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How to Move to a Tax Haven

tax haven

How to Move to a Tax Haven

 In today’s hyper-competitive global market with rising costs and increasing challenges, saving on taxes can make or break a business and can mean the difference between a secure financial future or just “getting by.”

Increased tax burdens and unfavorable tax laws have left many individuals (perhaps even yourself) seeking what are known as “Tax Havens.”  As the name so blatantly suggests, “tax havens” are those countries or places with extremely low “effective” tax rates that foreign investors can take advantage of.

Seeking the citizenship of any of the tax havens can significantly reduce one’s tax burdens. However, in the process, moving to or partially residing in the country is often required; this might be seen as a downside for many investors who don’t wish to leave their home country. However, this is not always the case as there are many citizenship by investment programs that don’t have a minimum residency requirement. 

Below, we’ll help you explore several tax havens and understand how will they benefit you and your family in the process of tax planning. 

Which Tax Haven Countries can Business Owners Move to?

Business owners are often hit hard by heavily taxed countries, making tax havens an attractive option. If executed correctly, there are a number of legally viable ways, such as offshore accounts and shell companies, that business owners can reduce tax their liabilities. 

For example, investing through a company or trust that has been organized in a tax haven is perfectly legal as long as all compliance and regulatory requirements are met. Yet not all countries are a good fit for business owners.

Popular Tax Havens Often Cited Include: Luxembourg, The Cayman Islands, Isle of Man, Jersey (the island NOT the city), Ireland, Mauritius, Bermuda, Switzerland, Monaco, and the Bahamas 

Although the aforementioned countries tend to get most of the spotlight when it comes to tax havens, they are by no means the only options. In fact, a number of other countries provide measurable tax benefits while also providing other opportunities such as second citizenship and passports that allow investors to enjoy greater freedom of travel, especially for those from Middle Eastern countries where travel restrictions may be an issue.

What are MENA Tax Havens? 

MENA Tax Havens refer to those countries or locations that are open to accommodate the needs of those from Middle East and North African regions. The term MENA covers a vast geography stretching from Morocco to Iran and includes all Maghreb and Mashriq countries. The term is also synonymous or may alternatively be referred to as the “Greater Middle East”.

Popular MENA Tax Havens Include

Saint Kitts & Nevis

Since 2008 there has been a global crackdown on offshore finance and the secrecy that is often associated with tax havens. Political pressure and threats of sanctions from major world powers have forced many countries to open up their books, but not this little dual-island nation.

Investors in Saint Kitts and Nevis can unlock countless business opportunities by being able to open offshore bank accounts and companies while maintaining absolute anonymity and privacy of ownership. Furthermore, Saint Kitts and Nevis’ tax climate imposes 0% tax on global income, inheritance and gifts which makes the island a perfect investment destination for tax planning.

Also, it is worth mentioning that Saint Kitts and Nevis is an island with magnificent nature and climate that draws thousands of tourists each year. Dotted with golden beaches and ringed tropical volcanoes, Saint Kitts and Nevis is an attractive option for citizenship by investment. 

Saint Lucia

A premier destination for those seeking offshore banking and financial products. The diversity of its financial offerings and incentives has made St. Lucia an attractive option for many businesses and wealthy individuals. Options include offshore bank accounts, trusts, corporations and more.

Best of all, the island touts the “absolute” confidentiality of client details and the security of all companies formed in the jurisdiction. As an added benefit, the islands have a long-standing, good reputation and have never been blacklisted or placed under international scrutiny from foreign governments to disclose details of its operations.

In addition to anonymity, the island promotes an easy incorporation process, low yearly fees, flexible share structures, no minimum share capital requirement, ZERO or low tax (1% if elected), absence of tax treaties, English Common Law System, and more.

Antigua & Barbuda

The Caribbean is known for its lucrative tax havens, and Antigua is no exception. Antigua, the largest of the Leeward Islands and its neighboring island Barbuda are often favored among businesses looking to legally reduce tax liabilities. 

Antigua is a vibrant tourist destination, celebrated for its immaculate beaches and tropical weather. What many individuals may not realize, however, is that Antigua has developed a strong reputation for being a favorable tax haven. Local services include international business incorporation, the formation of trusts, offshore banking and more. Regulated by the Antigua Financial Services (AFSR), the island boasts a very favorable tax regime with a fifty-year local tax exemption on capital gains tax, estate tax, inheritance tax, and local income tax for revenue earned outside of Antigua.

