Definition
Free trade zone
A free trade zone is any location where goods can be shipped, handled, manufactured, reconfigured and re-exported without the involvement of customs agencies. A major seaport, an international airport or a border facility between two or more countries may be designated a free trade zone.
Customs duties are applied when goods are shipped outside the free trade zone.
More about free trade zones
Where a free trade zone does not exist, a company selling products into a foreign market may use a bonded warehouse to store goods without paying duties.