Getting Foreign Trade Zone designation involves working with the FTZ Board, U.S. Customs and Border Protection, and your local zone grantee. The process varies significantly depending on whether you use the Alternative Site Framework or the Traditional Site Framework. Here is what each path looks like.

Step 1: Determine If an FTZ Makes Sense

Before applying, run a cost-benefit analysis on your actual import data. You need to confirm that projected duty savings (deferral, inverted tariffs, MPF reduction, re-export elimination) outweigh the costs of designation, activation, and ongoing compliance. Companies with annual duty spend below $50,000 rarely see a positive return. Those above $100,000 are strong candidates.

Impor's FTZ Evaluation skill can run this analysis from your entry data in minutes, giving you a clear savings projection before you invest in the application process.

Step 2: Contact Your Local Zone Grantee

Every FTZ has a grantee, the entity authorized by the FTZ Board to manage the zone. The grantee is typically a port authority, economic development agency, or similar organization. They manage the zone and can help you understand which designation path is appropriate for your site and operations.

You can find your local zone grantee through the FTZ Board's website, which maintains a directory of all active zones and their grantees.

Step 3: Choose Your Designation Path

Option A: Alternative Site Framework (ASF) - Usage-Driven Site

This is the faster, simpler path for most companies. Requirements:

• Your site must be within the zone's pre-approved ASF service area
• You must be ready to begin FTZ activity
• The grantee submits a Minor Boundary Modification (MBM) request

Information needed for the MBM:

• Site address and acreage
• Company and activity summary
• Documentation of right to use the site (lease, deed)
• Site map
• CBP concurrence
• Local tax impact letters (if applicable)

Timeline: Approximately 30 days. No application fee. No public comment period.

Important: ASF usage-driven sites have a 3-year sunset provision. You must demonstrate actual FTZ activity to maintain the designation.

Option B: Traditional Site Framework (TSF) - Subzone Application

Required when your site is outside the ASF service area or exceeds activation limits:

• Full subzone application to the FTZ Board
• Public comment period
• FTZ Board review and approval

Timeline: 6 to 12 months. Application fee of $4,000 to $6,500 depending on product complexity.

Step 4: Obtain Production Authority (If Manufacturing)

If you plan to manufacture, assemble, or process goods in the zone (any activity that changes the HTS classification at the 6-digit level), you need production authority from the FTZ Board. This is a separate step from site designation.

The process:

• Submit a Production Notification listing all foreign-status components and finished products with HTS codes
• 40-day public comment period
• FTZ Board decision within 120 days
• If time-sensitive, you can request interim production authority (requires CBP concurrence)

Step 5: Activate the Zone

After designation, you must activate the zone with CBP before operations can begin:

• Background investigations of key employees (CBPF 3078)
• Implement an inventory control and recordkeeping system per 19 CFR 146.22
• Establish physical security (controlled access, employee badges, visitor logs)
• Create an English-language procedures manual
• Obtain CBP activation approval

Step 6: Begin Operations and Maintain Compliance

Ongoing requirements include:

• Track all merchandise movements using Zone Lot Numbers and Unique Identifier Numbers
• Submit annual reconciliation reports within 90 days of year-end
• Provide CBP examination access at all times
• Cooperate with FTZ Board monitoring visits (typically annual, half-day to full-day)
• Report production authority scope annually

Total Cost Overview