistics control. The risk transfers extremely early under EXW, and delays in collection can leave valuable goods sitting unprotected.
Avoid EXW when post-Brexit customs complexity would be unmanageable. UK-EU trade now involves customs declarations on both sides. Under EXW, both sets of declarations are the buyer’s problem. For a UK buyer importing from Europe, that means hiring a UK customs agent AND either having an EU EORI number yourself or appointing an EU customs agent. FCA moves the export clearance back to the seller, which is where it is more naturally handled.
If EXW is not right for your situation, FCA (Free Carrier) is usually the better alternative, particularly for UK-EU trade.
Mistake 1: Assuming the seller will handle export clearance.
Under EXW, export clearance is the buyer’s responsibility. Many buyers assume the seller’s country will handle this automatically, or that the freight forwarder they send to collect will deal with it. The freight forwarder can help, but the legal obligation sits with the buyer. Clarify this before you agree EXW terms.
Mistake 2: UK sellers forgetting about proof of export.
Zero-rating a sale for VAT under EXW without having a mechanism to receive proof of export is a serious mistake. If HMRC audits you and you cannot prove the goods left the UK, you may owe 20% VAT on the entire sale value. Either add a contractual obligation requiring the buyer to provide export evidence, or switch to FCA terms.
Mistake 3: Forgetting to arrange cargo insurance.
EXW comes with no insurance. If goods are damaged from the moment they are available at the seller’s premises, the loss is yours. Arrange cover before the collection date, not after.
Mistake 4: Not clarifying loading responsibility.
The seller is not required to load goods under EXW. If your haulier arrives at a seller’s premises and expects the seller to use their forklift to load the vehicle, that may not happen. Agree loading arrangements in advance and put them in the contract.
Mistake 5: Agreeing EXW for EU buys without an EU EORI number.
A UK buyer collecting from an EU supplier under EXW needs to submit an export declaration in the EU. That requires an EU EORI number. UK EORI numbers are not valid in the EU. If you do not have an EU EORI number, you will need to appoint an EU-based customs agent to act as indirect customs representative, which adds cost and complexity. Check this before agreeing EXW terms with any EU supplier.
Mistake 6: Using EXW where FCA would be safer.
Many sellers choose EXW because it sounds simpler. But the proof-of-export problem means that EXW creates hidden risk for the seller. The ICC itself recommends against EXW for international trade where export clearance is required. FCA is almost always the better choice.
EXW and FCA (Free Carrier) are frequently compared because both are used when the buyer wants to control the main freight. The differences between them are major and matter a great deal in UK-EU trade.
| Key Difference | EXW | FCA |
|---|---|---|
| Export customs clearance | Buyer’s responsibility | Seller’s responsibility |
| Loading at seller’s premises | Buyer’s responsibility | Seller’s responsibility (if named place is seller’s premises) |
| Risk transfer point | When goods available at seller’s premises | When goods handed to buyer’s carrier (or loaded, if at seller’s premises) |
| Proof of export for seller’s VAT | Difficult — buyer controls export declaration | Seller handles export — gets proof naturally |
| Suitable for international trade | Problematic — buyer may lack export clearance rights | Yes — seller clears export in their own country |
| EU EORI number needed by buyer | Yes (for EU buys) | No — seller handles EU export clearance |
| Post-Brexit UK-EU suitability | Poor | Good |
The bottom line on EXW vs FCA:
FCA is nearly always the better choice for cross-border trade. The seller handles export clearance in their own country, which they are better placed to do, have the legal standing to do, and naturally get proof of export from. The buyer handles the main freight, just as they would under EXW.
The only real advantage of EXW over FCA is that EXW is simpler for the seller. But that simplicity creates problems for both parties in international trade. The ICC explicitly recommends considering FCA as an alternative to EXW when export clearance is required.
