Puerto Rico received approval from the U.S. Commerce Department to convert most of the industrial holdings of the Puerto Rico Industrial Development Company (PRIDCO) into a massive free trade zone (FTZ). The zone encompasses more than 4,500 acres and is the largest non-contiguous free trade zone in the U.S. FTZ status may be granted to individual sites or plants within 60 to 90 days.Manufacturers operating in the FTZ are exempt from duties on imports of raw materials. Sales taxes are payable only on goods sold within Puerto Rico. Firms that export outside of the U.S. stand to gain the most, because federal taxes are not levied on finished goods.Puerto Rico’s FTZs also provide savings to manufacturers exporting to the U.S. mainland – the destination of more than 82% of all island exports. Companies can opt to pay duties on either the finish product or on the aggregate value of the raw materials, whichever is less.Pull QuotesPuerto Rico’s FTZ encompasses more than 4,500 acres.No federal taxes are levied on finished goods exported outside the U.S.