An expanded Foreign Trade Zone #214 is now an approved reality for eastern North Carolina.
The U.S. Foreign Trade Zone Board has signed off on the application to expand the FTZ and change the zone from a traditional model to the newer, more flexible Alternative Site Framework (ASF)
A Foreign Trade Zone is like a “duty free” zone for businesses. It’s a secure area in or adjacent to a U.S. Port of Entry, authorized by the federal government. Merchandise of every description may be held in the Foreign Trade Zone without being subject to customs duties or other added value taxes.
The ASF is an organizational model that allows for companies to reap the benefits of being in the zone but the boundaries for activation are more flexible than previously structured, and the application process is streamlined and expedited. There are tax benefits for companies utilizing foreign trade zones that include:
- No duties on imported goods that are later re-exported
- Production-specific benefits – with case-by-case approval by the FTZ Board – that can include reduction of duties if a lower tariff rate applies to the finished product leaving the zone than the tariff rates that would have been applied on foreign components
- Elimination of duties on waste, scrap and rejected or defective parts
- Customs efficiencies including direct delivery and weekly entry
"Expansion of southeastern North Carolina’s foreign-trade zone supports our goal to create jobs by helping attract new businesses and encouraging existing companies to expand," said Gov. Pat McCrory in a Tuesday news release. "This announcement will help connect North Carolina to more global trade and help our state attract manufacturing jobs returning to the United States."
The approved application also includes an expansion of the current zone boundaries with three new magnet sites: Radio Island, Craven County Industrial Park, and Wilmington International Airport.
“The magnet sites ... allow companies to take advantage of a faster and more robust logistical system that is run by a third-party operator,” explained Sebastian Montagne of the N.C. Department of Transportation, the FTZ administrator.
Airport officials see this as a boost for ILM, and area companies.
"ILM's designation as a magnet site provides an extra benefit to companies expanding or relocating to our area that cannot afford to wait months for approval of their FTZ site," said Carol LeTellier, the airport's business development director.
“FTZ #214 encompasses 22 eastern North Carolina counties that can greatly benefit from this economic engine as it allows many more companies access to the tax advantages available, and it opens the world of import and export to North Carolina companies,” said former state Rep. Rick Catlin, founder and chairman of the Foreign Trade Promotion Council (FTPC) in a news release Tuesday.
“Now it is available and the next step is to bring the resources together to grow businesses and connect companies to the FTZ. I am very encouraged by this approval and know that New Hanover County can benefit from this program.”
The N.C. Foreign Trade Promotion Council (FTPC) and the N.C. DOT Foreign Trade Department had worked for several years with the U.S. Department of Commerce to grow international business for the eastern reaches of the state, through an expanded and more flexible FTZ.
Counties in the newly-approved FTZ include Pender, New Hanover, Greene, Wayne, Lenoir, Brunswick, Onslow, Carteret, Duplin, Jones, Craven, Pamlico, Beaufort, Pitt, Hyde, Robeson, Columbus, Bladen, Cumberland, Wilson, Edgecombe and Nash.
To learn more about the new FTZ #214 and international business opportunities, the FTPC is hosting a conference at CFCC Union Station Building Oct. 12 to educate interested companies on how the FTZ works and how is can benefit businesses in the region. There will be a FTZ panel discussion, foreign business leaders discussing global trade agreements, and one-on-one sessions with international trade companies, banking and financing professionals, and FTZ consultants. It begins at 9 a.m. and runs all day.
For more information on the FTPC and the upcoming conference, click here