RK Group’s FTZ Serves Silicon Valley & Northern CA
“Foreign Trade Zones (FTZ) foster economic development and enhance the global competitiveness of U.S. businesses.”
– Joe Hedges, Grantee, City of San Jose’s Office of Economic Development
What is a Foreign Trade Zone?
Foreign Trade Zones (FTZs) were established to increase global competitiveness of U.S. based companies. FTZ sites are located in or near a U.S. Customs Service port of entry, and is legally considered outside of U.S. Customs territory for the purpose of duty and tariff. The program provides FTZ users (including importers, exporters, manufacturers, and distributors) with cost-saving benefits and logistical efficiency. In addition, FTZ facilitates cooperative international trade, particularly for businesses engaged in manufacturing or distribution. Because of its central Silicon Valley location and proximity to the Port of Oakland, many Fremont businesses may benefit from the FTZ program. The RK Group operates a General Purpose Foreign Trade Zone in its 192,000 SF warehouse in Fremont.
How can my company benefit from a Foreign Trade Zone?
Cash flow savings can result since FTZ users pay U.S. Customs duties only when merchandise is shipped into a Customs territory. Inventory held in an FTZ is exempt from payment of duties until shipped.
No customs duties are payable on merchandise which is exported from an FTZ or which is damaged, scrapped or unused.
Duty reduction enables any FTZ importer or manufacturer to pay the customs duty rate applicable to either the imported components or the finished product, whichever is lower.
Weekly Entry Savings
FTZ users can save weekly processing fees by filing only a single Customs Entry per week, rather than filing one Customs Entry per shipment. Companies outside FTZs pay a 0.3464% fee for every formal entry processed by U.S. Customs. In addition, FTZ users can move merchandise faster through the delivery cycle by controlling inventory levels and removing costly time from the supply chain. Products made overseas may be brought into an FTZ for storage or consolidation with other products, allowing distribution of complete shipments to customers.
Good entering a foreign trade zone may be assembled, manufactured, repackaged, tested, stored, scrapped, sampled, salvaged, kitted, relabeled, processed, manipulated.