A Foreign Trade Zone (FTZ) is a designated location within a country where merchandise receives the same customs treatment it would if it were outside the commerce of the country. In the United States, these zones were created to encourage international commerce and reduce trade barriers.
FTZs offer major advantages such as the deferral, reduction, or even elimination of customs duties. Goods entering an FTZ are not subject to tariffs until they enter the domestic market; re‑exports can be fully waived.
Companies also benefit from streamlined customs procedures and faster clearances, improving logistics efficiency—especially for time‑sensitive industries.
FTZs also improve inventory management, enabling storage without duties—boosting cash flow and lowering carrying costs.