Five Benefits to Foreign Trade Zones

Posted by Maeghan Hurley on Tue, Jul 08, 2014 @ 09:46 AM

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Businesses approved as Foreign Trade Zones experience a series of benefits that, inevitably, save them from having to pay fees and allow them to process foreign and domestic product more quickly. 

1. Alleviates Cost of International Trade

The purpose of Foreign Trade Zones encourages international trade by alleviating costs of international merchandise processing.

2. Duty Exemption

In FTZs, many duties on goods and merchandise are eliminated, especially on waste, re-exporting, or processing raw materials. When any product is re-exported to its country of origin, no duty is charged at any point of the process.

So if raw material gets processed only and then is re-exported, no duties have to be paid.

3. Improved Merchandise Processing

FTZs allow businesses and distribution hubs the ability to transfer goods in one FTZ to another without having to pay any duty on the product, which allows distribution hubs to process more product faster, zone-to-zone.

4. Storage Flexibility/Tax Exemption

Depending on market demands, FTZs allow businesses to be more flexible with how long product needs to stay in storage before being processed—all without having to pay state or local taxes on the product.  

5. U.S. Businesses Competitive Advantage

FTZs eliminate certain duties and taxes that other foreign competitors likely still have to pay, therefore giving U.S. businesses a distinct advantage over their foreign counterparts.


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Topics: Supply Chain, Foreign Trade Zone, Oversea Supplier, Shipping, Container Processing