Vision Foreign Trade Zone 166
Welcome to Vision FTZ 166, South Dade's Foreign Trade Zone located in Homestead, Florida. Read on to learn more about us and what we can do for you.
About Us
Foreign Trade Zone 166
Vision FTZ 166 is a General Purpose zone located in east Homestead. It is the southernmost free trade zone in the continental United States and provides a unique opportunity for Latin American operations. Comprised of approximately 1,000 acres, the FTZ encompasses the Homestead Park of Commerce, portions of the Homestead-Miami Speedway, the Homestead Baseball Complex and adjacent lands to the south. Vision Foreign Trade Zone, Inc. is the FTZ grantee.
FTZ 166 lies approximately one mile from the Florida Turnpike, which in turn provides access to Interstates 75 and 95. Miami International Airport is 30 miles to the north, while the Port of Miami is 35.5 miles away. Present development activity is focused on the 280 acre Park of Commerce. This site features a state of the art spine road, utilities and a high-speed fiber optic network.
As the grantee, Vision Foreign Trade Zone, Inc. also has the capability to create Sub Zones within South Miami-Dade County (generally, south of SW 152nd Street). Sub zones are special purpose Foreign Trade Zone sites created for use by one company and for a specified, limited purpose -- usually for manufacturing or processing activities. They are typically located within or overlay the user’s facility. No retail activity is allowed within a designated sub-zone; however, borders can be drawn to segregate FTZ operations from other portions of the facility.
Sub Zones must meet the “Public Interest” test imposed on all FTZs. They are established as adjuncts to the nearest existing general-purpose zone, however they do not need to be adjacent to the existing General Purpose Zone. Sub Zones must receive the concurrence of the zone grantee. Typically, a sub zone can be approved if the company is unable to physically relocate existing facilities into the general-purpose zone site or if such a move would not be financially feasible.
What is a Foreign Trade Zone?
Foreign or "free" trade zones (FTZ) are federally designated secured areas that have the special legal status of being outside of a nation's Customs territory. The purpose of the zones is to attract and promote international trade and commerce. Foreign trade zones are usually located in or near Customs’ ports of entry, industrial parks or terminal warehouse facilities.
A Foreign Trade Zone (FTZ) in the United States operates as a public utility according to a grant from the Foreign Trade Zones Board. FTZs are designed to increase the use of American labor and increase capital investment in the United States by allowing activity to occur in the United States prior to the application of U.S. customs laws. The intent is to equalize the customs treatment of the activity with similar activities occurring offshore or overseas.
There are two types of zones, General Purpose Zones and Sub Zones. A general-purpose zone is a designated area established for multiple activities by multiple users. A special purpose sub zone is established for a limited purpose that cannot be accommodated within an existing general purpose zone. For example, sub zone status may be granted to existing manufacturing facilities. Sub zones must be sponsored by the grantee of an existing general purpose zone.
FTZs operate under the Foreign Trade Zone Act of 1934, which has been codified in the U.S. Code as Title 19, Sections 81a through 81u. The Foreign Trade Act is administered through two sets of regulations; the Foreign Trade Zone Regulations (15 CFR Part 400) and U.S. Customs and Border Protection Regulations. Although FTZs are legally outside the Customs territory of the United States, other federal laws, such as the Federal Food, Drug, and Cosmetics Act are applied to products and establishments within such zones.
The zones provide sites where a broad range of commercial activities involving foreign and domestic merchandise, which otherwise might have occurred abroad for tariff or trade reasons, can take place. Within an FTZ, merchandise may be stored, inspected, sampled, tested, displayed, relabeled, repackaged, distributed, repaired, mixed, cleaned, salvaged, recycled, processed, assembled or manufactured (requires special permission) without being subject to the US customs laws governing the entry of goods or the payment of duties.
Business Benefits
The FTZ program helps American companies improve their competitive position versus their counterparts abroad. FTZs will prove most useful to firms that:
- Import products and pay U.S. Customs duties
- Import large numbers of shipments – whether or not duties are paid
- Export domestic products on which federal excise taxes are paid
- Maintain large dollar value inventories subject to State and local ad valorem taxes
Impact on Duties
The FTZ program allows U.S.-based companies to defer, reduce or even eliminate Customs duties on products admitted to the zone.
1. Deferral of Duties: Customs duties are paid only when and if merchandise is transferred into U.S. Customs and Border Protection territory. This benefit equates to a cash flow savings that allows companies to keep critical funds accessible for their operating needs while the merchandise remains in the zone. There is no time limit on the length of time that merchandise can remain in a zone.
