What is the Foreign Trade Zone in Clark County?
The majority of company owners are in business to make money. If they can find ways to save on the costs related to their company or their property, they will be able to increase their earnings and their cash flow. One of the more under-utilized cost-saving methods available in Clark County is the Foreign Trade Zone (FTZ). If your business buys commercial property or sets up shop within the FTZ, you can achieve some pretty sizable cost savings and other benefits by taking advantage of this program.
What Are Foreign Trade Zones (FTZ)?
FTZs are dedicated physical areas within the United States authorized by the federal government where foreign and domestic merchandise is considered to be in international commerce and outside of US Customs territory. Raw materials imported from outside the country are not subject to taxes and tariffs in a FTZ as they would be in other areas of the US.
For example, the Las Vegas and Reno FTZs allow companies to bring raw materials and foreign goods into the country without requiring the businesses to pay excise taxes or customs duties until the products being manufactured leave the FTZ. The elimination of the duty and customs fees save these companies a great deal of money.
Merchandise entering a foreign trade zone may be:
- Assembled, Manipulated, Repaired
- Cleaned, Manufactured, Salvaged
- Destroyed, Processed, Sampled
- Displayed, Re-labeled, Stored
How Does a Foreign Trade Zone Work?
Typically, when foreign cargo comes into the United States, it is required to go through Customs and the company bringing the items into the country must pay US Customs duties right away. In a FTZ, merchandise is treated as if it never entered the US. No duties or taxes are required to be paid.
Companies operating within FTZs can move foreign or domestic merchandise into the zone for storage, assembly, processing and manufacturing. The advantage to having FTZs across the country is that it helps encourage American companies to keep their manufacturing and processing work in the US by offering cost savings with the duty and tax benefits. This helps local businesses compete better with foreign companies.
Keep in mind that FTZs are subject to the country’s laws and regulations, as well as the laws of the states and communities where they are located. However, they are not as restricted as those areas under Customs and Border Protection (CBP). The FTZ program helps businesses with their cash flow and allows them to save money on tariffs. They can then invest that money back into their companies.
Advantages of a Foreign Trade Zone
There are a number of advantages to operating your business in a FTZ:
- Exemption from paying duty fees
- Tariff and tax reductions
- Deferral of duty fees until imported goods are later exported
- Increased cash flow
- Streamlined logistics
- Lower insurance costs
- Opportunity for volume discounts with other tenants
- Improve global market competitiveness
- Reduced transportation costs
- Merchandise Processing Fee (MPF) reduction
- Better inventory control
- Minimize bureaucratic regulations
- Better security
What Are the Requirements to Qualify for the Foreign Trade Zone in Clark County?
In Clark County, the Las Vegas Global Economic Alliance (LVGEA) is the point of contact for the local FTZ, designated Zone Number 89. The Clark County FTZ Program allows direct access to the FTZ and its benefits to any business located within the county.
To participate in the Clark County FTZ, your business must be located within Clark County, or within 60 miles or 90 minutes of one of the county’s ports of entry. Your business must also bring foreign goods or raw materials for manufacturing and/or assembling. This includes the following processes:
- Mix with foreign or domestic goods
The steps to be admitted to the Clark County FTZ are:
- Submit a FTZ application for Distribution or Manufacturing operations to the FTZ Board.
NOTE: Application processing can take between 30 days to 5 months, depending on the type of application you submit.
- After application approval, work with the CBP for local activation of your site.
NOTE: Activation may take 3-6 months, depending on your company.
- Once activated, you can begin to admit merchandise under zone procedures – not before activation!
The Clark County FTZ offers substantial savings for businesses that service international markets. If your business is interested in learning more about the Clark County FTZ Program, Graham Team Commercial Real Estate can help with any questions you may have. As a successful local real estate brokerage firm, Graham Team Commercial Real Estate is ready to guide you through the process of finding the right FTZ location for your business. With our help, you can set up your business in the perfect place to start benefiting from all the FTZ Program has to offer.