All Guides
Comparison Guide

FTZ vs Bonded Warehouse: Which is Right for You?

Both Foreign Trade Zones and bonded warehouses offer duty deferral, but they work differently. Learn which option makes sense for your business.

See Comparison Our FTZ Services

Foreign Trade Zone (FTZ)

A designated area within the US that's considered outside US customs territory for duty purposes. Goods can be stored, manufactured, and processed without paying duties until they enter US commerce.

Learn about our FTZ

Bonded Warehouse

A CBP-approved warehouse where imported goods can be stored for up to 5 years without paying duties. Duties are paid when goods leave the warehouse to enter US commerce.

Learn about bonded warehousing
Comparison

Side-by-Side Comparison

Feature
FTZ
Bonded Warehouse
Duty Payment
Pay when goods enter US commerce (or never if re-exported)
Pay when goods leave warehouse (max 5 years)
Manufacturing
Yes - can manufacture, assemble, process
Limited - mainly storage and repackaging
Inverted Tariff Benefits
Yes - pay lower duty on finished goods vs components
No - pay duty on original goods
Storage Time
Unlimited
Maximum 5 years
Zone-to-Zone Transfer
Yes - transfer between FTZs duty-free
Yes - transfer between bonded warehouses
Weekly Entry
Yes - consolidate entries for efficiency
No - individual entries required
Duty Elimination on Waste
Yes - no duty on manufacturing scrap
No

FTZ is Best For

  • Manufacturing or assembly operations
  • Products with inverted tariffs (components cost more than finished goods)
  • Long-term storage needs (over 5 years)
  • High-volume importers wanting to consolidate entries
  • Companies re-exporting significant volume to other countries

Bonded Warehouse is Best For

  • Simple storage without manufacturing
  • Goods that will definitely enter US commerce
  • Temporary storage while arranging sales
  • Importers not needing inverted tariff benefits
  • Lower-volume operations
FAQ

Common Questions

It depends on your operation. FTZ typically offers more savings for manufacturers (inverted tariff benefits, duty elimination on waste) and high-volume importers (weekly entry). Bonded warehouses can be more cost-effective for simple storage operations.

Yes. Some companies store goods in bonded warehouses temporarily, then move to FTZ for processing. Others use FTZ for manufacturing and bonded for overflow storage. Your strategy depends on your specific needs.

FTZ: unlimited time. Bonded warehouse: maximum 5 years, after which goods must be exported, entered into US commerce, or destroyed.

Both require CBP-approved security measures. FTZs typically have stricter requirements. Insurance requirements are similar for both.

FTZ offers weekly entry, which can speed up clearance for regular shipments. Bonded warehouses require individual entries. However, actual clearance time depends on many factors.

Yes. Our Laredo facility includes both FTZ and bonded warehouse options. We can help you determine which is best for your specific situation.

Not sure which is right for you?

We offer both FTZ and bonded warehouse services in Laredo. Let us help you choose the best option for your business.

Get Expert AdviceExplore FTZ