Legal Definitions - free-trade zone

A free-trade zone is an area within a country where goods can be imported, stored, processed, and exported without being subject to the country's usual import and export laws. This means that businesses can trade with other countries without having to pay taxes or tariffs on their goods.

For example, imagine a company in the United States wants to import raw materials from China, process them into finished products, and then export them to Europe. If they did this through regular channels, they would have to pay taxes and tariffs at each step of the process. However, if they set up their operations in a free-trade zone, they could import the raw materials, process them, and export the finished products without paying any taxes or tariffs.

Another example of a free-trade zone is the Dubai Airport Free Zone in the United Arab Emirates. This zone allows businesses to import goods, store them, and then re-export them without having to pay any taxes or customs duties. This has made Dubai a major hub for international trade and commerce.

In summary, a free-trade zone is a designated area within a country where businesses can trade with other countries without being subject to the usual import and export laws. This can help to promote international trade and commerce, and can be beneficial for businesses looking to expand their operations globally.