What are Free Trade Zones (FTZs) designed for?

Free Trade Zones (FTZs) are designed to allow businesses to delay the payment of importation duties on products entering a country. In the context of the United States, goods that are brought into an FTZ are exempt from customs duties until they leave the zone and enter the domestic market. This can provide companies with significant cash flow advantages, as they can defer these costs and potentially avoid duties altogether if the products are re-exported from the FTZ.

Additionally, FTZs aim to encourage trade and economic activity by creating an environment that minimizes barriers and costs associated with importing goods. Businesses can benefit from other advantages as well, such as streamlined customs procedures, which can facilitate international trade and enhance competitiveness.