Grenada

Over 2 million years ago the little island of Grenada was actually an underwater volcano. Today, the nation, comprised of around 340+ square kilometers and inhabited by an estimated 110,000 people, is known as the “island of spice”, with exports ranging from nutmeg and mace to ginger, cloves, and cinnamon.

Although tourism is the leading industry for Grenada, the nation is also known for being a favored tax haven among savvy business owner. Grenada is favored for its corporate privacy and Citizenship by Investment Program, providing numerous tax benefits. Furthermore, the country offers no withholding tax, no transfer tax, no tax on capital gains, no inheritance or estate tax, and a 20 years’ tax exemption for offshore companies among other benefits.

Other Prospective MENA Tax Havens

Other prospective tax havens worth mentioning include Malta (although it isn’t straightforward) , Dominica, Cyprus, Portugal, and Greece.

Personal Tax Benefit of Making the Move 

The appeal of making the move to a tax haven isn’t only due to corporate benefits. Individuals invest in a tax haven in order to reduce personal tax liability on interest, personal income, inheritance, capital gains and more. Those wealthy enough stand to save millions of dollars by leveraging these legal loopholes and incentives.

Corporate Tax Considerations

Although the primary focus of most corporations is to save on taxes by reducing tax liability, there are a number of other considerations that must be taken into account. For example, what is the process like? Does your corporation qualify? What types of fees are involved? Is residency required? What will the ongoing costs of maintaining your corporation’s status in the haven look like and what will this cost you? Are there any regulatory, political or socioeconomic dangers or risks in the region? 

These are just a few points to consider before taking the plunge.

How Will Making the Move Affect US Citizenship?

Generally speaking, US citizens and permanent residents are taxed by the IRS regardless of where they are physically residing. While the Foreign Earned Income Exclusion does offer a bit of relief, anyone earning over $105,900 in active income per year won’t be able to avoid taxation. 

Moving to another country will not impact US Citizenship. However, those seeking to pay zero or close to zero taxes may find it useful to obtain second citizenship in any tax haven of their choice while also renouncing their US citizenship.

Bear in mind that the USA is the only country that enforces taxation based solely on the citizenship of the individual in question.

Closing Thoughts on Moving to a Tax Haven

There are many misconceptions regarding what it means to move to a tax haven, however, with the help of professional services that deal with these transitions you can largely avoid all of the potential pitfalls while reaping the many rewards.

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Rasha Seikaly, an IMC member, is Bluemina’s Head of Marketing. Bluemina provides families, individuals, and investors with the best and most expedited Citizenship and Residency by investment programs

foreign trade zones

FOREIGN TRADE ZONES, PORTS AND ECONOMIC DEVELOPMENT FORCES CREATE AMERICAN SUCCESS STORIES

The U.S. Foreign Trade Zones Board’s Annual Report to Congress is bullish on FTZs, finding that after several years of decline in zone activity largely related to a downturn in the petroleum sector, strong increases in all major categories were logged in 2017, the last year for which data are available.

Foreign trade zones provide economic incentives to companies importing or exporting international goods. Duty-free treatment is accorded to items that are re-exported, and duty payment is deferred on items sold in the U.S. market, thus offsetting customs advantages available to overseas producers who compete with producers on American soil.

Businesses can use FTZ space a variety of ways, including warehousing and distribution of non-ferrous metals for sale on the London Metal Exchange, warehousing spirits and alcohol and storing vehicles before they are sold in the domestic marketplace.

The value of merchandise received at America’s FTZs increased by 9.6 percent in 2017, to $669.2 billion, according to the report that was presented to Congress this past December. Merchandise received at warehouse/distribution operations increased by 15.5 percent, to $259.1 billion, while that received at production operations increased by 6.2 percent, to $410.1 billion.

Foreign-status inputs to FTZs increased by 11.2 percent, to $250.6 billion, and the value of FTZ imports accounted for 10.6 percent of all goods imported into the U.S. in 2017. The majority of merchandise admitted to FTZs (63 percent) is of domestic origin. The value of exports from America’s FTZs increased by 15.1 percent in 2017, to $87.1 billion, which represents 5.6 percent of the value of all goods exported from the U.S. Exports from FTZ production facilities accounted for two-thirds of all exports from FTZs. Employment at America’s 191 active FTZs increased by approximately 7 percent in 2017, to a new record of 450,000 workers at 3,200 firms that used FTZs during the year.

