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Businesses located in the MDBP can take advantage of the Fforeign Trade Zone (FTZ), which is designed to allow businesses to attract and promote international trade and commerce.  The Memphis Depot Business Park is a general-purpose zone, site four (4).

Benefits
Inside a FTZ, many companies are able to achieve such dramatic savings that they can effectively compete with manufacturing plants located outside the U.S. How much a company can save by operating in an FTZ obviously depends on a long list of factors unique to a business. Here are some of the benefits:

  • Improved Cash Flow—By delaying tax and customs duty payments, a business can use cash for other needs. Goods enjoy a duty free status until they enter the customs territory of the United States. Goods may also be transferred to or from other ports of arrival in the U.S. to a FTZ under approved U.S. Customs procedures without a Formal Customs Entry or incurring duty charges. Imported merchandise can be re-exported without paying duty charges.

  • Inverted Tariff Benefits—In many instances, duty rates are higher for component parts than the rates charged on an assembled product. For example, an imported machine part may require a duty rate of 8%, while a finished machine that included the part may be charged at only 3%.

  • Lower Inventory Costs—When companies pay taxes and insurance premiums on inventory imported from abroad, the value of inventory normally includes any duties, taxes and brokerage fees. Those costs are lowered for an inventory maintained in an FTZ because no duty is charged until the goods enter the U.S. Customs territory.

  • Security and Quality Assurance—The U.S. Customs Service requires extra security measures for FTZs, so they are normally more secure than areas immediately around them. With stricter security and because federal penalties are assessed for taking goods out of an FTZ without authorization, there is usually less theft from an FTZ. Some insurance companies charge lower premiums on goods stored in an FTZ.

  • Distribution Savings—Freight carriers usually charge by weight or size and in many instances, partially disassembling an item enables a shipper to fit more items into a container. When a company ships parts in bulk for assembly in an FTZ, it can often lower its per unit transportation costs.

  • Other Benefits—Imported goods subject to quota limits can be held in an FTZ until the quota reopens. Scrap or waste materials may be thrown away and the amount of duty paid lowered by the value of the scrapped goods. A business may elect to freeze duty rates at the rates in effect when the goods enter the zone. This is valuable when you know duty rates are scheduled to increase or when a manufactured product's duty rates are scheduled to increase or when a manufactured product's duty rate is higher than that of its components. A business can also elect to pay the rate in effect when the merchandise leaves the zone. This produces savings when it is known that duty rates are scheduled to go down
 
 
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