A Foreign Trade Zone or Free Trade Zone is an enclosed, secure area that is located outside U.S. customs territory. A company located within a Foreign Trade Zone does not pay duties or personal property taxes on goods stored within the zone. Foreign and domestic goods may enter a zone to be stored, processed, distributed, manufactured, assembled or exhibited. Foreign trade zones may be classified as general-purpose zones or special- purpose zones (subzones). Subzones are single-user facilities for companies unable to efficiently manufacture or process at the general-purpose zone site.
Zone status provides the opportunity to reduce certain domestic operating costs that are not incurred if operating from a foreign state. Benefits to companies located in a Foreign Trade Zone include the following:
- Duty is deferred on imported goods admitted to the zone, thus improving cash flow for the company.
- No U.S. duty is assessed when exporting goods from the zone.
- Processing goods within the zone can eliminate or lower tariffs.
- Duties can be avoided on defective or damaged goods by inspecting and testing imported goods within a zone.
- Savings may be realized in transport insurance.
- Inventory stored in a Foreign Trade Zone is exempt from local property taxes.
Our office works closely with the Ports of Indiana to designate subzones in Michigan City.
Please contact the Economic Development Corporation Michigan City, Indiana at (219) 873-1211 if you are interested in utilizing the FTZ designation.