New designation helps manufacturers take advantage of Foreign Trade Zone benefits
- March 24, 2014
It just became a lot easier for manufacturers to take advantage of the economic benefits of the Foreign Trade Zone (FTZ) at the Port of Virginia.
The port is the grantee of FTZ #20, one of the largest zones geographically in the country. Earlier this month, the site received approval to be reorganized under the Alternative Site Framework (ASF). The main benefit of the ASF is that it allows companies within the zone to receive a FTZ site designation within 30 days after applying to the Foreign-Trade Zones Board. The standard process can take 10 to 12 months.
FTZs are strategic tools for U.S. manufacturers. These are secure areas that are considered “outside” the U.S. Customs and Border Patrol supervision, allowing manufacturers to lower their taxes and streamline exports.
Companies operating in FTZs are only required to pay duties on products if and when they enter the U.S. market place. That means companies operating in an FTZ can defer, reduce or eliminate duties on imported products.
Product components can be stored, assembled, manufactured, tested or repurposed in the zone, and duties are not paid on products if they then are exported.
“This new development at the Port of Virginia will encourage companies – current and potential port users – to choose to do business and create jobs within the Foreign Trade Zone that is primarily served by our port,” Gov. Terry McAuliffe said in a statement. “The Port of Virginia is one of the Commonwealth’s strongest economic assets, and this new approval to expedite Free Trade Zone designation will greatly improve our ability to bring more business to the port and create more jobs along the way.”
Under ASF, the FTZ #20 service area includes the counties of Accomack (partial), Gloucester, Isle of Wight, James City, Mathews, Northampton, Southampton, Sussex, Surry and York, and the cities of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach and Williamsburg.