EXW (Ex Works) is the Incoterms 2020 rule that places the least burden on the seller. The seller makes the goods available at its own premises or at another agreed place, at the buyer's disposal; loading onto the vehicle, export customs, main carriage and import formalities all belong to the buyer. Risk passes to the buyer the moment the goods are made available. It can be used with any mode of transport, but FCA is generally preferred for international sales.

Who performs loading under EXW?

Under the rule, the seller has no obligation to load the goods onto the vehicle; loading is the buyer's task and cost. In practice, since the forklift, ramp and operator are at the seller's premises, loading is often physically carried out by the seller. To avoid disputes over who bears any damage occurring during this, an explicit clause should be added to the contract.

Who files the export declaration under EXW?

According to Incoterms, export customs formalities are the buyer's responsibility. However, in many countries the person making the declaration is required to be established in that country and hold a tax registration, so a buyer based abroad cannot actually do this. As a result the declaration is in practice filed by the seller, and the rule written in the contract diverges from what happens on the ground.

EXW (Ex Works) Incoterm Explained

Q: What is the difference between EXW and FCA?

The main difference lies in the export customs and loading obligations. Under FCA, the seller makes the export declaration; if the named place of delivery is the seller's premises, loading the goods onto the buyer's vehicle also belongs to the seller. Under EXW, both of these tasks belong to the buyer, which is why FCA is a more workable rule for international sales.

Q: How is the VAT exemption affected in an EXW sale?

To benefit from the VAT exemption on export deliveries, the export must be evidenced by a customs declaration. In practice the declaration is filed in the name of the seller established in Türkiye; but where it is drawn up in the name of another exporter through a carrier or broker sent by the buyer, or where the seller never receives a copy of the declaration and its closure information, the seller is left with no document proving the export. In that case, the exemption and refund process is put at risk, and the transaction may be treated as a domestic delivery instead.

What EXW means

EXW is the abbreviation of Ex Works, used in Turkish as “delivery at the workplace” (işyerinde teslim). It is one of the eleven rules in the Incoterms 2020 rule set published by the International Chamber of Commerce (ICC), and it is the rule under which the seller’s obligation is narrowest. The seller only makes the goods available at its own premises or at another agreed place (for example a third-party warehouse or terminal); everything after that is the buyer’s task.

The place of delivery is specified together with the rule when it is written: for example, “EXW – Gebze factory, Türkiye (Incoterms 2020).” The place of delivery should be described down to the address, and where possible to the exact point within the premises (which ramp, which warehouse door). If the place is left vague, the buyer will not know where to send its vehicle, and waiting time and wasted-trip costs arise.

EXW can be used with any mode of transport: it applies to road, sea, air, rail and all intermodal combinations. Whether the goods travel by container or as palletized air cargo does not change how the rule works.

One point should be underlined: Incoterms rules do not govern when title to the goods passes, how payment is to be made, or which country’s law applies to the contract. These are separate clauses of the sales contract. Incoterms only defines delivery, risk transfer, cost allocation and customs/documentation obligations.

Where cost and risk transfer

Under EXW, risk transfer and cost transfer occur at the same point. This is one of the easier aspects of the rule; however, the transfer point is not where most people assume.

The moment of transfer is when the goods are placed at the buyer’s disposal at the agreed place and on the agreed date. That is, not when the goods are loaded onto the buyer’s vehicle, but when they are set aside and made ready at the seller’s warehouse. The seller has no obligation to place the goods on the vehicle.

There is a related condition: the goods must have been earmarked and separated for that particular contract. If it is not clear which batch in the general warehouse stock belongs to this buyer, delivery is not considered to have taken place.

Item	Seller	Buyer
Packaging, making the goods ready at the place of delivery	Yes	—
Loading onto the vehicle	Not mandatory	Yes
Export customs declaration, permits and fees	—	Yes
Pre-carriage and terminal costs	—	Yes
Main carriage (freight)	—	Yes
Cargo insurance	Not mandatory	Not mandatory
Transit and import customs, duties and fees	—	Yes
Unloading at destination	—	Yes
Assistance in obtaining documents	On request, at the buyer’s cost	Requests and pays

The insurance row matters. Under EXW, neither party is obliged to take out insurance. Under Incoterms 2020, an insurance obligation on the seller exists only under CIF and CIP. Since the buyer bears the risk, it makes sense for the buyer to arrange the policy.

Seller’s obligations

Prepare the goods in conformity with the contract, together with the invoice and any conformity certificates.
Make the goods available to the buyer at the agreed place and date; package and mark them in accordance with trade custom, except where it is usual in the particular trade to carry the goods unpacked (for example bulk cargo).
Give the buyer any notice needed to enable the buyer to take delivery.
Bear the risk of loss and damage to the goods until the moment of delivery.
If the buyer requests, assist in obtaining the documents and information needed for export and import; the risk and cost of this belong to the buyer.
Bear the cost of any pre-delivery inspection, weighing, measuring and counting.

