Foreign Trade Zone Advantages
Let us show you how to use our zone's advantages to your company's benefit.
Doing business with a FTZ gives you numerous advantages over a standard warehouse and even a bonded warehouse. Your company can exploit these benefits in order to gain a competitive edge in your market and save your company time and money.
Customs duties are paid only when imported merchandise is entered into US customs territory. Merchandise may be held in inventory in a FTZ without customs duty payment.
Goods imported and stored in a foreign trade zone may be exported without ever incurring customs duties, avoiding lengthy drawback procedures.
By federal statute, tangible personal property imported from outside the U.S. and held in a FTZ, and tangible personal property produced in the U.S. and held in a zone for exportation, are not subject to state and local ad valorem taxes. Most state and county tax authorities exempt all merchandise in a FTZ from inventory taxation.
Country of Origin Marking-Labeling
Merchandise, which needs labeling or labeling changes, can be entered into a FTZ and labeled properly. This can substantially reduce expenses for improper marking on goods entering the U.S.
Goods at Hand
In addition to cash flow savings, imported goods bonded to a nearby FTZ allows you closer control over your product. Working with local brokers and banks may save you money and anxiety by arranging customs documentation and financial instrument with people you know.
U. S. Quota Applications
Most merchandise may be held in a FTZ even if subject to U.S. quota restrictions. Merchandise may also be substantially transformed in a FTZ into a non-quota item freeing the transformed merchandise of quota restrictions.
Transfer of Title
Ownership of goods may be transferred in a FTZ by transfer of title to another party.
The FTZ may be used to inspect product to meet proper specifications before duty is paid. Product not meeting specifications can be repaired, re-exported, or destroyed without duty payments.
Previously exported goods that have been returned may be held in a FTZ for disposition, avoiding drawback procedures.
Labor, Overhead, and Profit
Production or assembly operations within a FTZ can result in significant savings. By importing finished product, U.S. duty is applicable on foreign labor, overhead, and profit since it is included in the value of the product. Substantial savings in duty may be obtained by making the finished product within a FTZ.
Advantages Over a Bonded Warehouse
Frequently, we are asked whether the benefits offered by a zone can be realized through a bonded warehouse. As the function-by-function comparison below indicates, a zone does have greater advantages over a bonded warehouse.
Customs entry must be filed to enter goods into a bonded warehouse. In our zone customs entry is not required until removal from a zone.
In a bonded warehouse your goods are always under customs lock. Inside a zone you have complete access to goods stored at all times without waiting for and without payment for customs inspectors. Customs personnel need not be present at the immediate work site.
Payment of Duty
Duties must be paid prior to release from bonded warehouses, whereas in a zone they are only due upon entry into U.S. territory.
Manufacture of Goods
You may not manufacture goods inside a bonded warehouse. One can manufacture in a zone with duty payable only on the salable product, not on the waste material. No duty is paid on export or re-exports.
Within a bonded warehouse goods may not be stored, relabeled, repaired, or discarded, except with individual approval by customs to manipulate. In our zone substandard goods may be discarded. No duty is paid for shrinkage, evaporation, seepage, damage, accountable loss, etc.
Appraisal and Classification
This must be done almost immediately at a bonded warehouse; on the other hand in a zone the tariff rate and value may be determined either at the time of entry into a zone or when goods leave a zone.
Not to exceed 5 years in a bonded warehouse; however it is unlimited in a FTZ.