“The FTZ Board’s latest report confirms that the program continues to be a vital component of America’s trade policy,” says Erik O. Autor, president of the National Association of Foreign-Trade Zones (NAFTZ), which boasts 650+ members. “The competitive advantage for companies operating in an FTZ has enabled them to boost exports and employment, continuing their strong recovery from the recession.”

The Trade Partnership, a Washington, D.C.-based trade research firm, in February provided case studies on the success of FTZs as part of an NAFTZ-commissioned report. “This study measures, both quantitatively and qualitatively, the economic effects of FTZs on the communities in which the zones operate, which we refer to as Zone Economic Communities (ZECs),” states The Trade Partnership introduction to the research, which examined the economic impacts of FTZs in community employment, wages and value added. 

The study concluded the economic impacts of the U.S. FTZ program on communities in which FTZs are located are positive,” The Trade Partnership President Laura M. Baughman said during NAFTZ’s annual Legislative Summit in Washington on Feb. 12. “Many companies have the option to operate inside or outside the United States,” she noted. “They will make that decision based in part on the relative costs of doing business in the United States or abroad. To the extent the Foreign-Trade Zones program can provide positive financial reasons for a U.S. location, it should merit the support of U.S. policymakers.”

“We are very pleased that The Trade Partnership’s analysis has concluded that the U.S. Foreign-Trade Zones program has demonstrable positive economic impacts on the communities in which FTZs are located,” says NAFTZ Board of Directors Chairwoman Eva Tomlinson, who is also director of FTZ Solutions for UPS Trade Management Services Inc. “These real community impacts are in addition to the value that U.S. firms realize from using the FTZ program.” 

The survey included some individual success stories that follow:

FTZ-38 

(Spartanburg, South Carolina; Inland Port Greer; Port of Charleston) 

BMW broke ground on its first American automobile factory in 1992 in Greer, South Carolina, and the first cars rolled off the line in 1994. Before the German automaker’s arrival, Spartanburg was a ghost town of former textile plants and roughly 60,000 lost manufacturing jobs. BMW’s investment in South Carolina changed all that. Today, BMW employs more than 10,000 workers and produces around 400,000 vehicles annually, more than 70 percent for export to 140 global markets (with China the largest foreign destination, followed by Germany). Inputs imported by BMW duty-free under the FTZ program supplement inputs from 235 U.S. suppliers, 40 of whom are in South Carolina.

“As a consequence of this investment, BMW directly and indirectly adds $6.3 billion annually to South Carolina’s economy and leads to the employment of 36,285 people there,” says the German automaker. “The overall footprint in the U.S. is even larger, with value added by BMW of $15.77 billion and employment of 120,855. In each case, this includes both the direct contribution of BMW and the contribution via purchases of BMW and its employees that would not exist if BMW were not established in the United States.”

Earlier this year, BMW Manufacturing, citing Commerce Department data, said it led the U.S. in automotive exports by value for the fifth consecutive year. More than $8.4 billion in cars and SUVs were assembled in Spartanburg before passing through the Port of Charleston in 2018.

FTZ-154

(Baton Rouge, Louisiana; Greater Baton Rouge Port; Port of South Louisiana)

ExxonMobil is a leading example of a company making use of FTZs to import crude petroleum and process it into downstream products, mainly for domestic use in the U.S. but also for export. The oil company has three FTZ subzones in operation, two in Texas (Baytown and Beaumont) and one in Louisiana, where within FTZ-154, ExxonMobil operates a main refinery complex, a petrochemical plant, a tank farm storage facility and a plastics plant in East Baton Rouge Parish, a lubricants plant and a tank farm in West Baton Rouge Parish and the Sorrento Salt Dome in Ascension Parish. The company employs more than 6,600 employees and contractors in the Baton Rouge area, with payroll totaling $491 million.

Despite the exemptions from state and local ad valorem taxes made possible by the FTZ, ExxonMobil’s activities in the Baton Rouge generate millions in annual state and local tax revenue, from property taxes ($33.2 million in East Baton Rouge alone in 2015), to direct sales taxes ($26.3 million in East Baton Rouge), to other state and local taxes (more than $100 million, after credits and rebates). According to a 2017 study, one out of every eight jobs in the Baton Rouge area can be traced back to ExxonMobil. 

