From large manufacturers to individuals, any size importer or exporter can take advantage of a foreign-trade zone (FTZ). Utilizing an FTZ can significantly reduce costs from customs duties, taxes and tariffs; improve global market competitiveness, and minimize bureaucratic regulations. Outside the United States, there are many other names for FTZs, including free, foreign, or export processing zones.
Below are some benefits of using an FTZ:
Deferral, reduction, or elimination of certain duties;
Relief from inverted tariffs;
Duty exemption on re-exports;
To take advantage of an FTZ, companies need to be able to track their inventory; trace manufacturing and production orders; determine whether material came from domestic or international sources, and classify goods for duty deferrals and reductions. How much a company saves by using an FTZ depends on the size of the company and its business model. Reducing merchandise processing fees alone can save a company a substantial amount of money.