Page 14 - World Trade Center - 2018

DIFFERENCE:
DELAWARE UNIQUE PROGRAMS
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The World Trade Center Delaware is one of only four members of the WTC Association in North America that covers an entire state. The state’s relatively small size and business-friendly climate combine to create advantages to doing business in the state. Here are a few of
the Delaware Differences:
Foreign Trade Zones
Geneva. Singapore. Luxembourg. Delaware.
Joining some glamorous company, Delaware became a haven for priceless art a few years back when collectors and art dealers around the world began using Foreign Trade Zones (FTZs) inside the state to trade art without associated tariffs. Stories about warehouses filled with paintings and sculptures were featured on NPR and
in the Wall Street Journal and The New York Times.
But art collecting is only the start of what FTZs have done for Delaware trade.
Patricia Cannon is the grantee administrator for FTZs in the state of Delaware. Any location in the state can apply to become a FTZ through Cannon, and once approved by state and federal agencies, that location becomes a place where commercial merchandise can legally exist as though it had not yet entered the United States.
Cannon uses a flashlight example to explain: If an importer buys 1,000 flashlights and keeps the merchandise in an FTZ, no tariffs are charged until a local retailer orders the flashlights and they are shipped out of the FTZ for sale. But if they are still in the FTZ when a retailer in Africa agrees to purchase 500 of those flashlights, they can be shipped without any U.S. tariffs being applied. The fact that Delaware has no sales or inventory tax is a valuable “stackable benefit,” Cannon said.
FTZs once only existed at ports and other points of entry into the United States. But Delaware became the first state approved by the FTZ Board (comprised of the U.S. Secretary of Commerce and the U.S Secretary of the Treasury) to use the alternative site framework to create FTZs anywhere in the state. The alternative site framework provides FTZ grantees (ports, airports, and EDOs with FTZ administration responsibility) greater flexibility to meet specific requests for zone status outside of traditional locations.
That means any warehouse in the state could become an FTZ, if they apply and are approved.
The resulting savings can be significant. One business Cannon has worked with expects to save $3 million a year by using FTZs in Delaware.
14 | WORLD TRADE CENTER 2018 | WTCDE.COM
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