FTZ-26

(Newnan, Georgia; Georgia Ports Authority; Port of Savannah)

Yamaha Motor Manufacturing Corp. of America (YMMC), which has corporate offices in Cypress, California, and Kennesaw and Marietta, Georgia, decided in 2011 to take advantage of more efficient production that would result from a centralized location, including one that benefits from the efficiencies offered by the FTZprogram. Thus began the transfer of nearly all YMMC mid- and large-engine ATV production from overseas facilities to Newnan, Georgia. Yamaha directly employs about 3,400 workers in the U.S., but more than 2,000 of them are in Georgia alone, with approximately 1,600 within FTZ-26.

Newnan’s factories spend over $170 million annually at more than 100 U.S. parts suppliers, 30 percent of which are located in Georgia. By 2018, Yamaha had invested more than $354 million in its Newnan facility, with that spending rippling through the local community and beyond. Meanwhile, savings YMMC reaps within FTZ-26 have been fed back into the local community, including Yamaha-sponsored environmental projects for schools, youth character-building initiatives, scholarships for high school students and support for local teachers. 

FTZ-86

(Tacoma, Washington; Northwest Seaport Alliance; Port of Tacoma)

Helly Hansen imports from Asia specialty water-resistant cold weather apparel and footwear for professionals working in extreme environments. The Helly Hansen brand had a strong presence in Canada when its Norwegian owners looked to expand beyond the Great White North to all of North America. Savings afforded by the U.S. Foreign-Trade Zone program tipped the scales in favor of making Auburn, Washington, which is within the Port of Seattle’s FTZ-5, the location for Helly Hansen’s U.S. warehouse in 2011.

Four years later, growth spurred the need to open a bigger warehouse and a location was found within the Port of Tacoma’s FTZ-86, where all operations consolidated. About 55 percent of Helly Hansen’s imports into Tacoma are re-exported to Canada, and the company pays no duties on those products. It does pay U.S. import duties on products destined for the U.S. market, when they exit the FTZ for U.S. sale, but while products wait at the warehouse, the company saves money from deferred duty (the value of tighter cash flow and reduced interest costs) and reduced processing fees. The Canadian Tire Corp. purchased Helly Hansen in 2018, and the company now employs 103 people in Tacoma, up from about 50 in Auburn in 2011. Indirectly, the company supports jobs at the port processing 400-500 containers a year, containers that would otherwise go directly to Canada. 

FTZ-18 and FTZ-45

(San Jose, California; Port of Oakland; Portland, Oregon; Port of Portland)

Fremont, California-based Lam Research Corp., a global supplier of innovative wafer fabrication equipment and services to semiconductor manufacturers around the world, creates, assembles, repairs and distributes equipment within San Jose’s FTZ-18 (since 2010) and Portland’s FTZ-45 (since 2016). Around 6,000 employees work in zone-based activities. Components and materials sourced from abroad are admitted free of duty under the FTZ program; those duties would otherwise range from zero to 10.7 percent. Lam estimates that program benefit alone saves the company a significant amount of its import costs. But the FTZ has also helped Lam manage fluctuations in supply chain and international trade. The company has poured zone savings into research and development throughout the U.S.

FTZ-25

(Oakland Park, Florida; Port Everglades)

ProdecoTech, which makes electric bicycles that retail for $1,000 to $5,000 each, was founded in 2008. It would not now employ about 100 people in Oakland Park, Florida, were it not for the FTZ program. ProdecoTech bikes used to be finished abroad, but that changed in 2015, when the company began taking components imported from China, Japan, Taiwan, Korea, Vietnam and elsewhere in the U.S. to assemble the rides in Oakland Park.

Thank the benefits from being within FTZ-25, which allowed ProdecoTech to avoid paying import duties that can range up to 10 percent. Keeping final assembly stateside as opposed to overseas is now saving the company about 4 percent per bike. And that has allowed ProdecoTech to sell goods 30 percent below what its competition charges. Because American workers are doing the assembly, ProdecoTech has a tighter rein on quality control. 

