# Free Trade Zone

*Last updated: 2026-06-26*

> A Free Trade Zone (FTZ) is a designated physical area – typically at a port, airport, or border crossing – where goods may be stored, processed, assembled, or re-exported without payment of customs duties or import taxes, provided they are not released into domestic circulation.

A Free Trade Zone (FTZ) is a designated physical area – typically at a port, airport, or border crossing – where goods may be stored, processed, assembled, or re-exported without payment of customs duties or import taxes, provided they are not released into domestic circulation. Duties apply only at the point of entry into the local market. Importers and freight forwarders use FTZs to defer tariff liability, optimise inventory management, and carry out value-added operations such as labelling or light assembly before final distribution. The term is frequently confused with a free trade agreement, which is a treaty between governments to reduce mutual tariffs – an FTZ is a physical infrastructure, not a diplomatic instrument. Under EU customs law, the equivalent framework is the free zone as defined in the Union Customs Code.

**Source:** [https://ec.europa.eu/taxation_customs/business/customs-procedures-import-and-export/free-zones_en](https://ec.europa.eu/taxation_customs/business/customs-procedures-import-and-export/free-zones_en)

## Quick Facts

| Property | Value |
|---|---|
| Term | Free Trade Zone |
| Language | EN |
| Word count | 133 |
| Last updated | 2026-06-26 |
| Source | https://ec.europa.eu/taxation_customs/business/customs-procedures-import-and-export/free-zones_en |

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