1. Merchandise can be stored in inventory or exhibited indefinitely in the Foreign Trade Zone without having to pay Customs duties. Duties are paid only when imported merchandise is shipped into the U.S. Customs territory.
2. Foreign and domestic merchandise being held in the Foreign Trade Zone for export is not subject to state or local inventory taxes, in fact, most State and County tax authorities exempt merchandise from inventory taxes.
3. No Customs duties are paid on merchandise exported from a Foreign Trade Zone.
4. Substantial savings on insurance costs can be negotiated.
5. Duty rates for finished product may vary greatly from those charged on the product's component parts alone. The Foreign Trade Zone user has the option of paying duty on the component parts or a finished product manufactured within the Foreign Trade Zone using the component parts, whichever is lower.
6. Title to merchandise may be transferred within a Foreign Trade Zone as long as a "retail" sale does not take place.
7. While merchandise is in the Foreign Trade Zone, many laws imposed by government agencies such the FDA, EPA, DOT,and USDA may not be applicable. Only if the merchandise is shipped into U.S. Customs territory, would these requirements have to be met.
8. Customs Duties are due on the value of labor, overhead and profit from production operations conducted overseas. There are, however, no Customs duties owed on labor, overhead or profit from production operations conducted within a Foreign Trade Zone. This substantial savings creates tremendous incentives to hire a local workforce, benefiting the employer, the employee and the local economy.
9. If the value added to the merchandise inside the Foreign Trade Zone exceeds 50 percent, you may qualify for a "Made in the USA" label.
10. Merchandise may be transferred from one Foreign Trade Zone to another in-bond, without Customs duty due. This allows, for example, a component supplier to assemble a product in one zone and transfer that product to another zone where their customer would add additional components to create a final product. Duty would then be paid when the final product is shipped into Customs territory, often at a lower rate than the components or sub-assemblies produced in the first Foreign Trade Zone.
11. Waste, scrap, defective, damaged or obsolete merchandise may be returned to the foreign shipper or disposed of under Customs Department supervision without having to pay Customs duties.
12. Your property is protected 24 hours a day under U.S. Customs security controls.
13. Foreign Trade Zones that are also located within an
offer the combined advantages of both zones.
14. For additional information regarding Foreign Trade Zones, follow this link to: Foreign Trade Zone Board Website.