What Are
Foreign-Trade
Zones?
Foreign-Trade Zones make importing and exporting easier!
If your company does business internationally, the Foreign-Trade Zone program can help you save money, expedite Customs procedures, and operate more efficiently.
Foreign-trade zones (FTZs) are designated locations in the United States where companies can reduce, defer, and even eliminate the cost of import duties.
These sites are legally considered “outside” of U.S. Customs territory and benefit from special procedures that streamline import-export activities.
- Customs entry is only filed when imports leave an FTZ and enter the U.S. market, deferring duty payments and entry fees until you’re ready to ship.
- If your merchandise never enters the U.S. market, then you never have to pay import duties.
- And in the meantime, goods stored in an FTZ can be freely manufactured, packed, processed, labeled, cleaned, repaired, assembled, displayed, destroyed, and more!
This empowers U.S.-based companies to inspect shipments, manufacture imported materials, and package them for sale — before paying any import taxes.
FTZ Quick Facts
Established In
1934
Through An Act
Of Congress
$949
Billion
Imported In 2023
1,300
Active
FTZ Operators
550,000
Americans Directly
Employed At FTZ Sites
INzone Is Your FTZ Facilitator
INzone is a nonprofit subsidiary of the Indianapolis Airport Authority responsible for administering the Central Indiana FTZ, also known as FTZ #72. Our service area includes the 41 counties surrounding the Indianapolis International Airport — and all the designated FTZ sites within them.
We’re here to help you navigate the federal Foreign-Trade Zone program and learn how to unlock new opportunities for your company.
Because you don’t have to relocate your business to operate in a FTZ! Any qualified facility can apply to become a designated FTZ site, bringing a wealth of benefits right to your backyard.
The Benefits of Foreign-Trade Zones
Operating in an FTZ gives you access to a variety of unique privileges that streamline Customs procedures and reduce import duties. Whether you’re a distributor or a manufacturer, these benefits can offer a distinct competitive advantage to global companies that do business in the United States.
Significant Cost Savings
Duty Deferral
Import duties and excise taxes are only paid when goods leave an FTZ to enter the U.S. market, giving companies a distinct cash flow advantage.
Duty Elimination
In an FTZ, you never have to pay duties on imported goods that are re-exported without entering the U.S. for consumption.
Duty Reduction
FTZ users can choose to pay import duties on either the raw materials OR the finished product, whichever duty rate is lower.
Reduced Fees
In an FTZ, Merchandise Processing Fees are capped at a maximum of $634.62 per weekly entry, regardless of how many shipments are processed that week.
Manufacturing Savings
No duties are charged on defective merchandise or unrecoverable waste. Scrap from manufacturing can also be valued at scrap duty rates.
No Inventory Taxes
Inventory held within an FTZ is not subject to state and local ad valorem taxes where applicable.
Lower Insurance Costs
FTZs eliminate the need to add duties to your insurable value, and Customs' strict security requirements help deter theft and lower insurance premiums.
Free Returns
Exported goods returned to an FTZ do not require duty payments, eliminating the need for duty drawback.
Streamlined Logistics
Weekly Customs Entry
FTZ users can file one Customs entry per week instead of per shipment, reducing brokerage costs and empowering companies to do business 24/7.
Direct Delivery
At your port's discretion, imports can be transported in-bond directly to an FTZ without Customs clearance, practically eliminating delays from inspections or holds.
Zone-to-Zone Transfer
Goods can be transported between FTZs without incurring duty fees, which can improve supply chain efficiency between manufacturers and distributors.
Avoid Quotas
Companies can import bulk shipments of quota-restricted goods, store them in an FTZ, and immediately begin shipping when the next quota period opens.
Quality Assurance
FTZ users can inspect their goods on-site and repair, return, or destroy damaged merchandise before it enters the U.S. market and incurs duty fees.
Inventory Control
Customs procedures require increased accountability within FTZs, which often reduces errors, decreases waste, and improves supply chain management.
Exhibition Activities
Many companies use FTZs as display areas for merchandise and machinery because items can be exhibited duty-free and later imported or exported.
On-Site Labeling
No Country-of-Origin labels are required on admittance to an FTZ. Merchandise can be labeled or re-marked at the FTZ to meet entry requirements.
Better Than A Bonded Warehouse
Indefinite Storage
Items can be stored in an FTZ for an unlimited period of time, strategically keeping your inventory at the threshold of the U.S. market.
No Holding Costs
Bonded warehouses charge storage fees and need a Customs bond for all entries, while FTZs require no bonds or additional fees for admittance.
Outside Customs Territory
Unlike bonded warehouses, FTZs are legally considered outside of Customs territory, delaying entry filing until goods enter the U.S. market.
Domestic and Foreign Goods
All merchandise — domestic or foreign — can be admitted to FTZs, allowing companies to combine and commingle them as needed.
Manufacturing Activities
Bonded warehouses have strict limitations on manufacturing, but FTZs allow practically any production activity, so long as it receives prior approval.
Inverted Tariffs
Manufacturing in an FTZ allows companies to pay the duty rate of the finished product, which is usually cheaper than duties on the component parts.
Duty-free Labor and Profit
No duties are owed on value-adding activities in FTZs, including labor, overhead, or profit attributed to production operations.
Ease of Withdrawal
Goods within an FTZ can be easily withdrawn with few limitations — and even temporarily removed and returned without incurring duties.
How Much Will You Save?
Becoming an FTZ can be a rewarding investment for American-based companies, but every business is different. Before submitting an application, we recommend conducting a thorough cost-benefit analysis with the help of an FTZ Consultant to determine if the Foreign-Trade Zone program is right for you.