Free economic zone

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Geographic locations of the Free Economic Zones as of 2012

Free economic zones (FEZ), free economic territories (FETs) or free zones (FZ) are a class of special economic zone (SEZ) designated by the trade and commerce administrations of various countries. The term is used to designate areas in which companies are taxed very lightly or not at all to encourage economic activity. The taxation rules are determined by each country. The World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures (SCM) has content on the conditions and benefits of free zones.[1]

Some special economic zones are called free ports. Sometimes they have historically been endowed with favorable customs regulations such as the free port of Trieste. As Britain was proposing the creation of ten free ports after leaving the European Union in early 2020, the EU was clamping down on 82 free zones after finding that their special status had aided the financing of terrorism, money laundering and organised crime.[2]


According to the 1999 Revised Kyoto Convention, a "'free zone' means a part of the territory of a contracting party where any goods introduced are generally regarded, insofar as import duties and taxes are concerned, as being outside the customs territory."[3]


An early type of special economic zone was free ports, these historically were endowed with favorable customs regulations. In modern times free port has come to mean a specific type of special economic zone, for example LADOL.

All "free ports" in the world were permitted by the respective states, save the Free Port of Trieste that with the signing of the 16th Resolution of the Security Council of the United Nations[4] (10 January 1947) and the signing of the Treaty of Peace with Italy[5] (10 February 1947, ratified 15 September 1947) were put territorially under the sovereignty of the United Nations itself. As cited on Annex VIII, Article 3 paragraph 2: "The establishment of special zones in the Free Port under the exclusive jurisdiction of any State is incompatible with the status of the Free Territory and of the Free Port". For example, it was not possible to apply the "Italian Law on Ports" in the extraterritorial free zones of the UN Free Port of Trieste with the effect that all actual territorial concessions were null and void.

In 1954 the Free Territory of Trieste was dissolved and given to its neighbours, Italy and Yugoslavia.

Criminal use[edit]

The European Union in 2020 introduced new stricter rules to identify and report suspicious activities at free ports and zones in response to the "high incidence of corruption, tax evasion, and criminal activity", with a further review to take place in the following year, The European Parliament suggested that increasing demand for free ports could be partly a response to global crackdowns on tax evasion. The European Commission in a report said that free ports were popular for the storage of art, precious stones, antiques, gold and wine as alternative assets to cash, and posed an emerging threat in multiple ways: allowing counterfeiters to land consignments and tamper with loads and paperwork, then re-export the products without customs formalities, disguising the actual origin and nature of the goods and their supplier. The commission said they were also used for narcotics trafficking, the illegal ivory trade, people smuggling, VAT fraud, corruption and money laundering. "Legal businesses owned by criminals remain key to money-laundering activities ... Free ports are perceived as facilities that protect their clients' identity and financial dealings, much as private banks used to." As an example the commission cited Swiss authorities' 2016 seizure of cultural relics looted from the Middle East being stored in Geneva's free ports.[2] The free port system has been accused of facilitating international art crime, allowing stolen artworks to remain undetected in storage for decades.[6]

List of free economic zones by country[edit]







  • Cobija Free Economic Zone (Zona Franca de Cobija, in Spanish)[11]








  • Port Said Public Free Zone
  • Alexandria Public Free Zone
  • Nasr City Public Free Zone
  • Suez Public Free Zone
  • Ismailia Public Free Zone
  • Damietta Public Free Zone
  • Media Public Free Zone
  • Shebin El- Kom Public Free Zone
  • Qeft Public Free Zone
  • Port Said East Port Public Free Zone





  • Tema, Free Zone Enclave




  • Sulaymaniyah Free Zone



South Korea[edit]




North Macedonia[edit]

  • Free Economic Zone Skopje 1[40]
  • Free Economic Zone Skopje 2[40]
  • Free Economic Zone Stip[40]
  • Free Economic Zone Tetovo[40]









Zona Franca de Barú, Barú[46][47]


  • Tacna Free Economic Zone (Zona Franca de Tacna, in Spanish)[48]



Qatar has free zones and Special Economic Zones with differing laws on taxation and corporate ownership


In Russia there are only Special Economic Zones

Technical/Innovational Zones

Industrial/developmental Zones

Tourist Zones


Serbia has 14 free economic zones as of September 2017;[50] these are:[50]

  • Free Zone Apatin
  • Free Zone FAS-Kragujevac
  • Free Zone Kruševac
  • Free Zone Niš-South
  • Free Zone Novi Sad
  • Free Zone Pirot
  • Free Zone Priboj
  • Free Zone Smederevo
  • Free Zone Subotica
  • Free Zone Svilajnac
  • Free Zone Šabac
  • Free Zone Užice
  • Free Zone Vranje
  • Free Zone Zrenjanin



  • Berbera Free Zone DP World BFZ[51]







United Arab Emirates[edit]

United Kingdom[edit]

After Boris Johnson's Conservative government was elected in December 2019, it announced plans to set up ten free ports in the UK by 2021.[55] Prior to 2012 the UK operated 5 free ports, Liverpool, Southampton, Port of Tilbury, Port of Sheerness and Prestwick Airport, before David Cameron's Conservative government allowed legislation allowing free ports to expire.