2. Reduction of Duties: In a FTZ, with the permission of the Foreign-Trade Zones Board, users are allowed to elect a zone status on merchandise admitted to the zone. This zone status determines the duty rate that will be applied to foreign merchandise if it is eventually entered into U.S. commerce from the FTZ. This process allows users to elect the lower duty rate of that applicable to either the foreign inputs or the finished product manufactured in the zone. If the rate on the foreign inputs admitted to the zone is higher that the rate applied to the finished product, the FTZ user may choose the finished product rate, thereby reducing the amount of duty owed.
3. Elimination of Duties: No duties are paid on merchandise exported from a FTZ. Therefore, duty is eliminated on foreign merchandise admitted to the zone but eventually exported from the FTZ. Generally, duties are also eliminated for merchandise that is scrapped, wasted, destroyed or consumed in a zone.
ADDITIONAL BENEFITS
Direct Delivery
Direct Delivery
Direct Delivery
This procedure expedites the movement of cargo out of the Port into an FTZ, thereby supporting just-in-time inventory methodologies.
Elimination of Drawback
In some instances, duties previously paid on exported merchandise may be refunded through a process called drawback. The drawback law has become increasingly complex and expensive to administer. Through the use of a FTZ, the need for drawback may be eliminated allowing these funds to remain in the operating capital of the company.
Taxes
Direct Delivery
Direct Delivery
By federal statute, tangible personal property imported from outside the U.S. and held in a zone, as well as that produced in the U.S. and held in a zone for exportation, are not subject to State and local ad valorem taxes.
Labor, Overhead and Profit
In calculating the dutiable value on foreign merchandise removed from a zone, zone users are authorized to exclude zone costs of processing or fabrication, general expenses and profit. Therefore, duties are not owed on labor, overhead and profit attributed to production in a FTZ.
Quotas
Direct Delivery
Weekly Entry Economies
U.S. quota restrictions do not apply to merchandise admitted to zones, although quotas will apply if and when the merchandise is subsequently entered into U.S. commerce. Merchandise subject to quota, with the permission of the FTZ Board, may be substantially transformed in a FTZ to a non-quota article that may then be entered into U.S. Customs and Border Protection territory, free of quota restrictions. Quota merchandise may be stored in a FTZ so that when the quota opens, the merchandise may be immediately shipped into U.S. Customs and Border Protection territory
Weekly Entry Economies
Weekly Entry Economies
Weekly Entry Economies
The savings are generated by reducing the Merchandise Processing Fees (MPF) paid to U.S. Customs. They can be significant for firms that process large number of entries. This fee is not a duty, but a non-refundable user fee assessed on each transaction and is designed to cover the administrative expenses incurred by Customs in processing formal entries for U.S. consumption. The fee is 0.21 percent of the value of the shipment – with a minimum charge of $25.00; a maximum fee of $485. The Weekly Entry program allows FTZ users to consolidate all shipments received in a week into a single report -- with a single processing fee for the week.
Zone to Zone Transfers
Weekly Entry Economies
Zone to Zone Transfers
An increasing number of firms are making use of the ability to transfer merchandise from one zone to another. Because the merchandise is transported in-bond, duty may be deferred until the product is removed from the final zone for entry into the U.S. Customs and Border Protection territory.
Other Impacts
Weekly Entry Economies
Zone to Zone Transfers
FTZ users also find that in meeting their FTZ responsibilities to the U.S. government, they may incur additional benefits.
Best Business Practice
U.S. Customs and Border Protection has declared “…use of an FTZ to be a C-TPAT [Customs–Trade Partnership Against Terrorism] Supply Chain Security Best Practice”.
Improved Inventory Controls
Many companies in FTZs find that their inventory control systems run more efficiently, thus increasing their competitiveness.
FTZ Misconceptions
Contrary to popular misconceptions, it is important to know that:
- The program isn’t just for exporters. In fact, most financial savings associated with FTZs relate to importing.
- Foreign and domestic merchandise do not have to be physically segregated and may be commingled or stored together by SKU within an FTZ.
- There is no on-site presence by Customs in an FTZ, although the facility is subject to spot checks that generally occur once per year.
- FTZ users are not audited more than importers at large. A company’s volume, value and nature of product dictates whether Customs performs an audit — not FTZ usage.
- FTZ users do not have to report to Customs on a lot or specific identity basis. Other approved methods including FIFO make FTZ reporting flexible and workable without disrupting operations.
- FTZ users are not required to have a greater reporting accuracy than importers overall. Overages and shortages as a normal part of business operations are acceptable and may be reported periodically based on established FTZ procedures.
Want to know more?
Have a question about our FTZ, or want to see if we can match your specific needs? Send us a message, or give us a call.
Vision Foreign Trade Zone, Inc.
2423 SW 147th Ave. Suite 4008 Miami, FL 33185
Copyright © 2020 Vision Foreign Trade Zone, Inc. - All Rights Reserved.
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