EXW and DDP (Delivered Duty Paid) are at opposite ends of the Incoterms spectrum. EXW gives the seller minimum obligation; DDP gives the buyer minimum obligation.
| Key Difference | EXW | DDP |
|---|---|---|
| Export customs clearance | Buyer | Seller |
| Main freight | Buyer | Seller |
| Import customs clearance | Buyer | Seller |
| Import duty and import VAT | Buyer | Seller |
| Insurance obligation | Buyer must arrange own | Seller (no obligation but carries risk) |
| Risk transfer point | At seller’s premises (earliest point) | At buyer’s named destination (latest point) |
| Who controls the supply chain | Buyer | Seller |
| Complexity for buyer | High | Lowest possible |
| Complexity for seller | Lowest possible | High — seller must handle foreign import clearance |
DDP is the mirror image of EXW. Under DDP, the seller does everything, including import clearance and paying UK import duty and VAT on the buyer’s behalf. For UK buyers importing from a supplier that offers DDP terms, it sounds attractive. But it comes with its own risks: the seller may not be VAT-registered in the UK, may not be able to legally act as UK importer of record, and the DDP price may include a major mark-up on logistics and duty costs.
For most UK importers, the practical middle ground is FCA, CIP, or DAP, not the extremes of EXW or DDP.
EXW applies to all transport modes: road, sea, air, and rail. The Incoterm does not specify how the goods must travel.
In practice, because EXW transfers risk and responsibility to the buyer at the seller’s premises, the transport mode has no impact on the seller at all. The buyer chooses the mode and makes all the arrangements.
Road freight: EXW is commonly used for road freight, particularly for domestic collections or cross-border EU collections. Post-Brexit, this involves UK-EU customs on both sides.
Air freight: EXW works for air freight. The buyer arranges collection from the seller’s premises, delivery to the air freight station, and the air shipment itself.
Sea freight: EXW works for containerised sea freight. The buyer’s freight forwarder collects the goods, arranges container loading, and books the vessel space. All of this is the buyer’s cost and responsibility.
Rail freight: EXW applies to rail too, including freight rail for commercial shipments. Less common in UK trade but applicable.
The export clearance problem applies regardless of mode. Whether goods travel by road, air, or sea, the buyer must arrange export clearance in the seller’s country before they can move. This is consistently the hardest part of EXW for cross-border buyers.
No. EXW did not change in Incoterms 2020. The rules for EXW in 2020 are functionally identical to those in Incoterms 2010.
The seller still makes goods available at their premises. The buyer still handles everything else. Risk still transfers at the earliest possible point.
What did the ICC say about EXW in 2020?
While EXW itself did not change, the ICC included a note in the Incoterms 2020 introduction that is worth knowing. The ICC explicitly acknowledged the practical difficulties with EXW for international trade, particularly the export clearance problem. The ICC’s guidance recommends that parties consider using FCA (Free Carrier) as an alternative to EXW when the transaction involves export customs clearance.
This is major. The organisation that creates the Incoterms rules is effectively saying: EXW creates problems in international trade; use FCA instead.
The ICC’s concern centres on two points. First, the buyer may not be able to legally get the export licence or export clearance in the seller’s country. Second, the seller may not be able to get proof of export for VAT purposes, because the buyer controls the export declaration.
Should you still specify Incoterms 2020 in your contracts?
Yes. Always specify the version, “EXW [named place], Incoterms 2020”, so both parties know which set of rules applies. This matters if there is ever a dispute.
EXW creates specific challenges for UK trade, particularly following Brexit at the end of 2020.
You are responsible for EU export clearance. Since Brexit, goods moving from the EU to the UK require a customs export declaration in the EU member state before departure. Under EXW, this is your responsibility as the buyer. You will need either an EU EORI number or an EU-based customs agent willing to act as indirect customs representative.
Without an EU EORI number, you cannot submit an EU export declaration yourself. You will need to appoint a customs agent in the seller’s country, adding cost and complexity to what seemed like a simple buy.
You are the UK importer of record. You handle UK import customs clearance. You need a UK EORI number to do this. Register through HMRC, it typically takes 3–5 working days. Without a UK EORI number, you cannot import goods commercially into the UK.
UK import declarations go through CDS. The UK Customs Declaration Service (CDS) replaced the old CHIEF system in November 2023. All UK import declarations now go through CDS. Your UK customs broker should be using it.