FTZ-272

(Bethlehem, Pennsylvania; Port of Philadelphia)

Piramal Critical Care Inc. was a U.S. pharmaceutical manufacturer that could no longer compete paying tariffs on imported inputs while its foreign competitors shipped finished products here duty free. That put a target on the jobs of 95 employees in Bethlehem, Pennsylvania, where they manufactured and distributed inhalation anesthetics from chemicals and other materials sourced from abroad, primarily India.

After toying with eliminating 70 high-skilled positions and moving production abroad, Piramal launched a Hail Mary by applying for FTZ benefits in 2012. The application was approved, and it has saved Piramal hundreds of thousands of dollars annually in duties. Not only was the company able to stay in Bethlehem, it went on to add even more jobs, modernize its facility and increase capacity three-fold. Piramal today employs about 120 workers and exports to more than 100 countries. 

FTZ-176

(Rockford, Illinois; Port of Rockford)

UniCarriers Americas, which was previously known as Nissan Forklift Corp., sought approval to manufacture rider-type forklift trucks in Rockford, Illinois’ FTZ-176 in 2005. Imported components, which accounted for about 48 percent of the finished forklift truck’s value, were charged duties as high as 9 percent. After contending FTZ benefits would improve UniCarriers’ competitiveness in export markets, the company won approval in 2006. That has gone on to save UniCarriers about $2 million a year, according to the company, which adds employee time spent on handling and filing documents daily for U.S. Customs and Border Protection was eliminated. That’s a win-win when you consider a booming U.S. economy and e-commerce have created strong demand for forklift trucks.

Fortunately, UniCarriers has redirected some duty savings into adding space and employees as well as funding training for a workforce operating ever more sophisticated new equipment. Whereas many manufacturers are replacing workers with robots, UniCarriers is retraining and redeploying employees to work and train alongside automation, according to CEO and President James J. Radous III. He cites figures that show UniCarriers has increased its automation capabilities by 50 percent while doubling its number of employees from about 300 to 600 over the past five years. 

The preceding were the success stories cited in The Trade Partnership report, but there are also other foreign trade zone success stories out there that include the following:

FTZ-84

(Houston, Texas; Port Houston)

FTZ-84 was on a roll in 2017, adding 13 companies, which is no surprise when you consider the Houston region’s rapid growth. As a result, more large importers and exporters are taking the advantage of the financial benefits of using FTZ-84.

One company reaping such benefits is Houston-based Dixie Cullen Interests, which specializes in steel, machinery and other industrial materials. “We are excited about the opportunity that it has opened up for us,” says Dixie Cullen’s President Catherine James. “And we know that Port Houston is where we need to be.” That’s especially true when you consider Port Houston, which owns or operates eight terminals, has committed to invest $1 billion-plus during the next several years in expansion and improvement projects. About two-thirds of all containers in the U.S. Gulf move through Houston, whose port is one of the world’s largest.

FTZ-87

(Lake Charles, Louisiana; Southwest Louisiana Economic Development Alliance; Port of Lake Charles)

The five parish area bordered by Southeast Texas and the Gulf of Mexico is anchored by Sulphur and Lake Charles, where companies from the U.S., Europe, Africa and Asia have staked claims in industrial growth expansion totaling $97 billion.

An extensive rail network makes its way through Southwest Louisiana with Union Pacific and Kansas City Southern servicing the area. Interstates 10 and 210 service a combined 100,000 motorists a day and complete routes between America’s Pacific and Atlantic Coast. And Lake Charles Regional Airport is served by United Airlines, whose hub is in Houston, and American Airlines with its Dallas/Fort Worth hub. But the region has more going for it than simply location, according to George Swift, CEO and president of the Southwest Louisiana Economic Development Alliance. “Our people and companies are making history,” he says. “Each day that passes, companies from across the globe are calling to learn about development and expansion possibilities while others call about the tens of thousands of temporary and permanent jobs that are going to be generated by industrial expansion.”

FTZ-74

(Baltimore, Maryland; Baltimore Development Corp.; Port of Baltimore)

FTZ-74 is one of the most active and largest zones in the United States, which is fitting considering the Port of Baltimore is among America’s 10 busiest ports. With merchandise such as cars, paper and steel, total FTZ-74 international revenue rose from $44 million in 2016 to more than $396 million in 2017, a whopping 800 percent increase! The total value of shipments through Baltimore’s FTZ was more than $19.9 billion in ’17. That only figures to rise as Maryland recently approved a contract to complete the fill-in of a wet basin at the Helen Delich Bentley Port of Baltimore’s Fairfield Marine Terminal.

