How do you set up a foreign trade zone?

How do you set up a foreign trade zone?

To get foreign-trade zone status:

1. Apply Online.
2. Designate what type of authority you wish to have (e.g., general purpose, subzones, and production)
3. Pay a fee to enter an FTZ.
4. Activate your license through the U.S. Customs and Border Protection (CBP).

What kind of activities take place in a foreign trade zone?

Here is a list of activities that are permitted in an FTZ:

• Product Assembly.
• Product Testing.
• Sampling.
• Package Relabeling and Repackaging.
• Product Manufacturing.
• Product Storage.
• Merchandise Consolidation.
• Breakdown of shipments into separate deliveries.

Who regulates approves and activates FTZ’s?

The Board also regulates the administration of foreign-trade zones and the rates charged by zone “grantees”. CBP must approve activation of the zone before any merchandise is admitted under the Foreign-Trade Zones Act.

How many foreign trade zones are there in the US?

There are 186 active FTZs in the United States. More than 2,900 companies currently utilize the program. FTZs provide significant advantages for U.S.-based firms: Duty Deferral: Customs Duties are paid only if and when goods are transferred out of the Zone and into U.S. Customs territory.

How does a foreign-trade zone work?

Foreign-Trade Zones allow companies to bring items onto US soil without paying the duty tax, allowing them to store these goods free of tariff charges, or use parts to manufacture a finished product that can then be exported without the US import/export surcharges.

What are the benefits of a foreign-trade zone?

What are the Benefits of a Foreign-Trade Zone?

• Duty Exemption.
• Duty Deferral.
• Duty Reduction or Inverted Tariff.
• Merchandise Processing Fee (MPF) Reduction.
• Streamlined Logistics.
• Quota Avoidance.

How does a foreign trade zone work?

What are the benefits of a foreign trade zone?

Why do countries carry on trade with each other?

Countries trade with each other when, on their own, they do not have the resources, or capacity to satisfy their own needs and wants. By developing and exploiting their domestic scarce resources, countries can produce a surplus, and trade this for the resources they need.

What brings in the most money from foreign exports?

Services are the biggest US export, with total foreign sales of $778 billion last year. These are the service industries that bring in the most money: Travel and transportation: $236 billion.

What is the purpose of a foreign-trade zone?

A foreign-trade zone is a designated location in the United States where companies can use special customs procedures that help encourage U.S. activity and value added – in competition with foreign alternatives – by allowing delayed or reduced duty payments on foreign merchandise, as well as other savings.

Why do companies use foreign trade zones?

Why do companies use foreign trade zones? To maintain the cost competitiveness of their U.S.-based operations vis-a-vis their foreign-based competitors. For a company, zone status provides an opportunity to reduce certain operating costs associated with a U.S. location that are avoided when operating from a foreign site.

What does foreign trade zone stand for?

In the United States, a foreign-trade zone (FTZ) is a geographical area, in (or adjacent to) a United States Port of Entry, where commercial merchandise, both domestic and foreign receives the same Customs treatment it would if it were outside the commerce of the United States.

Where are foreign trade zones located?

A foreign-trade zone is a secured area under U.S. Customs’ supervision that is generally considered outside United States territory (for commerce purposes) upon activation. A foreign-trade zone is typically located in or near a U.S. Customs port of entry and falls under the authority…

What is the abbreviation for Foreign Trade Zone?

Foreign-Trade Zones (FTZ) are secure areas under U.S. Customs and Border Protection (CBP) supervision that are generally considered outside CBP territory upon activation. Located in or near CBP ports of entry, they are the United States’ version of what are known internationally as free-trade zones.