After a diamond delaer sets up a company inside Shanghai Diamond Exchange(SDE), which means the company also gets the SDE membership and DAC issued licence, the diamond dealer can do the following business:
a. Import diamonds to the exchange from overseas, where is a diamond tax-free zone;
b. Export diamond bought in China to the exchange.
c. Buy or sell the diamond to members without any tax inside exchange.
d. After paying a deposit worth part of diamonds value paid to customs, the diamonds can be taken out of exchange and sold to any company in China. Bring back the remaning diamonds after three months and pay VAT for those sold outside.
e. Import roughs to the exchange and consign the roughs to a manufactor in China for polishing. Aftre polished, the diamonds should be returned to exchange or exported out of China. The diamonds returned can be sold in the way mentioned above.