San Diego marine construction and repair firm Marine Group Boat Works (MGBW) and the Fifth Avenue Landing marina are now the city’s newest Foreign Trade Zone activation, it was announced Nov. 12.
A Foreign-Trade Zone (FTZ) is a customs territory that expedites and encourages foreign commerce and other purposes. In an FTZ, both foreign and domestic merchandise may be admitted without being subject to formal U.S. Customs and Border Protection entry procedures and payment of duties.
Foreign Trade Zone No. 153, which includes 11 operators secured under the U.S. Customs and Border Protection direct supervision, is considered the only FTZ dedicated to luxury yachts in the state and the Southwest. This makes the West Coast a draw for foreign-flagged vessels to sell to U.S. buyers paying high import duties and other fees.
Typically, a foreign superyacht owner must pay about 1.5% of the value of the vessel in customs import duties and fees upon U.S. entry if they want to market to American buyers, MGBW President Todd Roberts said.
“On a $50 million yacht, that’s $750,000 before they even know if they will be able to find a buyer,” Roberts said. “Now, they can come to San Diego, moor their boat, start showing it to potential buyers, have maintenance done, and even leave with it temporarily to attend boat shows, all without having to worry about taking a major financial hit before a sale is made.”
The new designation allows foreign-flagged vessel owners to reap the advantages of an FTZ, which were mainly found in Florida, Rhode Island and Washington state.
It also enables MGBW, which has a superyacht refit facility in Chula Vista, to serve its customers better. About one-third of its business comes from the luxury sector.
When its international customers ask about selling, MCBW is now able to offer the opportunity to market to U.S. buyers in San Diego under the FTZ.
“We have everything they need within minutes – the marina, downtown, the shipyard and the airport,” Roberts said. “We think the yachting community will be excited to have this new option available in California.”
