The purpose of the Foreign Trade Zone (FTZ) is to facilitate trade and increase the global competitiveness of United States-based companies.
Legally, a FTZ is an area within the United States that the government considers outside the country, or at least, outside of the United States customs territory. Certain types of merchandise can be imported into a FTZ without going through formal customs entry procedures or paying import duties.
Companies that import or re-export can realize substantial time and financial savings via the FTZ In just a 30-minute conversation with your CFO or CEO, an FTZ consultant is able to gather the data required to produce a feasibility study/cost-benefit analysis, and it is free to you. INzone (www.INzone.org
or 317-487-7200), Central Indiana’s FTZ Grantee Administrator, pays for the study and helps connect you to qualified consultants.
Some of the benefits of operating within a Foreign Trade Zone are:
- Imports may be admitted and held in a foreign trade zone without paying U.S. Customs duties.
- Foreign Trade Zone users can pay the duty rate on component material or merchandise produced from component material, whichever is lower.
- Customs duties are not paid on merchandise exported from a zone.
- Duties are reduced or eliminated on materials subject to defect, damage, obsolescence, waste, or scrap.
- Merchandise may be exported and returned to an FTZ without duty payment.
- Spare parts may be stored, returned, or destroyed without duty payment.
- Delays in customs clearances and duty drawback are reduced or eliminated.
- Duties are not owed on labor, overhead, or profit attributed to FTZ production operations.
- Quality control inspections can identify sub-standard goods to be destroyed or returned without duty payment.
- No duty is owed on in-bond, zone-to-zone transfer of FTZ merchandise