A free zone is an area inside a country's political borders but treated as outside the customs line, where tax and trade legislation is applied partly differently. Goods entering the zone can be stored, processed and re-exported without being subject to the import regime.
Its value for e-export is being able to position product close to the target market or free of duty and ship it as demand comes in. Because a delivery from the domestic market into a free zone counts as an export, it creates a VAT exemption; that also affects the VAT refund flow. Operating in the zone requires obtaining a user license and taking on rental cost, so for low-volume businesses the advantage often does not cover the cost. The decision has to be made together with annual shipment volume and stock turnover.
Its value for e-export is being able to position product close to the target market or free of duty and ship it as demand comes in. Because a delivery from the domestic market into a free zone counts as an export, it creates a VAT exemption; that also affects the VAT refund flow. Operating in the zone requires obtaining a user license and taking on rental cost, so for low-volume businesses the advantage often does not cover the cost. The decision has to be made together with annual shipment volume and stock turnover.
Its value for e-export is being able to position product close to the target market or free of duty and ship it as demand comes in. Because a delivery from the domestic market into a free zone counts as an export, it creates a VAT exemption; that also affects the VAT refund flow. Operating in the zone requires obtainin…
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