What is a Foreign Trade Zone?

Foreign Trade Zones (FTZ) are secure geographical areas located within or near United States ports. However, U.S. Customs treats these properties as though they stand outside national borders.

Manufacturers have traditionally used FTZs to lower import duties and taxes because the merchandise they receive at an FTZ is still considered international commerce.

All 50 states and Puerto Rico have established FTZs. Currently there are some 2,500 firms actively engaged in zone activities, employing over 340,000 people. The total value of merchandise moving through these FTZs is more than $410 billion annually.

Recent changes to the FTZ program have created new and even greater opportunities for non-manufacturing importers to cut costs and streamline logistics.

When merchandise is in a Foreign-Trade Zone, customs duties and federal excise taxes may be deferred until the goods exit the FTZ and enter the territory of U.S. Customs. There are no time limits for how long merchandise can remain in the FTZ, giving businesses flexibility in paying the required taxes and duties.