UK import duty applies. Check the commodity code for your goods and the applicable UK duty rate. For goods from the EU, the UK-EU Trade and Cooperation Agreement means many goods can be imported at 0% duty, but this requires the goods to meet rules of origin requirements. HMRC’s guidance on how Incoterms affect customs valuation is at gov.uk/guidance/customs-valuation/incoterms.
UK import VAT applies above £135. Goods imported into the UK with a customs value above £135 are subject to UK import VAT at 20% at the border. This is the buyer’s cost under EXW. VAT-registered UK businesses can typically reclaim this through postponed VAT accounting. If your shipment is below £135, import VAT is collected at the point of sale rather than at the border.
Port of entry. For sea freight from the EU, Felixstowe handles the majority of UK container imports. For road freight from mainland Europe via France, Dover is the primary UK entry point. For goods from further afield, Southampton is a major alternative.
The proof of export problem is the most important thing you need to know.
UK sellers can zero-rate exports for VAT, that is, charge 0% VAT rather than 20% on goods that are genuinely being exported. HMRC permits this, but it requires the seller to hold evidence that the goods have left the UK.
Under EXW, the buyer controls export clearance. The buyer submits the export declaration, and HMRC’s proof of export (the departure message from the UK export control system) goes to the buyer, not to you as the seller.
If the buyer does not share this with you, or if HMRC does not believe you have adequate evidence, HMRC can assess you for the VAT that should have been charged. On a £50,000 sale, that is a £10,000 VAT bill you did not expect.
To protect yourself as a UK EXW seller, you should either: require the buyer to provide you with a copy of the export declaration and the proof of departure as a contractual obligation; or switch to FCA terms, which make you responsible for export clearance and naturally generate your proof of export.
You do not need a UK EORI number under EXW: export clearance is the buyer’s obligation. But you may need to cooperate with the export declaration process if the buyer’s agent requests information about the goods. In practice, many UK exporters find it useful to have a UK EORI number regardless of the Incoterm used.
Here is a concrete worked example to make EXW real.
The scenario: A UK fashion brand. Clifton Clothing, orders 5,000 T-shirts from a manufacturer in Porto, Portugal. The Portuguese supplier quotes EXW terms: “EXW Supplier’s Warehouse, Porto, Incoterms 2020.” The invoice value is £15,000.
What happens:
The Portuguese manufacturer packs the T-shirts and notifies Clifton Clothing they are ready for collection on Monday. At that moment. Monday morning, when the goods are sitting in the warehouse ready, risk transfers to Clifton Clothing. The goods have not moved. They are still in Portugal.
Clifton Clothing has already arranged for a road freight forwarder operating between Portugal and the UK. The forwarder sends a driver to Porto on Tuesday.
Export clearance problem: Clifton Clothing does not have an EU EORI number. Their UK-based freight forwarder helps by appointing a Portuguese customs agent to submit the EU export declaration. This costs an extra £200 and takes time to set up. The Portuguese agent submits the export entry. The proof of EU export goes to the Portuguese customs agent, not to Clifton Clothing and not to the Portuguese manufacturer.
The goods are loaded by Clifton Clothing’s driver and the truck drives north through Spain and France to Calais. From Calais, the truck crosses the Channel via the Dover Strait and arrives at Dover.
UK import clearance: Clifton Clothing’s UK customs broker submits the UK import declaration through CDS. Clifton Clothing pays UK import duty (0% under the UK-EU TCA, subject to rules of origin being met), and UK import VAT at 20% on £15,000 = £3,000. Clifton Clothing uses postponed VAT accounting, so the VAT is deferred to their next VAT return rather than paid at the border.
The goods arrive at Clifton Clothing’s Bristol warehouse. Total logistics cost on top of the £15,000 EXW price: around £1,800 for road freight, £200 for Portuguese customs agent, £250 for UK customs clearance, £120 for cargo insurance.
What goes wrong: Clifton Clothing later realises they cannot zero-rate their sale as a foreign customer buy in their accounts without a copy of the export declaration. They have to chase the Portuguese customs agent for a copy of the EU export entry, which they eventually receive, but it takes three weeks and several emails. If Clifton Clothing had been the seller rather than the buyer on EXW terms, they would have faced the same problem from the other side: no proof of export for HMRC.
