Could Your Business Benefit from a Foreign Trade Zone?
McHenry County companies that import goods have access to a federal program built to lower duty costs and free up working capital. Foreign Trade Zone (FTZ) 176 covers McHenry County, and businesses here can use it whether they operate their own warehouse or rely on a third-party logistics provider
What is a Foreign Trade Zone?
A Foreign Trade Zone is a designated location within the United States that operates under special U.S. Customs procedures. For duty purposes, merchandise sitting in a zone is treated as though it has not yet entered U.S. commerce. Companies can bring imported goods into an FTZ, store inventory, assemble products, or conduct manufacturing activities before deciding whether those goods enter the U.S. market or ship to a customer abroad.
Which zone covers McHenry County?
FTZ 176 is administered by the Greater Rockford Airport Authority and serves an 11-county area of Northern Illinois, including McHenry County. Portions of McHenry County also fall within the service area of FTZ 22, administered by the Illinois International Port District. If you are not certain which zone applies to your facility, MCEDC can help you make that determination.
What’s in it for my business?
Companies that import products, components, raw materials, or equipment may be able to:
- Defer customs duties until goods leave the zone and enter U.S. commerce
- Reduce duty costs in certain manufacturing scenarios
- Eliminate duties on products that are re-exported rather than sold domestically
- Improve cash flow and inventory management
- Avoid duties on scrap, waste and defective material that never enters commerce
- Enhance supply chain flexibility and efficiency
- File one weekly customs entry instead of one per shipment, which reduces merchandise processing fees and brokerage costs
For companies involved in international trade, these benefits can lead to meaningful operational and financial advantages.
Two ways to use a zone
- In-Plant
A company can have its own facility designated as an FTZ site or subzone. Manufacturers and distributors with high import volumes, substantial inventory levels, or production activities that warrant the necessary compliance infrastructure can benefit from establishing an in-plant site.
- Through a third-party logistics provider
Companies with smaller or less predictable volume do not need to designate their own building. They can move goods through an existing FTZ operator’s warehouse and use that operator’s compliance infrastructure. This lowers the cost of entry considerably and is a practical first step for companies.
Who can benefit?
FTZ programs are not limited to large multinational companies. Manufacturers, distributors, logistics providers, warehouses, and other businesses that import goods may find value in participating.
How can I learn more?
Businesses interested in understanding whether FTZ participation makes sense for their operations are encouraged to contact the McHenry County Economic Development Corporation for information on available resources and next steps.
Join us on Thursday, September 24, 2026 for an FTZ launch event at JA Logistics in McHenry. The program will cover how day-to-day zone operations work and what participation looks like for McHenry County companies. Registration details are available at mchenrycountyedc.com.
The Bottom Line: If your company imports goods, manufactures products with imported components, or participates in international trade, the new FTZ operator in McHenry County may provide a valuable opportunity to reduce costs and improve efficiency.