Top 10 Free Trade Zones with high economic activity: biggest players in the global market

There are many trade zones around the world that exist to create better conditions for the movement of goods, services, and capital between countries. Among these, some giants stand out – the largest free trade zones (FTZs). Together, their economic growth potential makes up a significant share of global GDP.

We will explore these free trade zones around the world, how they remove certain trade barriers, and why companies are taking advantage of them. If you’re interested in gaining access to global markets by setting up an offshore company, we are here to help you minimize the stress of the process, making it easier, so you can focus on new opportunities and business growth. 

What Is a Free Trade Zone?

Free Trade Zones (FTZs), also called free commercial zones, are a subtype of special economic zones. They are designated geographic areas where international export and import activities face minimal or zero trade barriers such as tariffs, quotas, and taxes.

Free trade zones are created by governments of one or more countries in order to attract business. For this purpose, more favorable conditions are established within the Free Trade Zone than those that exist in the country or region. Companies in these zones can enjoy of the following:

• Tax incentives (including reduced or zero import/export duties, VAT exemptions, and income tax relief).
• Simplified customs clearance and operational procedures.
• Strategic location near ports or borders to facilitate logistics.
• Lower operating costs due to supportive infrastructure and regulations.

Free zones can either be within a country or multi-country, where they cover the territory of several jurisdictions. Usually, they are located near ports or borders, as well as airports,  and logistics hubs, The zones are strategically located almost as a rule. 

In addition to geographic affiliation, free trade zones can also specialize in specific industries, such as manufacturing or technology, or they can be universal.

The main goal of FTAs is to promote economic growth and development by attracting foreign investment, increasing exports, and creating jobs. Due to the favorable business conditions in free trade zones, the companies located there incur lower costs and thus become more competitive.

The Main Advantages of Free Trade Zones

Today, there are thousands of Free Trade Zones in the world. Naturally, each of them has its strengths and weaknesses. However, certain advantages, which attract businesses to them, are common to all FTAs:

• Tax incentives. FTAs usually offer special tax conditions, including the following: reduction or elimination of import and export duties, as well as exemption from income, local taxes, and VAT;
• Simplified customs procedures. Companies in Free Trade Zones enjoy the benefits of simplified customs clearance procedures, which allow for reducing the clearance time and lowering the costs of importing and exporting goods;
• Access to international markets. FTAs provide companies with access to international markets, helping to increase exports by providing favorable terms of trade and removing trade barriers;
• Infrastructure. Local authorities try to organize advanced infrastructure (such as transportation networks or telecommunications) in free trade zones to attract investors. The existence of already built roads, ports, railways, and other elements of infrastructure in the FTZ allows for reducing the investors’ logistics costs;
• Flexibility of regulations. Free zones have different rules and laws that result in more flexible and less constraining regulations, allowing companies to experiment with new processes, products, and technologies.

In addition to the advantages for investors, free trade zones also have some benefits for governments. Here are some positive factors:

• Creating jobs. FTZs with good business conditions attract international and national companies, which register legal entities and employ the local population;
• Attracting foreign investments. Due to more favorable conditions for activities (low taxes, developed logistics, etc.), free trade zones attract foreign companies looking for an opportunity to reduce their costs.

Find out the advantages of registering a company in the Free Trade Zone in the UAE.

Top 10 Largest Free Trade Zones in the World

There are around 3,000 Free Trade Zones in the world, located in 135 countries. Following is the description of the largest and most attractive FTZs.

The African Continental Free Trade Area, AfCFTA

The largest free trade zone in terms of area in the world is AfCFTA. It was created in May 2019 but became fully operational in January 2021. It covers 55 African countries with a combined population of over 1.4 billion. That also makes it the largest free trade area in terms of population and number of participating countries. The cumulative GDP of the latter is about $3.5 trillion.

United States-Mexico-Canada Agreement, USMCA

The USMCA is the second-largest free trade area in the world and the first in terms of potential turnover. The US-Mexico-Canada Agreement came into force on July 1, 2020, replacing the North American Free Trade Agreement (NAFTA) that had existed since 1994.

The goal of the agreement is to remove trade barriers between participating countries, which should encourage economic activity. USMCA covers countries with a total population of more than 500 million people and a combined GDP of about $27 trillion. 

The European Union

The EU remains a top international trade bloc, with 27 members, 447 million people, and a GDP of $17 trillion in 2025. Its single customs market and integrated trade zones make it a model for others. It is the third largest economy in face value and purchasing power parity after the US and China. 

Within the EU, the single market rule operates, which implies the free circulation of goods, capital, and people. The European Union has also concluded several free trade agreements with countries that are not its members, which makes it even more attractive.

Find out about the benefits of doing business in a Free Trade Zone in Turkey.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP or TPP-11

The trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam was originally based on the Trans-Pacific Partnership, which never worked due to the fact that the United States refused to participate in it.

The 11 member countries of the CPTPP agreement comprise 13.4% of the global GDP, which is approximately $14 trillion. 

The ASEAN Free Trade Area, AFTA

This Free Trade Zone was established in August 1967 in Bangkok. It unites ten countries: Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Laos, Myanmar, and Cambodia.

