Free Trade Zone

Topics: International trade, Special Economic Zones, Globalization Pages: 3 (606 words) Published: May 30, 2011

Free trade zones can be defined as labour intensive manufacturing centres that involve the import of raw materials or components and the export of factory products. A free trade zone or export processing zone is an area of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. This was an attempt by Government to promote employment within a rural area, make use of a small regional airport and generate revenue for the economy. Corporations setting up in a zone may be given tax breaks as an incentive. Usually, these zones are set up in underdeveloped parts of the host country; the rationale is 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. Free Trade Zones are also known as Special Economic Zones in some countries. Special Economic Zones (SEZs) have been established in many countries as testing grounds for the implementation of liberal market economy principles. SEZs are viewed as instruments to enhance the acceptability and the credibility of the transformation policies and to attract domestic and foreign investment.

It was established in May 2000 and one of the fastest-growing and most cost-effective free trade zones in the UAE. It offers four types of business licences. It allows people to set up an entirely new business or a branch of an existing organisation. * Commercial Licence

* General Trading Licence
* Consultancy/Services Licence
* Industrial Licence

* Licences and leases (licence types, eligibility for obtaining a licence, licence renewal rules and lease and sub-lease requirements) * Activities and operations allowed at RAK FTZ
* Construction and building
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