Advantages of an FTZ
FTZ Advantages
Port City Logistics is proud to announce that we are expanding our Foreign Trade Zone services. The Foreign Trade Zone (FTZ) program has been a resource for trade economics that has promoted international trade, economic development, and job creation in the U.S. Authorized by the Foreign Trade Zone Act of 1934, the FTZ program expedites and encourages foreign commerce by lowering the costs of U.S. based operations engaged in international trade. Companies operating FTZ’s have become a thriving sector in the economy. The advantages of an FTZ make them important assets for shipping cargo.
FTZ’s help the U.S. economy by allowing companies to source components from around the world at competitive prices, while keeping important value-added activities such as manufacturing in the U.S. foreign and domestic merchandise can be admitted into a zone without formal U S Customs entry procedures, the payment of Customs duties or the payment of federal excise tax. Looking for an FTZ facility; Port City Logistics is the 3PL for all of your cargo. A few advantages of an FTZ include:
- Domestic and International merchandise can be warehoused at the location
- No CBP time limit on storage
- Tighter inventory controls may eliminate year-end inventory loss adjustments
- Zone to zone transfer
- Direct Delivery
Duty Deferral
Customs duties deferred on imports improves cash flow
Duty Elimination
No duty or quota charges on re-exports. No duty on waste, scrap or defective parts
Inverted Tariff
Duty paid at the lower tariff rate of the imported component or finished product
Weekly Entry
Reductions in merchandise processing fees due to weekly entry, resulting in reduced broker entry fees
Tax Savings
Inventory exemption from local taxes in Chatham County-FTZ 104
Formal Customs Entry
Foreign-Trade Zone: Filed just prior to the removal of goods from Zone and only for the number of goods to be removed.
Bonded Warehouse: Must be filed before goods enter a bonded warehouse.
Customs Bond
Foreign-Trade Zone: All admissions to the Zone are covered by Zone Operator’s Bond with Customs. No additional Bond is required.
Bonded Warehouse: Required for all warehouse entries.
Duty Rate
Foreign-Trade Zone: Duty rate can be that which is in effect at the time of admission or withdrawal. On assembled or manufactured products, it can be based on the raw material or on the finished product, whichever is more favorable.
Bonded Warehouse: Merchandise is dutiable at the rate in effect at the time of withdrawal.
State and Local Inventory Tax
Foreign-Trade Zone: Foreign merchandise is not taxed. Domestic merchandise to be exported is not taxed.
Bonded Warehouse: Tax is levied on January 1 of each year on all merchandise.
Waste and Damaged Goods
Foreign-Trade Zone: No duty paid on waste, damaged, or otherwise non-usable merchandise that is destroyed in the Zone.
Bonded Warehouse: Duty owed on the entire shipment entering a bonded warehouse
Imported Goods with Documentation or Labeling Defects
Foreign-Trade Zone: May be admitted and problems corrected.
Bonded Warehouse: May not be admitted.
Domestic Merchandise
Foreign-Trade Zone: May be admitted without Customs permit if non-fungible. May be commingled with foreign goods with Customs approval
Bonded Warehouse: May not be admitted.
Manufacture of Goods
Foreign-Trade Zone: May be done throughout FTZ with Customs and FTZ Board approval.
Bonded Warehouse: May be done only in certain class of bonded warehouse.
Drawback of Customs Duties or Federal Excise Tax
Foreign-Trade Zone: May apply to goods admitted to Zone if approved by Customs.
Bonded Warehouse: Does not apply.
Storage Period
Foreign-Trade Zone: Unlimited.
Bonded Warehouse: Not to exceed 5 years