That project will create more land to help handle the port’s surging auto and roll on/roll off (farm and construction machinery) cargo. Among those as pleased as a Baltimore Bang cocktail over this development is Maryland Governor Larry Hogan. “The Port of Baltimore is the number one auto port in the nation and continues to break cargo records every month,” Hogan says. “Our administration is committed to furthering this growth and strongly supports our great port and its thousands of hardworking men and women handling the millions of tons of cargo coming in throughout the year.”

FTZ-196

(Fort Worth, Texas; AllianceTexas; Dallas/Fort Worth International Airport)

Known as the Alliance Foreign-Trade Zone, FTZ-196 in North Fort Worth sees more action than any other general purpose FTZ in the country. AllianceTexas is a 17,000-acre, master-planned community anchored by the world’s first industrial airport. Also within its boundaries are the Alliance Global Logistics Hub, Circle T Ranch, Heritage, Alliance Town Center, Saratoga and Monterra Village projects. A total of 265 companies that have created more than 30,000 jobs. Among them are Cinram, Hyundai, LEGO, Motorola, GENCO ATC, Callaway Golf and Alliance Operating Services.

Since its inception, AllianceTexas has generated a $40.65 billion economic impact for the North Texas region. Steve Boecking, vice president of Hillwood Properties, the Perot company that developed the Alliance brand, says of the $4 billion in annual FTZ-196 imports: “Regional efforts to strengthen international relationships and to build new global trade partnerships have also resulted in an increased volume of foreign goods being shipped through North Texas.” 

THE POWER OF POSITIVITY

The National Association of Foreign Trade Zones study found the following positive economic measures when examining each of 251 Zone Economic Communities (ZECs) to determine the impact of foreign trade zones:

-Employment, wages and value-added increased in the broader zone community following the establishment of an FTZ. Those gains are the greatest in the early years for employment and wages, and throughout the period for value added. This increased economic activity is also evident once a decision is made to form an FTZ.

-The establishment of an FTZ caused a positive increase in employment growth in the surrounding ZEC (up 0.2 percentage points), wage growth (up 0.4 percentage points), and value-added growth (up 0.3 percentage points), typically eight years and later, after establishment of the FTZ. The impacts begin sooner, in years six and later, for wages and value added in small- and medium sized ZECs.

-Company access to FTZ benefits had a substantial ripple effects through the companies’ supply chains, which are typically located nearby. 

Downloaded the complete report at www.naftz.org.

Dubai Customs Reports Free Zone Trade Growth

The latest reports released by Dubai Customs reveals an impressive 23 percent growth in free zone trade for 2018, reaching a total of AED532 billion. Total non-oil trade for 2018 was reported at AED1.3 trillion, confirming the strong position Dubai is steadily maintaining as an international and regional trade hub leader.

“The current growth of Dubai’s non-oil foreign trade is an indication that we are on the right path of revenue diversification in alignment with the values and standards outlined in the 50-Year Charter. The Dubai Silk Road Strategy supports decades of successful investment in developing the emirate’s infrastructure,” said His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council.

“In line with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, we are committed to develop our government services so that we can become a world-class model for future governments based on knowledge, innovation and advanced AI applications. We are currently developing a virtual commercial zone, the first of its kind in the region, which will allow investors to open bank accounts and grant e-residencies according to the highest standards of international laws and regulations,” he added.

Additionally, airborne trade saw an increase of 3.2 percent, sea trade was reported with a 3.4 percent increase, and land trade was reported at AED205 billion. Advanced communication technologies, such as phones were reported as the top commodity in Dubai, and China and India remained the region’s largest trading partners.

Dubai’s non-oil foreign trade is flexible and agile enough to overcome different global economic crunches. Despite a number of challenges that world trade has been through in the last decade, Dubai’s trade grew 72% from 2009 and 2018, and the volume of goods in this period grew 44%. This again reflects Dubai’s ability to attract global trade and investments and to keep up with changes, especially the rise of Asia and China as a global export hub. Dubai is a very important link in this global activity. Our international network of ports and free zones in different countries coupled with Dubai’s leading airline network have helped the emirate in its journey towards more success and progress,” concluded Sultan bin Sulayem, DP World Group Chairman & CEO and Chairman of Ports, Customs and Free Zone Corporation.

