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- FTZ vs. Bonded Warehouse
FTZ vs. Bonded Warehouse
While a Foreign Trade Zone (FTZ) can offer significant benefits and substantial savings to a company, we understand that the program may not be right for everyone. Many times, dependent on the operations that need to occur, a U.S. bonded warehouse may fulfill the needs of a company. At the same time, in other cases, an FTZ may bring considerable savings. To have a better understanding of which program is best to use, below are some of the significant differences between an FTZ and a bonded warehouse.
| Foreign Trade Zone (FTZ) | Bonded Warehouse | |
|---|---|---|
| Customs Entry | No entry required | Entry required to admit goods into warehouse |
| Permissible Cargo | Foreign and Domestic Goods | Foreign goods only |
| Duties | Only upon entry into the U.S. market | Owed prior to release of goods from the bonded warehouse |
| Inventory Tax | Foreign goods not taxed | All goods are taxed |
| Storage Period | Unlimited | May not exceed five years |
| Control of Goods | FTZ controls goods | CBP controls goods |
| Domestic Goods | May be admitted | May not be admitted |
| Permissible Activity | Clean, repack, sort, destroy, grade, label, assemble, manufacture, exhibit, and co-mingle with other freight (foreign and domestic) |
Clean, repack and sort under CBP supervision |
| Manufacturing | Permitted | Not permitted |
| Waste | Duty is only paid on items leaving the FTZ into U.S. market for consumption |
Duty is due on all waste and/or damaged goods |