Benefits of a Foreign Trade Zone for Companies
Foreign Trade Zones were established to help US businesses offset tariffs on foreign manufacturing materials. They offer the opportunity to reduce, defer, or eliminate Customs tariffs and fees, which can also improve cash flow and may eliminate the need for a Duty Drawback program. Additionally, FTZ’s can shorten inbound material lead time by eliminating the need for an import Customs entry at a Port of Entry, typically saving 2-3 days transit time. Both foreign goods and domestic goods held for export are exempt from state/local inventory taxes.
Reducing or Eliminating Costs
- Cut your duty tariff payments on imported merchandise, potentially all the way down to zero percent.
- Cap your spending on government mandated Merchandise Processing Fees to $30,000 per year.
Delaying Expenses
- Hold onto your money longer by delaying duty payments until your imported merchandise leaves your factory or warehouse and enters the U.S. market.
- Withhold payment on duties on merchandise that is rejected, scrapped, exported, or consumed within an FTZ.
Saving Time
- Shorten your supply chains by bypassing the need for a customs entry before receiving your merchandise from a port of entry.
- Start filing a consolidated weekly entry with U.S. Customs and Border Protection (CBP) rather than reporting individual shipments.
Who benefits the most from Foreign Trade Zones (FTZ)?
Large Exporters moving ≥ $5M annually
Manufacturers using ≥ $10M in imported parts annually
Retail importers using ≥ 100,000 sq. ft. of import inventory
Import duty benefits when using an FTZ site depend on these actions:
Goods enter the zone duty free
Goods are inside the zone. Storage, processing, and manufacturing are permitted
Goods exit the zone and import duties are reduced or completely eliminated
Is an FTZ right for my company?
Are you wondering if your company could benefit from a foreign trade zone (FTZ)? The World Trade Center Denver, in partnership with QAD, offers a complimentary assessment to help you determine whether an FTZ is the right solution for your business.
This free assessment includes:
● Evaluation of Potential Savings: Analyze your current import/export operations to identify possible reductions in Customs tariffs, fees, and state/local inventory taxes.
● Operational Efficiency Review: Assess how an FTZ could streamline your supply chain, shorten lead times, and improve overall cash flow.
● Tailored Recommendations: Receive customized advice on the steps required to set up and operate an FTZ effectively.
Discover how an FTZ can provide significant cost savings and operational benefits. Schedule your free assessment today and let our experts guide you through the process.