By 2030, the participating countries are planning to become the fourth-largest integrated economic partnership in the world, with a GDP of $4 trillion. This growth should be facilitated by an increase in the incomes of their combined population of 600 million. According to forecasts, over the current decade, about 65% of the inhabitants of these countries will form the middle class.

It is important to note that in 2010, the ASEAN countries entered into a free trade agreement with Australia and New Zealand, which increased the total GDP to $4.5 trillion by 2025. 

The Gulf Cooperation Council, GCC

Established in May 1981, this customs union includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. These countries started the market integration process in early 2008. By 2015, it was completed and marked with the creation of a customs union.

As a result, the citizens of the countries received the following advantages:

• equal employment rights;
• freedom of movement between countries;
• free access to social insurance and pensions;
• the right for free movement of capital, including equal rights in real estate management;
• free access to education, health care, and other social services of all the Member States. 

However, today, there are still some barriers to the free movement of goods and services in this zone. The combined population of the GCC trade union is about 57.5 million, and its GDP is around $4.1 trillion in 2025.

The Southern Common Market, MERCOSUR

The full members of this agreement are Argentina, Brazil, Paraguay, and Uruguay. Until 2016, MERCOSUR included Venezuela, but its membership has been suspended. The associated trading bloc countries are Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname.

The agreement aims to create a single market in Latin America, which should help promote the development of free trade and the movement of goods, people, and currency. 

Since its foundation, the goals and objectives of MERCOSUR have undergone several changes and additions. Today, the association is limited to the customs union, within which there is an FTZ based on a common trade policy between member countries.

The GDP reached $5.3 trillion in 2025, expanding its trade barriers reduction strategy across Latin America.. The union has also signed a free trade agreement with Israel, Egypt, Japan, and the EU, which has provided it with even more economic power.

The Pacific Alliance

The Alliance, created in April 2011, is the association of four South American countries: Chile, Colombia, Mexico, and Peru. All of them include some coastline of the Pacific Ocean, which explains the name. Its main goals are as follows:

• free movement of goods, services, and people among the member countries;
• stimulating the development and competitiveness of the participants;
• the prospect of further integration into the Asia-Pacific region. 

The combined population of all member countries of this Free Trade Zone is 240 million people and a GDP of $2.4 trillion in 2025..

In addition to removing trade barriers, the Pacific Alliance has launched several other projects. These are visa-free tourist trips, the common stock exchange, and joint embassies in several countries.hese are visa-free tourist trips, the common stock exchange, and joint embassies in several countries.

The Common Market for Eastern and Southern Africa, COMESA

This African economic community includes 21 countries: Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia, Zimbabwe, Rwanda, Burundi, Comoros, Libya, Seychelles, Tunisia, Somalia, Eritrea, Ethiopia, Uganda, Eswatini, and Congo.

600+ million people and a GDP of $830 billion in 2025.. Geographically, COMESA occupies almost two-thirds of the African continent, and its total area is around 12 million square kilometers.

The main aim of the union is to ensure the free movement of goods and services and to encourage the economic development of all participating countries..

The Eurasian Economic Union, EAEU

This association includes Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan and has Free Trade Partnerships with Iran, Serbia, Vietnam, and China. In addition, more countries are preparing to join. The union started its work in January 2015. Its main goal is to organize a single market for goods, services, capital, and labor. 

Member countries of the Eurasian Economic Union represent an integrated market with a total area of 20.26 million square kilometers and a population of around 181.27 million people, and has a combined GDP of $2.7 trillion in 2025.

Who Benefits and How: Business Use Cases

Multinational companies and smaller-level industries can benefit from lower taxes and import/export fees, as well as access to the larger markets. Here is an overview, however, of some of the key businesses that benefit from these zones. 

• Manufacturers move import/export components in and out of FTZs with customs exemptions and reduced duties.
• Technology firms leverage flexible operational rules to prototype and export.
• Logistics and suppliers use zones near ports/borders (and zones across Dubai or near the Panama Canal) to reduce shipping time.
• Offshore company structures (e.g., registering a free zone company in jurisdictions like Mauritius or the Cayman Islands free trade zone) are often used for tax planning and confidentiality.
• SMEs can use FTZs to reduce costs, facilitate exports, access new global markets, and partner with local suppliers without the same capital requirements as full-scale industrial operations.

Remember, however, if you want to set up a company in one of these zones, every country is different. Registering a company to access markets in the Middle East and Africa? You’re better off considering the UAE for the formation process. What about Central, North, and South America? Panama would be a solid option, especially considering its location near the Panama Canal, ease of formation, and tax incentives. In many countries, we have established companies with legal systems designed to encourage company formation, ranging from multinational companies to SMEs. 

Why Use Q Wealth for Company Registration in a Free-Trade Zone?

Registering a company in a country participating in a free trade zone offers several business benefits. However, each zone has unique properties and characteristics. If you want to organize a business structure abroad and are looking for a jurisdiction that best suits your goals and objectives, contact us at: in**@***********rt.com. Our experts will help you choose the jurisdiction and provide all the necessary assistance in creating a company.