Bonded warehouses and free trade zones

Bonded warehouses and free trade zones (FTZs) allow imported goods to be stored, processed, or re-exported without paying customs duties until the goods enter the domestic market.

Bonded Warehouses

A bonded warehouse is a secure facility licensed by customs where imported goods can be stored for a defined period (typically 1–5 years depending on the country) without duty payment. Duties are only paid when goods are released for domestic consumption.

Free Trade Zones

An FTZ is a designated geographic area where goods may be imported, handled, manufactured, and re-exported under relaxed customs regulations. Notable FTZs include Jebel Ali (Dubai), Shannon (Ireland), Shenzhen (China), and Batam (Indonesia).

Benefits

• Cash flow — Defer duty payments until goods are actually sold domestically.
• Re-export flexibility — If goods are re-exported, no duty is ever paid.
• Value-added activities — Assemble, label, or repackage goods in the zone before deciding the final destination.
• Duty elimination — Goods that are processed in an FTZ and then re-exported avoid both import and export duties.

On Faktorist

Suppliers operating from FTZs can indicate this in their company profile. Buyers benefit from knowing that FTZ-based suppliers can often offer more flexible shipping and pricing arrangements.