As printed in the Atlanta Business Chronicle
In today’s economy, Georgia businesses are looking for methods to improve their bottom line. Some options are not ideal: layoffs, cutting services, even closing shop. For certain employers—those that import products or raw materials from overseas—the federal government has a proven program that can help companies reduce costs without having any impact on customers or employees. What’s more: participating in the Georgia program has just become far easier.
The Foreign Trade-Zone (FTZ) program allows qualified businesses to defer, decrease, or eliminate duties on materials imported from overseas that are used in products assembled in Georgia. Participation in the program also allows employers to file weekly customs entries rather than one entry for every shipment – decreasing administrative costs, and in many cases speeding up the delivery of goods.
For decades, many large companies have participated in this program. Smaller employers, though, either have not known about the program or have been daunted by its lengthy application process. To counter this underutilization, the federal government recently streamlined the program’s application process for companies in certain industries. Approval of an FTZ application that might have taken 12 months now can be approved in thirty days.
There is one important caveat: Applicants need to demonstrate that participation in the program will create or protect jobs here in Georgia. The program was established with the sole purpose of keeping jobs here or creating new opportunities for employment in the sectors that long have served as the foundation of our economy.
Here’s how it works. Let’s take a Georgia-based distributor looking to tighten its belt without cutting jobs. Without the benefits associated with FTZ status, the distributor would be compelled to file a customs entry for every imported shipment, and would pay duty on all shipments soon after they arrived in port. These import obligations come with their own administrative costs and processing times. And, the “pay up front” conditions have a direct and negative impact on cash flow.
With help from the Georgia Foreign Trade Zone (GFTZ), the federal grantee for FTZ applications in much of central and northern Georgia, companies have a cost effective method for solving each of these issues. Inclusion in the GFTZ would enable the distributor to file only one customs entry per week when the inventory exists in an FTZ, decreasing administrative overhead and speeding up the distribution process. Further, the distributor could defer duty payments on all imported products, until the product leaves the FTZ, freeing up cash flow. Finally, a distributor located in an FTZ will not have to pay any tariffs on those products that are re-exported outside the U.S. (to Canada for example). The combined savings can be substantial.
Ultimately, the FTZ program is founded upon the intuitive but often overlooked truth that only successful, profitable companies create jobs. GFTZ’s goal is to bring jobs to Georgia, and we do that by using the tools associated with the FTZ program to help Georgia’s companies succeed.
Julie Brown is the President and CEO of the Georgia Foreign Trade Zone.
Yamaha’s Newnan Foreign-Trade Zone Recognized Nationally for Export Innovation
ATLANTA – The Georgia Foreign Trade Zone (GFTZ) announced Wednesday that the Yamaha Motor Manufacturing Corporation (YMMC) of Newnan was awarded the 2010 Innovation in Export Award from the National Association of Foreign Trade Zones (NAFTZ),
YMMC “demonstrated exceptional value-added in their export business through innovative product design, management systems, logistics and innovative technology,” the NAFTZ said in its announcement during its 38th Annual Seminar/Conference and Exposition held last week in Miami. YMMC, a subsidiary of Yamaha Motor Corp., U.S.A., exported $300 million in manufactured goods in 2008 to markets in more than 50 countries.
Yamaha’s Newnan facility is located approximately 30 miles south of Atlanta, in GFTZ subzone 26D. The 252-acre site employs more than 1,000 local workers who produce golf cars, all terrain vehicles and personal watercraft. Over the past two decades, FTZ cost savings and logistical advantages have enabled Yamaha to remain competitive and expand production and staff.
“We are extremely grateful for the support we have received from the GFTZ as well as the Newnan and Georgia business communities,” said Phil Trickey, YMMC’s Vice President of Finance and Administration. “The benefits we derive from our membership in the Foreign Trade Zone program are an important part of Yamaha’s success in Georgia.”
“Yamaha’s facility is not only one of the pillars of the local economy of Coweta County, but also of the State of Georgia. We are very proud to have them as a respected corporate citizen, valued employer and FTZ partner,” said GFTZ President and CEO Julie Brown.
Macon Telegraph: Bibb, Monroe, Twiggs get foreign-trade zone status
Bibb and two other midstate counties have gained “foreign-trade zone” status, a move that officials say could help attract new industry and help some existing ones expand. Please click here to continue reading.
Global Atlanta: More Foreign-Trade Zones to Sprout in Georgia
Five counties in Georgia have been cleared to establish foreign-trade zones, sites with special U.S. customs regulations that help importers reduce costs and boost competitiveness. Please click here to continue reading.
AJC: Trade Zone Status Can Lift Bottom Line
By Julie Brown
For The Atlanta Journal-Constitution
The Georgia Foreign Trade Zone (GFTZ) recently received approval from the federal government to expand to several sites in middle Georgia. Combined with our already strong presence in metro Atlanta, this green light puts us in a position to provide even more Georgia companies with unique opportunities to decrease the cost of importing and exporting finished goods and raw materials.
Foreign Trade Zones have been around in Georgia for decades and have involved hundreds of companies and impacted thousands of jobs. Yet, we believe that the GFTZ remains an underutilized opportunity – especially in light of today’s troubled economy and unemployment rates in excess of ten percent. It is vital more than ever for Georgia companies now to take advantage of every opportunity to improve their bottom lines.
And that’s what we’re all about. The cost-saving opportunities facilitated by the Foreign-Trade Zone program are easy to use and extremely meaningful -- yet many business leaders do not know enough about the program to understand fully how they could benefit from participating in it. In order to address that issue, here are answers to the two most important questions about the Foreign-Trade Zone opportunity: What is it? And can it help my company?
A Foreign-Trade Zone is a site—typically an individual manufacturing or distribution facility—where the federal government allows foreign goods and materials to be admitted without being subject to formal customs entry procedures or the payment of customs duties. These sites are considered outside of the customs territory of the United States. And while there are numerous benefits from that allowance, there are two primary advantages stemming from having Foreign-Trade Zone status.
First, Foreign-Trade Zones can help you lower your businesses’ tax bite. Businesses don’t pay tariffs until goods leave Foreign-Trade Zones. Some products never incur duty fees – including goods sold outside the US. The second benefit extends virtually to any warehouse or distribution facility that fills out Customs Entry reports. Facilities with Foreign-Trade Zone status are only required to submit one comprehensive Customs Entry report per week, thus decreasing expensive administrative overhead.
The process for applying for inclusion in this program is straight-forward and generally takes between six and nine months. Costs are minimal; GFTZ is a non-profit organization.
There is a catch, and you should know it up front. The Foreign-Trade Zone program is not a glorified tax loophole. The goal of the United States Foreign-Trade Zone program is to stimulate economic growth and development in the United States. The program aims to encourage companies to maintain and expand their operations in the United States. So, in order to qualify for Foreign-Trade Zone status, a company must show how this opportunity will benefit the local economy.
If your company wants to save money on tariffs and reduce administrative costs—and if you’re interested in growing in Georgia—the GFTZ is a terrific opportunity for you to explore. And now, in more communities than ever before, we at the Georgia Foreign Trade Zone are able to help that happen.
Julie Brown is the President and CEO of the Georgia Foreign Trade Zones. For more information: www.georgiaftz.com.
