WHAT EXACTLY IS A FOREIGN TRADE ZONE?
An FTZ is the U.S. Version of an International Free Trade Zone. Always located near a Port of Entry, an FTZ can be used to store foreign or domestic goods, re-package materials, assemble products, manufacture or re-export goods without paying Customs duties. Merchandise can be held indefinitely within an FTZ without any payment of Customs duty. A U.S. Department of Commerce program born in 1934, FTZs are operated as public utilites by states, port authorities, other political groups, or corporations charted by the state.
THERE ARE TWO TYPES OF FTZS:
General Purpose Zone
Here, leased storage or distribution space is provided to users in general warehouse buildings. This FTZ is for both long-term or occasional use. Airports and international convention centers are often set up as public FTZ sites as well.
Individual companies can apply to the U.S. Department of Commerce to designate an area of their facility as a Subzone. This situation is ideal for companies located some distance from a General Purpose Zone.