A designated area within a country where goods may be landed, stored, handled, manufactured, and re-exported without being subject to customs duties. These zones are often situated near major ports, airports, or borders to facilitate international trade. For example, a location near a large shipping port might allow components to be imported, assembled into a final product, and then exported without tariffs.
These areas promote economic growth by attracting foreign investment and increasing trade volume. Reduced tariffs and streamlined customs procedures can lower production costs for businesses operating within the zone, making them more competitive in the global market. Historically, they have served as catalysts for industrialization and job creation in developing economies, offering opportunities for diversification and integration into global supply chains.