Is the U.S. Foreign-Trade Zones (FTZ) Program Right For Me?

Row of shipping containers with United States flag on the front.

The U.S. Foreign-Trade Zones (FTZ) program was established by the Foreign-Trade Zone Act of 1934. The primary purpose of the U.S. FTZ program is to facilitate international trade and promote economic development in the United States.

Determining whether the U.S. FTZ program is right for your company involves assessing your specific business needs, international trade activities, and supply chain dynamics.

Below you will find various key factors to consider:

Import and Export Activities

If your company is involved in importing raw materials, components, or finished goods, a U.S. FTZ can provide benefits such as deferred or reduced customs duties and taxes.
Duties are not paid on foreign materials ultimately exported from a U.S. FTZ, either in their imported state or as part of a finished good. This includes trade remedy tariffs such as Section 232, Section 301 and AD/CVD duties
Evaluate the volume of your import and export activities. If you have a significant international trade presence, a U.S. FTZ may offer substantial cost savings.

Manufacturing or Processing Operations

Companies engaged in manufacturing or processing may find U.S. FTZs particularly advantageous. U.S. FTZ status allows for certain manufacturing processes to occur within the zone without incurring customs duties on the imported components.
- An example of this is duty reduction. Companies may benefit from inverted tariff if the duty rate of a finished product is less than that of the inputs. A zone operator may then choose either duty rate of the inputs or of the finished good, whichever is lower

Warehousing/Distribution Operations

Companies that are involved with the storage, handling, and movement of goods into or outside of the U.S. may find several advantages in utilizing FTZs
Companies may also take advantage of Duty Deferral, another key benefit of the U.S. FTZ program. Duty Deferral refers to a company's ability to delay paying duties on imported goods until they are ready to import the product into the U.S. Companies may also choose to pay the duty rate on a finished product rather than individual components allowing for additional savings.
Duty Elimination can also occur if a company never imports to the U.S. Duty is never paid when exporting goods outside of an U.S. FTZ.
Reduction in entry fees occurs in an U.S. FTZ because entry processing is consolidated into a single weekly filing rather than filling with each imported shipment.

Supply Chain Optimization

BENEFITS TO THE U.S. FOREIGN-TRADE ZONES PROGRAM

Enhanced global competitiveness for US operations
Local communities gain a valuable tool to attract both US and foreign investments
Improve fairness for US companies in FTZs, particularly when trade policies inadvertently favor companies located outside the US
Opportunities for duty savings, reductions, and/or deferrals
Promoting US activity and helping to balance trade
Potential for savings on fees and taxes
And much more

NAFTZ SERVICE PROVIDER MEMBERS

Are you looking for help to learn more about how you can benefit from the U.S. FTZ program or to get started operating your business in an U.S. FTZ? Check out this list of U.S. FTZ service providers that can assist with your U.S. FTZ or related needs and questions:

https://members.naftz.org/serviceproviderspublic

CONSIDER BECOMING A MEMBER

Another great place to start in your U.S. FTZ journey is by attending NAFTZ’s “Fundamentals of FTZs” seminar. The course provides an opportunity to learn from U.S. FTZ program experts and network at the same time! Here you will learn about:

U.S. Foreign-Trade Zone Benefits
U.S. FTZ Application and Activation Process
Inventory Control and Recordkeeping in an U.S. FTZ
Procedures and Filings for Admitting and Withdrawing Merchandise
Periodic Reporting and other Special Circumstances in U.S. FTZs

Once you've been approved by the Foreign-Trade Zone Board to participate in the program, consider a membership with NAFTZ!

NAFTZ serves as a valuable resource for staying informed on regulatory updates. As a member, you gain access to a supportive community of professionals. Additionally, NAFTZ offers educational resources, training programs, and exclusive events that can significantly contribute to your understanding of the FTZ program. Joining NAFTZ provides you with a comprehensive support system, helping you navigate the complexities of the U.S. FTZ landscape and ensuring that you are well-equipped to make informed decisions throughout your journey with the U.S. FTZ program.

Click to review our different membership types and to learn more about the benefits of becoming a member.

Grantee Member

Operator/User Member

Service Provider Member