Foreign Trade Zones are a public utility, used to expidite and encourage international trade. This facility can accommodate many functions, from manufacturing and warehousing, to sales and exhibitions.

A foreign trade zone is a designated site, by the Department of Commerce, where merchandise of foreign and domestic nature, is considered to be in international commerce.

FTZ's are considered to be outside Customs Territory of the U.S., foreign and domestic merchandise may enter this enclave without a formal customs entry, payment of customs duties or government excise taxes.

When a final product is exported from a FTZ, no U.S. Customs duty is levied. However, if the final product is imported from the FTZ into the U.S., Customs duties and excise taxes are due only at the time of formal entry into the U.S. The duty paid is the lower of that applicable to the product itself or its, component parts. The FTZ provides opportunities for Customs duty savings. It also offers one of the most flexible methods of handling imported and domestic goods.

Reduction of Duties – With permission of the Foreign Trade Zone Board, in a Foreign Trade Zone, users are allowed to elect a zone status on merchandise admitted to a zone. This allows users to elect the lower duty rate if applicable to the foreign inputs or the finished product manufactured in the zone.

Elimination of Duties – No Customs duties are paid on merchandise exported from a FTZ. Generally, Customs duties are also eliminated for merchandise that is scrapped, wasted, destroyed or defective merchandise in a zone.

Elimination of Drawback – In some cases, Customs duties previously paid on exported merchandise may be refunded through a process called drawback.

Labor, Overhead & Profit – Customs duties are not owed on labor, overhead and profit attributed to production in a FTZ.

Taxes – By federal statute, tangible personal property imported from outside the U.S. and held in a zone, as well as that produced in the U.S. and held in a zone for exportation, are not subject to State and local ad valorem taxes.

Quotas – Ability to manage quota restrictions, store materials in a zone so when the quota opens, the material can be immediately shipped into U.S. Customs territory.

Zone-to-Zone Transfer – By making use of the ability to transfer goods from one zone to another, the merchandise is transported in-bond, Customs duties may be deferred until the product is removed from the final zone for entry into the U.S. Customs territory.

If you import large volumes.

If you import products temporarily for manufacturing processes or other purposes.

If you need more space in your subzone,or warehouse.

If you need to manage quota restrictions.

If you want to reallocate critical capitol needed elsewhere.

If you want to streamline your inventory.

If you want to $ave money.