The cost of participating in the global economy can be high for local businesses.
But with Douglas County’s recent designation as a Foreign Trade Zone, local companies that do business internationally have an opportunity to cut their operating costs by lowering — if not eliminating — the tariffs they pay on imports and exports.
“It’s a way for a firm to save a little bit of money,” said Roger Zalneraitis, Lawrence’s economic development administrator.
An FTZ is a location in the United States legally considered to be outside U.S. Customs Territory. Goods may be imported into and exported from an FTZ without formal customs entry or paying duty charges.
Zalneraitis said the new designation makes local businesses more competitive in the global economy.
“Providing them the opportunity to be part of a FTZ and to sell into other markets at a lower cost helps us out in Douglas County,” he said.
The designation went into effect July 8, and several local businesses have inquired or applied for subzone status, which makes them eligible to receive customs tax relief.
“We’ll lose the disadvantage of taxes and duties, which other countries don’t necessarily have,” said Willem Anemaat, president of DAR Corporation, a Lawrence company that specializes in aeronautical design and wind energy services.
It has clients in more than 60 countries.
“With this trade zone, if we can get around some of these extra taxes, which makes our product more expensive, it’ll just help us,” he said.
DAR Corp. is currently expanding its manufacturing capabilities, but Anemaat thought the cost of importing foreign parts was too high in Douglas County.
He considered moving his company to Salina because of its FTZ status, but he decided to ask Lawrence officials to apply for FTZ status.
The designation will help keep businesses like DAR Corp. in Douglas County and will benefit the local economy.
“If we can get them in an FTZ here because they realize the potential this has for their overseas sales,” Zalneraitis said, “then we can keep them here and help them grow here.”
Zalneraitis has been speaking with local business owners about applying for subzone status, a process that recently became much easier. It used to take 12 to 18 months for an application to be processed, but now it’s expected to take less than 90 days.
He said local business owners are excited about any opportunity to save some money.
“Anytime you tell a company, ‘Hey, we can help save you costs, and it’s not really a bureaucratic hassle,’ they’re going to be interested.”
For more information on how to apply for subzone status in Douglas County, call the Greater Kansas City Foreign Trade Zone Inc. at 816-474-2277.