What is the full form of FTZ

FTZ: Free Trade Zone

FTZ stands for Free Trade Zone. It is also called foreign-trade zone. It refers to an area where goods can be landed, handled, manufactured and re-exported without the intervention of customs authorities. It also allows duty-free import of raw materials, semi-finished or finished goods, etc. These items can be stored, assembled, or processed for re-export or to send into the market of the importing country.

Free Trade Zones are usually found around major seaports, airports and national frontiers areas which offer various geographic advantages for trade, e.g. Hong Kong, Singapore, Copenhagen, Stockholm, Los Angeles and New York City, etc.

The main purpose behind creating free-trade zones is to remove or reduce hindrances to trade at seaport, airport or border areas due to high traffic and customs regulations. Thus, it results in quicker turnaround of ships and planes and allows fabricating, refinishing and storing goods freely.

The concept of free trade zones started in Uruguary and Argentina in the initial decades of 20^th century. In the 60s and 70s, FTZs were developed rapidly across the world. In 1999, there were around 3000 FTZs across 116 countries in the world. Some of the major products developed in free trade zones are clothes, toys, shoes and electronic goods.

Purpose

To develop the economy of a location by creating job opportunities, business options, etc.
To develop export-oriented units and increase foreign exchange earnings.

Benefits

Facilitates the cross-border trade by removing the unnecessary customs rules and regulations
Ensures faster turnaround of planes and ships
Less labor cost and tax related expenditures
Helps traders utilize business opportunities in a best possible way
Helps and promotes export-oriented business and industries
Helps increase foreign exchange earnings and employment opportunities