Busting 5 Foreign Trade Zone Myths

Foreign Trade Zones (FTZ) are a great solution for reducing tariff rates, freezing duties, and increasing cashflow. However, these areas are often misunderstood, which means that businesses can be hesitant to utilize them and experience these savings.

To help clarify, our team sought out and busted five different myths and misunderstandings about Foreign Trade Zones. We hope by the end of this blog, you’ll feel confident that you know how our FTZ Division can help you.

Myth 1: FTZs are too complex to understand.

Foreign Trade Zones may seem overly complicated, but they are really much easier to understand than most people think.

These areas are places on United States soil that the government treats as foreign only for the sake of customs. That means that when items are shipped to an FTZ, even though those items are technically within United States’ territory, they haven’t been imported yet through customs. Then, when a client requests their items from the FTZ, they are officially imported into the United States.

This allows businesses to store items much closer to their areas of operation than if those items needed to be ordered from overseas. FTZs allow for faster fulfillment, and they also help freeze duties and meet quotas.

Myth 2: My business needs to register as an FTZ.

Although some businesses do register their land as a Foreign Trade Zone, you don’t need to be affiliated with an FTZ to benefit from it.

Our Foreign Trade Zone offers value-added services like sub-assembly and quality assurance for materials that are sent to or stored in our zone. This helps lower tariff rates and freeze duties on imports before they can rise. Then, when our clients need the materials, they simply import them from our zone. It’s a much easier way to enjoy the benefits of an FTZ without needing to go through the steps to register your business as a Foreign Trade Zone.

Myth 3: Utilizing an FTZ isn’t a viable strategy for most companies.

FTZs are useful for most manufacturing companies and for companies in other industries that import their goods.

However, our FTZ Division can help manufacturing companies save even more, since we can partially assemble parts before they’re imported. By doing this, we reduce tariffs on items before they’re imported into the United States, which saves money for our clients.

Myth 4: An FTZ is just a zone where items are stored before they’re imported.

Although this is true for some FTZs, our Foreign Trade Zone is different. Because we have over twenty years of manufacturing experience, sub-assembly can take place while items are still in the zone.

Our team also sifts through your shipments to find items that don’t meet quality measures. Then, instead of importing those items into the United States, we destroy them, so you never need to pay tariffs on parts you can’t use.

Myth 5: It’s hard to get started with an FTZ or to see a quick ROI.

It’s incredibly easy to start benefitting from an FTZ. In fact, we work with clients to provide a return on their investment by the next quarter. Plus, since we only get paid based on what clients save, it’s a safe and reliable way to increase cashflow for organizations that import pieces from around the world.

Are you ready to get started? Reach out to our team today. We can’t wait to answer your FTZ questions and tell you how we can help you save money.

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