Want to purchase up-market liquor, tobacco and perfumes duty-free in South Florida? No problem. Just head to stores which do just this at locations like the Fort Lauderdale-Hollywood International Airport. Want to buy a foreign-flagged yacht in this city nicknamed the Yachting Capital of the World without paying a hefty duty? No way. That is, until now.
Last December, the Marine Industries Association of South Florida (MIASF) received approval from the Foreign Trade Zone (FTZ) Board and the City of Fort Lauderdale FTZ No. 241 to create a 16-site FTZ marine industry subzone. This is the first FTZ subzone in the U.S. dedicated to the recreational boating industry. A subzone such as this is a group of specific-use sites, which in this case, are commercial marinas, marine parts and components businesses, and yacht repair facilities. Previously reserved for ports, holding zones and airport ‘duty-free’ zones, the FTZ designation is big news especially for yacht brokers and sellers. The federal law that has long prevented foreign-flagged yachts to be sold to U.S. citizens in U.S. waters without the payment of a substantial 1.5 percent import duty does not apply in a FTZ. What’s more, new builds that have been brought to the U.S. within the past three years can use the FTZ to file for a refund on previously paid duties.
“A Foreign Trade Zone is a restricted-access area that is considered to be outside the U.S. Customs territory,” explains Kelly Skidmore, public relations specialist for MIASF. “Companies that operate in foreign-trade zones can defer, reduce, or eliminate Customs Duties on foreign products.”
In June, the Lauderdale Marine Center (LMC), was the first to open a FTZ at its 65-acre facility, which includes a boatyard, marina and marine service center. Major refit projects benefit from the FTZ because all parts imported can defer duties when the yacht is in the Zone. Once the refit is complete, the yacht can leave the U.S. without having to pay duties or taxes.
“The FTZ designation gives us an opportunity to attract more of our target customer for reasons other than a shipyard period, as we reconfigure our west marina to accommodate more vessels in the 100-plus foot range,” says Staci Love, the LMC’s marketing manager.
A week later, on June 16, the Bahia Mar Marina, host site of the Fort Lauderdale International Boat Show (FLIBS), opened as For Lauderdale’s second marine FTZ zone, making it among the first marinas in the country with this designation.
“We want more boats to come to the U.S. and stay in the U.S.,” says Megan Lagasse, Bahia Mar’s general manager, who recognizes the great efforts by U.S. Customs & Border Patrol in this process. “After all, economic benefits of the marine industry all start with a boat in the water. That’s the first ripple and its spreads from there. The ability to keep the boat here, work on it here and buy and sell it here helps the marine industry not only in South Florida but the entire U.S.”
The Bahia Mar Marina announcement came just days after MIASF and Informa Exhibitions signed a new 30-year lease extension to keep the FLIBS on the marina’s property through 2050. This now makes FLIBS the only boat show in the country where FTZ transactions can take place. In other words, brokers can legally show foreign flagged vessels to U.S. buyers in U.S. waters without obtaining a boat show bond.
“There are 13 approved sites in the Recreational Marine Foreign Trade Zone No. 241A. Lauderdale Marine Center and Bahia Mar Yachting Center are the first two to be activated. The other sites are in various stages of the activation process,” says MIASF’s Skidmore.
These additional sites include: Pier Sixty-Six Marina, the Hilton Fort Lauderdale Marina, Roscioli Yachting Center, Bradford Marine, Ward’s Marine Electric, Frank & Jimmie’s Propeller, Yacht Management, National Marine Suppliers, D.S. Hull #1, and the Lauderdale Boat Yard.
“We are in the beginning stages of offering a second phase that will allow additional sites to begin the approval and activation process. We anticipate the total number of sites to grow with this next phase,” says Skidmore.
The economic incentives provided by FTZs are on course to help marine industry businesses to expand operations, create jobs, increase revenue and attract future commerce. All of which can boost Fort Lauderdale’s marine industry, which currently contributes $8.8 billion to the city’s economy, even further.