Free trade zone

A free trade zone (FTZ) or export processing zone is one or more areas of a country where tariffs and quotas are eliminated and bureaucratic requirements are lowered in order to attract companies by raising the incentives for doing business there.

Related Topics:
Export processing zone - Tariff - Quota

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Most FTZs are located in third world or peripheral countries. They are special zones where (some) normal trade barriers such as import or export tariffs do not apply, bureaucracy is typically minimized by outsourcing it to the FTZ operator and corporations setting up in the zone may be given tax breaks as an additional incentive. Usually, these zones are set up in underdeveloped parts of the host country, the rationale being that the zones will attract employers and thus reduce poverty and unemployment and stimulate the area's economy. These zones are often used by multinational corporations to set up factories to produce goods (such as clothing or shoes).

Related Topics:
Third world - Peripheral - Trade barrier - Tariff - Bureaucracy - Tax break - Multinational corporation

~ ~ ~ ~ ~ ~ ~ ~ ~ ~