- Use a local security trustee to centralize collateral control
- Match governing law to warehouse location
- Ensure the warehouse operator is bonded/licensed
- Include insurance naming the lender as loss payee
- Confirm storage contracts permit pledging of receipts
How To Finance Goods Stored in Overseas Warehouses?
How Can I Finance Goods Stored in Overseas Warehouses?
Holding inventory in a foreign warehouse ties up working capital. Warehouse receipt financing lets you pledge that stock—turning dormant assets into liquidity. This guide walks you through the legal regimes, perfection steps, and best practices across major jurisdictions.
Comparison of Key Regimes
| Jurisdiction | Legal Basis | Perfection Mechanism |
|---|---|---|
| United States | UCC Article 9 – Security interests in warehouse receipts | File UCC-1 Financing Statement with state registry |
| England & Wales | Law of Property Act 1925 & FCA Regs 2003 | Notice to warehouse operator or title-transfer collateral |
| OHADA (Africa) | Uniform Act on Secured Transactions 2010 – Nantissement de stock | Register pledge at RCCM (commerce registry) |
| Uganda | Movable Property Security Rights Act 2019 (PPSA) | File financing statement on Uganda PPSR (URSB) |
| India | Warehousing Act 2007 – Negotiable warehouse receipts | Register charge with Central Warehousing Regulator |
| Global Model | UNCITRAL Model Law on Secured Transactions | Registration or notification as adopted locally |
Step 1: Obtain a Proper Warehouse Receipt
- Names you as owner/depositor
- Specifies goods, quantity, quality, location
- Issued by a licensed, bonded operator
Step 2: Draft a Security Agreement
- Reference the receipt (ID, dates, goods)
- Define default events and remedies
- Specify governing law matching warehouse location
Step 3: Perfect Your Security Interest
- US: File UCC-1 financing statement
- England: Serve notice or use FCA title-transfer
- OHADA: Register at RCCM
- Uganda: Register on PPSR
- India: Register under Warehousing Act
- Others: Follow local UNCITRAL adoption steps
Step 4: Notify Relevant Parties
Where required, inform the warehouse operator and any contractual buyers so payments can be redirected upon default.
Step 5: Monitor & Administer
- Maintain a collateral register of pledged receipts
- Verify inventory levels and storage conditions
- Check for intervening liens or anti-assignment clauses
Step 6: Enforce on Default
- US: UCC enforcement sale procedures
- England: Court-ordered sale or transfer
- OHADA: Commercial Court auction or in-situ sale
- Uganda: High Court sale directive
- India: District Court or arbitration per Warehousing Act
Best Practices & Tips
Ready to unlock working capital from your overseas inventory? Financely structures and perfects warehouse receipt financing across jurisdictions—making your collateral enforceable and compliant.
Start FinancingDisclaimer: This guide is for informational purposes only and does not constitute legal advice. Always consult local counsel before creating or enforcing security interests.
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