Foreign-Trade Zones Program: Who Qualifies and What You Get
Learn how businesses can use Foreign-Trade Zones to defer, reduce, or eliminate duties on imported goods.
The Foreign-Trade Zones Program allows businesses to operate within specific designated areas to manage the costs of imported goods through specialized customs procedures.
Who it's for
This program is specifically designed for businesses that operate within designated FTZ areas. If your business activities take place inside these specific zones, you may be eligible to participate in the program to manage your international trade processes more efficiently.
What you get
The primary benefit of participating in this program is the ability to manage how you pay duties on imported goods. Depending on your specific operations, you can benefit from duty deferral, which allows you to delay payment, duty reduction, or the total elimination of duties on imported goods. This can significantly change the way you manage the costs associated with bringing goods into the country for processing or storage.
What it costs you
Participating in the program is not free. You will be responsible for paying annual fees to the FTZ operator. Beyond the monetary costs, there is a significant requirement regarding how you manage your stock. You must adhere to strict inventory control requirements to ensure all goods are accurately tracked and accounted for at all times.
The catch to know
A common misunderstanding is that these zones are "tax-free zones." It is important to clarify that they are duty-deferral zones. While they offer significant advantages for managing when and how much you pay, they do not exempt a business from all tax obligations; they specifically focus on the deferral, reduction, or elimination of duties.
How to apply
- Confirm that your business location or operations fall within a designated FTZ area.
- Review the specific inventory control requirements needed to maintain compliance.
- Contact the FTZ operator to discuss the annual fees associated with your participation.
- Visit the official portal for more details: https://www.trade.gov/foreign-trade-zones