Foreign Trade Zone
The City of San Diego's Foreign Trade Zone offers a unique opportunity for companies seeking innovative solutions to the many challenges associated with conducting international trade. A Foreign Trade Zone is an area physically located within the United States, but deemed to be outside the U.S. Customs territory.
Advantages for Businesses in a Foreign Trade Zone
- Most foreign-made parts, components and merchandise may enter a zone without payment of U.S. Customs duties, fees and certain taxes.
- If an imported product that has been admitted to a Foreign Trade Zone is subsequently exported, no U.S. Customs duty is due. If, however, the product is imported into the United States, duties, fees and other taxes (if applicable) are due at the time the merchandise leaves the zone and enters the U.S. Customs territory.
- The importer may choose to pay duty at the rate applicable to either the component parts or on the finished product (which is usually lower and pertains only to the value of the foreign content.)
- Foreign Trade Zones provide importers, exporters, manufacturers and distributors with opportunities to reduce U.S. Customs duties and to defer payment until the product leaves the zone.
- A Foreign Trade Zone also offers benefits such as increased cash flow and reduced actual duty paid on imports and products warehoused, manipulated or manufactured for export.
- Part of the Foreign Trade Zone overlaps with a state-designated Enterprise Zone and a Recycling Market Development Zone that offer other incentives and benefits.
Types of Companies in Zones
Large and small companies alike use Foreign Trade Zones; 70 percent of Foreign Trade Zone users are small businesses. These companies defer, reduce or eliminate U.S. Customs duties, fees and certain taxes. Such companies include importers, manufacturers, distributors, assemblers of products, and exporters of imported merchandise and/or products containing imported merchandise. A company that does not buy or receive imported products from foreign or domestic vendors, and does not plan to do so, will not benefit from the use of a Foreign Trade Zone.
Foreign Trade Zone Location
The City of San Diego's Foreign Trade Zone is located in the southern part of the City in the Otay Mesa community near the U.S.-Mexico border. Besides being close to the booming maquiladora industry of Tijuana, Mexico, the zone is located near Brown Field Airport and Tijuana International Airport, and about 20 miles from San Diego International Airport. The Port of San Diego is also close by. More than 1,500 acres of finished, industrial land has been pre-approved for Foreign Trade Zone use. The seven sites within the zone are:
Map of Foreign Trade Zone Sites
- Site 1: 500 acres of City property at Brown Field, Otay Mesa and Heritage roads.
- Site 2: 73 acres at Airway Road and state Route 125.
- Site 3: 60 acres at Gateway Park, at Harvest Road and Custom House Plaza Road.
- Site 4: 70 acres at Britannia Commerce Center, Siempre Viva Road and Britannia Boulevard.
- Site 5: 312 acres at De La Fuente Business Park situated at Airway and La Media roads.
- Site 6: 160 acres at Brown Field Business Park, bounded by Otay Mesa Road, Britannia Boulevard and Airway Road.
- Site 7: 389 acres at the Otay Mesa International Center business park in the southeast portion of Otay Mesa.
San Diego Companies Using the Zone
Several well-known companies have taken advantage of the public warehouse facility operated by the City's Foreign Trade Zone operator, Metro International Trade Services Inc. These companies include Sony, Samsung, Toshiba, Ocean Garden, and Panasonic. Two companies - Toyo de Baja California and Medical Sales Inc. - have activated their own sites for Foreign Trade Zone use.
Contact Information
For more information on the City of San Diego's Foreign Trade Zone, contact the City's Economic Development Division. Other sources of information are the web sites of the National Association of Foreign Trade Zones and the California Housing and Community Development Department.
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