Glossary
Foreign Trade Zone (FTZ)
A designated area within a country where goods can be imported, stored, and processed without being subject to customs duties until they enter the domestic market.
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What is Foreign Trade Zone (FTZ)?
A Foreign Trade Zone (FTZ), also known as a Free Trade Zone or Export Processing Zone, is a designated area within a country’s territory where special customs rules and regulations apply to encourage international trade and attract foreign investment. FTZs offer various benefits, including customs duty deferral, tax incentives, streamlined customs procedures, and exemption from certain trade restrictions. Companies operating within FTZs can import raw materials, components, or finished goods without paying customs duties or taxes until the goods are released for sale or export.
FTZs promote economic growth, support manufacturing, and facilitate trade by providing businesses with a strategic location to conduct international operations while enjoying cost savings and other advantages.
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