Manufacturing, autos and logistics
Free zone
An area with special customs, tax or ownership rules to attract trade and investment.
Last reviewedWhat does Free zone mean?
A free zone (also called a free trade zone or, in India, a special economic zone) is a defined area where goods can be imported, stored, processed and re-exported without paying the usual customs duties, often with tax breaks, simpler licensing and, in some countries, full foreign ownership. Jebel Ali Free Zone (JAFZA) in Dubai is a well-known example, and India has many special economic zones. Example: a firm that imports 10 million of components into a UAE free zone, assembles them and re-exports the product avoids the 5 percent customs duty that would otherwise apply, saving 500,000. Rules differ by zone, and goods sold into the local market usually pay duty.
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