Foreign trade zone (FTZ)

A government-designated area in which goods can be stored, inspected, or manufactured without being subject to formal customs procedures until they leave the zone. The zones are intended to encourage the companies to locate in the country by allowing them to defer duties, pay lower duties, or avoid certain duties completely. FTZs can be general-purpose zones or sub-zones. A general-purpose zone is generally established near a port of entry, a border crossing or an airport, and usually consists of distribution facility. A sub-zone is physically separated from general-purpose zone but is under the same administrative structure.