What the seller does not do is just as decisive: no loading onto the vehicle, no export declaration, no carriage contract, no insurance.

Buyer’s obligations

Take delivery of the goods at the agreed place and time, and provide the vehicle.
Take on the work and cost of loading.
Carry out export customs formalities; obtain the required permits, licences and security declarations.
Organise and pay for the entire carriage; freight, terminal and handling costs belong to the buyer.
Cover the customs formalities and duties and fees in the transit country and the country of import.
Where the buyer has the right to determine the time and/or place of delivery, notify the seller of it with sufficient advance notice.
If it fails to send the vehicle on time or fails to notify the place of delivery, bear the additional cost and risk arising from that date onward; this early transfer of risk applies only if the goods have been clearly identified as the contract goods.

When it is the right choice

For domestic sales. Since there is no customs process, EXW’s main drawback disappears; the buyer sends its vehicle and takes the goods.
When the buyer has an established legal entity or branch in the seller’s country (together with a tax registration and exporters’ association membership). In that case there is a structure that can actually make the export declaration. A customs broker only provides representation services and does not satisfy the establishment requirement.
When comparing prices. A buyer wanting to see the bare price of the goods asks for an EXW price as a reference, then calculates the transport items itself.
For samples, prototypes and small batches, where the buyer’s courier or forwarder picks up at the door and handles all the formalities.

When it is the wrong choice

EXW is usually the wrong rule for international sales. The reason comes down to a single point: the export customs declaration. Under EXW this obligation belongs to the buyer, but the buyer is not established in the seller’s country. In many countries, including Türkiye, the person filing the export declaration is required to be established there and to hold a tax registration. A buyer based abroad does not meet this condition. As a result, the declaration is in practice filed by the seller; what is written in the contract diverges from what happens in the field. This divergence makes it disputable who bears the cost and responsibility when a problem arises.

For this reason, it is widely recommended to use FCA (Free Carrier) instead of EXW in international transactions. Under FCA, export customs belongs to the seller. If the named place of delivery is the seller’s premises, loading the goods onto the buyer’s vehicle also passes to the seller — these are the two differences from EXW. In return, the declaration sits with the right party both legally and in practice, and the problem of documenting the export disappears.

The second problem is the export exemption. In Türkiye, export deliveries are exempt from VAT; however, to benefit from the exemption, the export must be evidenced by a customs declaration. In practice the declaration is filed in the name of the seller established in Türkiye. The problem arises where the declaration is drawn up in the name of a different exporter through a carrier or broker sent by the buyer, or where the seller never receives a copy of the declaration or its closure information; in that case the seller is left without a declaration proving the exemption. In that case the refund process becomes blocked, and the transaction may end up being treated as a domestic delivery with VAT invoiced. This is the most expensive consequence of EXW’s seemingly “easy” side.

The third issue is loading ambiguity. Since risk passes when the goods are made ready, the forklift belongs to the seller, the operator is the seller’s employee, but the risk is the buyer’s. The ICC’s explanatory notes indicate that if the seller actually performs the loading, it does so at the buyer’s risk and cost. Even so, writing an explicit clause into the contract such as “loading is performed by the seller, at the seller’s risk” closes off this dispute from the outset.

Common mistakes

Writing an incomplete place of delivery. “EXW Türkiye” is not a delivery term. The city, facility address and, if possible, the loading point should be specified.
Not specifying the Incoterms version. If “(Incoterms 2020)” is not added next to the rule, which text applies remains unclear.
Using hybrid phrases such as “EXW loading included.” If the rule needs to be modified, this should be written explicitly as a separate contract clause; free-form phrases attached next to the rule’s name create room for differing interpretations.
Assuming risk transfers at the moment of loading. This is the most common mistake; transfer occurs when the goods are made available to the buyer.
Setting off without insurance. Under EXW, insurance is nobody’s obligation; the buyer, who bears the risk, should arrange its own policy.
Expecting document assistance from the seller for free. The seller has an obligation to assist with documents, but the cost and risk belong to the buyer.
Overlooking the establishment requirement. If the buyer cannot file a declaration in the seller’s country, EXW is not workable from the outset.
Not accounting for waiting and storage costs. If the buyer sends its vehicle late, the resulting costs pass to the buyer.

Assessing the delivery term together with the customs and tax side before shipment prevents most costs that would otherwise surface later. Customs brokerage and regulatory advisory services exist precisely to carry out this assessment.

This page is general information, not legal advice. Regulations change; confirm the current position before acting.

What is EXW? Risk and cost allocation under Ex Works