Foreign Trade Zones (FTZs) help U.S. companies improve their competitive position over their counterparts abroad. FTZs are most useful to firms that:
- Import products and pay U.S. Customs duties
- Import large numbers of shipments – whether or not duties are paid
- Export domestic products on which federal excise taxes are paid
- Maintain large dollar value inventories subject to State and local ad valorem taxes
- Maximizes use of sites throughout Miami-Dade County that already accommodate businesses of all sizes that are already engaged in international trade
In addition, the Foreign Trade Zone (FTZ) program allows U.S.-based companies to defer, reduce or even eliminate customs duties on products admitted to the zone.
- Deferral of duties
Customs duties are paid only when and if merchandise is transferred into U.S. Customs and Border Protection territory. This benefit equates to a cash flow savings that allows companies to keep critical funds accessible for their operating needs while the merchandise remains in the zone. There is no limit on the length of time that merchandise can remain in a zone.
- Reduction of duties
In a FTZ, with the permission of the Foreign Trade Zones Board, users are allowed to elect a zone status on merchandise admitted to the zone. This zone status determines the duty rate that will be applied to foreign merchandise if it is eventually entered into U.S. commerce from the FTZ. This process allows users to elect the lower duty rate of that applicable to either the foreign inputs or the finished product manufactured in the zone. If the rate on the foreign inputs admitted to the zone is higher that the rate applied to the finished product, the FTZ user may choose the finished product rate, thereby reducing the amount of duty owed.
- Elimination of duties
No duties are paid on merchandise exported from a FTZ. Therefore, duty is eliminated on foreign merchandise admitted to the zone but eventually exported from the FTZ. Generally, duties are also eliminated for merchandise that is scrapped, wasted, destroyed or consumed in a zone.