The lesson: EXW placed major logistical and administrative responsibility on Clifton Clothing as the buyer. FCA terms, with the Portuguese manufacturer handling export clearance, would have simplified the process and solved the proof-of-export issue entirely.
EXW stands for Ex Works. It is one of the 11 Incoterms 2020 rules published by the International Chamber of Commerce (ICC). Under EXW, the seller’s only obligation is to make the goods available at their named premises. The buyer arranges everything else, collection, export clearance, freight, insurance, and import clearance.
The buyer. Under EXW, export customs clearance in the seller’s country is the buyer’s responsibility. In practice, this is one of the biggest problems with EXW for international trade. A buyer based in the UK collecting from an EU supplier may not have an EU EORI number and may not have legal standing to submit an EU export declaration. They will need to appoint an EU customs agent, adding cost and complexity.
No. Under EXW, the seller is not required to load goods onto the buyer’s vehicle. The seller simply makes the goods available at their premises. If loading is required, it is the buyer’s responsibility unless the parties explicitly agree otherwise in the contract.
Under EXW, the buyer handles export clearance and loading. Under FCA (Free Carrier), the seller handles export clearance and loading (if the named place is the seller’s premises). FCA is almost always the better choice for cross-border trade. The seller is better placed to handle export clearance in their own country, and the seller naturally gets proof of export, which is important for VAT zero-rating. See the comparison table in the EXW vs FCA section above.
Only if the seller can get evidence that the goods have left the UK. Under EXW, the buyer controls export clearance and the proof of export goes to the buyer. If the seller cannot get that proof, HMRC may assess the seller for 20% VAT on the sale. This is a real risk. HMRC’s guidance on export evidence requirements is available at gov.uk/guidance/customs-valuation/incoterms. UK sellers should either require buyers to provide export evidence contractually or use FCA terms instead.
As a UK importer buying on EXW terms, yes, you need a UK EORI number to clear goods through UK customs on arrival. You may also need an EU EORI number (or an EU customs agent) to handle export clearance in the EU member state you are buying from. As a UK seller using EXW, you are not legally required to have a UK EORI number (since export clearance is the buyer’s obligation) but having one is advisable for general export business.
The £135 de minimis threshold determines how UK import VAT is collected. For goods with a customs value of £135 or less, UK import VAT is collected at the point of sale (by the seller or marketplace) rather than at the UK border. For goods above £135, which includes most commercial shipments. UK import VAT at 20% is due at the border. Under EXW, the buyer pays this as part of their import costs. VAT-registered UK businesses can use postponed VAT accounting to defer payment.
Not ideal for most buyers or sellers. The key problem is export clearance. Under EXW, the UK buyer must submit an export declaration in the EU member state they are buying from, which requires an EU EORI number or the appointment of a EU customs agent. Post-Brexit, this adds major complexity compared to using FCA, where the EU seller handles EU export clearance in their own country. For most UK-EU trade, FCA is the better Incoterm.
Article: exw-incoterm | ShippingEducation.co.uk | Published June 2026 | Incoterms 2020
Internal links: FCA Incoterm | DDP Incoterm | CIP Incoterm | Incoterms Explained
External: HMRC Customs Valuation. Incoterms
This article is part of a learning path — return to explore more topics.
Keep reading
What is DPU? DPU, Delivered at Place Unloaded, is the only Incoterm where the seller is responsible for unloading goods at the named destination. The
If you are new to shipping and you have just discovered that your goods might be classified as dangerous, do not panic. This article explains
What is a commercial invoice? A commercial invoice is the primary document in international trade. It is issued by the seller to the buyer and
What is a shipping container? A shipping container is a standardised steel box built to carry goods by sea, rail, or road. Containers are designed
Table of Contents What Is a Customs Broker? What Does a Customs Broker Actually Do? How Much Does a Customs Broker Cost in the UK?
Table of Contents What Is a Packing List? Packing List vs Commercial Invoice. What’s the Difference? Why the Packing List Matters for Customs and Freight