Arizona Foreign Trade Zone to Expand

Nogales, AZ – The Nogales Santa Cruz County Economic Development Foundation (EDF), the grantee of Foreign Trade Zone 60, has received authorization to reorganize the Nogales Foreign Trade Zone (FTZ) 60 to include all of Arizona’s Santa Cruz County.

The move means that U.S. firms and distribution operations can apply for activation anywhere in the 1,238 square miles of Santa Cruz County.

Companies operating in the Nogales Foreign Trade Zone 60 “enjoy expedited international trade benefits, including tariff advantages, increased flexibility and reduced paperwork. These benefits increase global competitiveness and help companies create jobs in the United States,” the EDF said.

Robert C. Martin, an attorney and board member of the EDF responsible for the reorganization noted, “We are excited at the economic opportunities offered to all of Santa Cruz County with the conversion to the Alternative Site Format (ASF) for Foreign Trade Zone 60.

This allows EDF to petition for the activation of an unlimited number of sites up to a standard cumulative 2,000-acre activation limit.

The benefits of operating within a FTZ “will enable job creation in Santa Cruz County and increase the competitiveness of the growing international trade industry in our region. The expanded FTZ will further the growth of our emerging ‘logistics cluster’ and enable us to capitalize on the increase of the ‘near-shoring’ maquila trends in Mexico,” said Martin.

The conversion to the ASF Format will allow potential operators increased speed and flexibility and cost-savings in applying for activation of an FTZ operation.”

Two companies currently operate within the Nogales Foreign Trade Zone 60, and a third business has been negotiating with the EDF to operate soon.

The recent 75th Annual Trade Zones Board report to Congress shows the two companies have 26-30 employees in the original trade zone, with exports of $100 million-$250 million in 2013.

11/13/2014

Foreign Trade Zones Seeing Upsurge in Business

Washington, DC – The value of exports from America’s Foreign Trade Zones (FTZs) increased by 13.7 percent in 2013, to a record-high $79.5 billion in merchandise shipped to overseas markets, according to the US Foreign Trade Zones Board.

According to the group’s Annual Report to Congress, at $835.8 billion, the 2013 value of received merchandise into FTZs also reached a new high, surpassing the previous year’s record of $732.2 billion – a 14.1 percent increase.

Nearly two-thirds of the merchandise received by FTZs in 2013 was domestically sourced, with the value of domestic status inputs growing to $545.5 billion. The remaining $290.3 billion in received merchandise consisted of foreign status inputs, it said.

The composition of foreign status inputs received by FTZs has also shifted significantly, according to the report. In 2013, a 16 percent decline in foreign status petroleum inputs was offset by increases in other product categories, such as vehicles, electrical machinery, and consumer products.

According to the report, the $79.5 billion export figure is based solely on material inputs, and does not include the value added to those inputs by US-based manufacturers operating in FTZs.

“CAPTURING THE FULL VALUE OF EXPORTS”

The National Association of Foreign Trade Zones (NAFTZ) is currently working with the US Census Bureau and the US Foreign Trade Zones Board “to more accurately capture the full value of exports from FTZs, including the value added to foreign and domestic status inputs by FTZ user companies,” the report said.

“Record FTZ exports, merchandise received, and employment offer compelling evidence that the FTZ program is expanding and adapting to meet the needs of American-based companies competing in a global economy,” said NAFTZ President Daniel Griswold.

The zone program, he said, “has become vital to US economic policy goals of boosting exports, attracting foreign investment, and creating well-paying and sustainable private-sector jobs on American soil.”

“Since 2009, exports from foreign-trade zones have almost tripled, from $28 billion to nearly $80 billion,” Griswold added. “The FTZ program shows that when US-based companies are allowed to access global inputs at competitive prices, they can become export powerhouses.”

There were 177 active FTZs during 2013, with a total of 289 active manufacturing/production operations. A record high of 390,000 persons were employed at 3,050 firms that used FTZs during the year – an increase of 20,000 employees over 2012.

The FTZ Board processed 65 applications for new or expanded production authority in 2013, and reorganized 23 zones under the alternative site framework (ASF).

The first Foreign Trade Zone was opened on Staten Island by  the Port of New York-New Jersey in February 1937.

08/28/2014