Rio Grande City is home to a 30.0 acre general-purpose Foreign Trade Zone (FTZ) east of the Rio Grande City Custom Port of Entry. The FTZ 95 was established in 1983 for warehousing and distribution of machinery, equipment and liquor. Domestic companies interested in more effectively competing with foreign companies may take advantage of duty-free benefits and other processing procedures by U.S. Customs in FTZs. For more information on Rio Grande City's FTZ please contact the Starr County Industrial Foundation.Location of Foreign Trade Zone
Benefits of Foreign Trade Zones
DUTY EXEMPTION ON RE-EXPORTS: If
merchandise is re-exported after being placed in a FTZ or
shipped to another FTZ and then re-exported then no duty is ever
RELIEF FROM INVERTED TARIFFS: Generally,
if foreign merchandise is brought into a Foreign-Trade Zone or
Subzone and manufactured into a product that carries a lower
duty rate, then the lower rate applies.
FOR EXAMPLE: A Foreign-Trade Zone user imports a motor (which carries a 5.3% duty rate) and uses it in the manufacture of a vacuum cleaner (which has a 1.4% duty rate). When the vacuum cleaner leaves the FTZ and enters the commerce of the U.S., the duty owed on the motor drops from the 5.3% motor rate to the 1.4% vacuum cleaner rate.
DUTY ELIMINATION ON WASTE AND
SCRAP: No duty is charged on most waste and scrap from
production in Foreign-Trade Zones.
NO DUTY ON REJECTED OR
DEFECTIVE PARTS: Merchandise found to be defective or
faulty, may be returned to the country of origin for repair or
simply destroyed. Whichever choice is taken, no duty is paid.
Many companies suffer from the "double duty crunch."
That is, they pay duty on imported merchandise, find it to be
faulty and return it to the country of origin for repair, and
then pay duty again when the merchandise reenters the United
States. If you are a Foreign-Trade Zone user or Subzone, the
"double duty crunch" is never a problem, because your
merchandise never enters the commerce of the United States.
DUTY DEFERRAL: No duty is
ever charged on merchandise while it is in a Foreign Trade Zone,
and there is no limit on the length of time merchandise may be
kept in a Foreign-Trade Zone. By deferring the duty, capital is
freed for more important needs.
NO DUTY ON DOMESTIC CONTENT OR
VALUE ADDED: The "value added" to a product in a
FTZ (including manufacture using domestic parts, cost of labor,
overhead, and profit) is not included in its dutiable value when
the final product leaves the Zone. Final duties are assessed on
foreign content only.
RELIEF FROM LOCAL AD VALOREM
TAXES: Foreign merchandise stored in Foreign-Trade Zones, or
merchandise held in a zone for export, is not subject to any
state or local ad valorem taxes.
NO DUTY ON SALES TO THE U.S. MILITARY OR NASA: No duty is charged on merchandise sold from a Foreign-Trade Zone to the U.S. Military or NASA, returned to the country of origin for repair or simply destroyed. Whichever choice is taken, no duty is paid.