During the 2021 United Kingdom budget, Chancellor of the Exchequer, Rishi Sunak announced that eight new freeports would be created.[56] They are East Midlands Airport , Felixstowe and Harwich , Humber region , Liverpool City Region , Plymouth , Solent , Thames , Teesside.[57]

United States[edit]



See also[edit]


  1. ^ "WTO Subsidies and Countervailing Measures: overview. Agreement on Subsidies and Countervailing Measures ("SCM Agreement")". World Trade Organization. Archived from the original on 13 January 2021.
  2. ^ a b Daniel Boffey (10 February 2020). "EU clamps down on free ports over crime and terrorism links". The Guardian.
  3. ^ Revised Kyoto Convention 1999.
  4. ^ "S/Res/16(1947) - e - S/Res/16(1947)".
  5. ^
  6. ^ Rachel Corbett; Julia Halperin; Richelle Simon (30 June 2015). "Experts identify top six scandals amid boom in art crime". The Art Newspaper.
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  11. ^ "Zofra". 2015-11-02.
  12. ^ a b c d e f g h i "Zonas Francas Permanentes en Colombia". Invierta en Colombia (in Spanish). Retrieved 2020-09-03.
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  19. ^ "Integrated Business City - Sri City". Retrieved 12 May 2016.
  20. ^ Administrator. "MARG Swarnabhoomi smart city by MARG Group, a GRK Reddy Venture". Retrieved 12 May 2016.
  21. ^ "Account Suspended".
  22. ^ "Shannon Heritage Home". Retrieved 12 May 2016.
  23. ^ "Korean Free Economic Zones". Retrieved 12 May 2016.
  24. ^ Authority), BJFEZ (Busan-Jinhae Free Economic Zone. "BJFEZ (Busan-Jinhae Free Economic Zone Authority)".
  25. ^ Archived 2009-06-05 at the Wayback Machine
  26. ^ 국문 사이트. "광양만권경제자유구역청". Retrieved 12 May 2016.
  27. ^ "Home : IFEZ 대표".
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  40. ^ a b c d "Home". Retrieved 12 May 2016.
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  42. ^ a b "Law on Economic Zones - Invest Mongolia".
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  45. ^ (PCI), Pakistan-China Institute. "CPEC - China-Pakistan Economic Corridor (CPEC)".
  46. ^ "Zona Franca De Barú". Retrieved 2020-09-03.
  47. ^ "Doing Business in Panama" (PDF). American Chamber of Commerce and Industry of Panama.
  48. ^ "ZOFRATACNA - Zona Franca de Tacna, Perú". Retrieved 12 May 2016.
  49. ^ "Special Economic Zones". Manateq. Archived from the original on 2016-04-06. Retrieved 2016-07-29.
  50. ^ a b Mikavica, A. (3 September 2017). "Slobodne zone mamac za investitore". (in Serbian). Retrieved 17 March 2019.
  51. ^ "DP WORLD TO DEVELOP FREE ZONE IN SOMALILAND -" (PDF). Retrieved 6 Nov 2017.
  52. ^ Rafis Abazov, Historical Dictionary Of Turkmenistan, p. 62, ISBN 978-0-8108-5362-1
  53. ^ "Abu Dhabi Global Markets". Retrieved 29 July 2018.
  54. ^ "JAFZA (Jebel Ali Free Zone)". Retrieved 23 November 2015.
  55. ^ David Goodman (10 February 2020). "U.K. Begins Search for Free Ports as Spending Pledges Mount". MSN. Bloomberg.
  56. ^ "Freeports: What are they and where will they be?". BBC News. 2021-03-03. Retrieved 2021-03-03.
  57. ^ [1]
  58. ^ a b c "Xây dựng 3 "đặc khu kinh tế" Vân Đồn, Bắc Vân Phong và Phú Quốc" (in Vietnamese). N.Mạnh. 7 December 2016. Retrieved 22 May 2017.
  59. ^ "Aden Free Zone". Aden Free Zone Authority. Archived from the original on 29 February 2012. Retrieved 12 May 2016.


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