Foreign Trade Zone

Foreign-Trade Zone 171 - Liberty County

A Foreign-Trade Zone (FTZ) is a designated, secure area authorized by the federal government where companies can import, store, manufacture, assemble, or distribute goods under special U.S. Customs and Border Protection procedures. Once activated, an FTZ is treated as being outside of U.S. customs territory for duty purposes, offering significant flexibility and cost-saving opportunities for businesses engaged in international trade.

Foreign-Trade Zones are typically located in or near ports of entry and operate under the oversight of U.S. Customs and Border Protection. They allow both foreign and domestic merchandise to move through the supply chain more efficiently while remaining fully compliant with federal, state, and local regulations.

Within an FTZ, companies may conduct a wide range of activities, including storage, processing, manufacturing, and assembly. Duties and certain federal taxes are deferred until goods enter U.S. commerce, and in many cases, may be reduced or eliminated altogether. Merchandise may also remain in a zone indefinitely, providing added inventory and cash-flow flexibility.

Businesses located in Liberty County that meet federal FTZ guidelines may be eligible to operate within Foreign-Trade Zone 171. FTZ designation can significantly reduce the cost of importing and exporting materials used in manufacturing, distribution, and logistics operations, making it a valuable tool for companies seeking to improve competitiveness and efficiency.

To learn more about applying for Foreign-Trade Zone status or to discuss eligibility, please contact Emilio Levario at (832) 599-3088 or via email at elevario@cleveland.texas.gov.

Key Benefits of Operating in a Foreign-Trade Zone

• Duty Deferral or Reduction: Customs duties and applicable federal excise taxes are paid only when goods enter U.S. commerce, not when they enter the zone.

• Inverted Tariff Advantage: Companies may choose to pay duties based on either the imported components or the finished product, whichever is more favorable.

• Export Advantages: Goods exported directly from the zone are generally exempt from U.S. duties and excise taxes.

• Inventory Tax Savings: Certain inventory stored in an FTZ may be exempt from state and local ad valorem (personal property) taxes.

• Supply Chain Flexibility: Merchandise can be stored, manipulated, or manufactured within the zone without time limits.

• Enhanced Security: FTZs operate under strict CBP security standards, reducing risk and protecting inventory.