Saving Money With a North Carolina FTZ

If you’re looking for a more economical and streamlined way to manage your company’s foreign or domestic shipments, then a North Carolina Foreign Trade Zone (FTZ) may be just the ticket.

Also referred to as “free trade zones,” FTZs are neutral secured areas that for legal purposes are considered outside of U.S. Customs territory. FTZs offer several economic advantages for businesses involved in international trade.

According to the Economic Development Partnership of North Carolina, th ere are four general purpose FTZs in North Carolina and seven active sub-zones approved for use by individual companies. Kanban Logistics can provide North Carolina FTZ services from a warehouse within FTZ Zone 214.

The NC FTZs are:

Charlotte

Zone #57
Charlotte Regional Partnership
550 South Caldwell Street Suite 760 Charlotte, NC 28202
Tel: (704) 347-8942
Fax: (704) 347-8981

Durham

Zone #93
The Greater Research Triangle Zone
Triangle J Council of Governments
4307 Emperor Blvd., Suite 110
Durham, N.C. 27703
(919) 558-9403

South Eastern North Carolina (SENC)

Zone #214
South Eastern North Carolina (SENC)
North Carolina Department of Transportation
(919) 707-2815

 Greensboro

Zone #230
Piedmont Triad Zone
Piedmont Triad Regional Partnership
416 Gallimore Dairy Road, Suite M
Greensboro, NC 27409
(800) 668-3749
Fax: (336) 668-3749

How do FTZs work?

If you choose to use an FTZ, both foreign and domestic merchandise may enter these areas without a formal customs entry or the payment of customs duties or government excise taxes and without a thorough examination.

Here’s where the savings comes in…

If the final product is exported from the U.S., then no custom duty is levied, according to the Economic Development Partnership of North Carolina. If the final product is imported into the U.S., duty and excise taxes are due at the time of transfer from the foreign trade zone and formal entry is made into the U.S.

The duty is then paid on the product itself or its imported parts, whichever is lower.

Generally, merchandise is exempt from payment of duty even if the products are:

• Manipulated
• Used in a manufacturing process
• Inspected
• Combined with other domestic or foreign materials
• Displayed for sale
• Re-exported
• Spoiled or damaged goods or waste materials may be disposed of or re-exported without payment of duty.

The FTZ cost breakdown

To help companies understand the cost savings associated with FTZs, The FTZ Corporation says firms located outside of FTZs pay a .21% Merchandise Processing Fee (MPF) for each and every formal Customs Entry (shipment). There is a minimum $25 and a maximum $485 MPF per Entry, regardless of the duty rate on the imported merchandise. The maximum MPF applies to Entries (shipments) with a value exceeding $230,952. Companies often receive many shipments exceeding this value.

Consider this example from The FTZ Corp:

An importer receives 10 shipments per week, each with a value exceeding $230,952, and pays an MPF of $4,850 ($485 x 10) per week.

If this number is annualized, the MPF the importer pays is $252,200(52 x $4,850) per year.

The same importer using the FTZ Weekly Entry procedure would pay $485 per week as shipments leave its FTZ facility, resulting in a weekly savings of $4,365 and annual savings of $226,980.

“The FTZ program is designed to help companies operating in the U.S. compete globally and therefore create more jobs throughout the country,” said Piedmont Triad Partnership’s Penny Whiteheart in Take Advantage of Foreign Trade Zones to Maximize Corporate Resources.