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During the Middle Ages, Livorno and Marseilles were declared free ports. Later Hamburg and Trieste operated as free ports and Hamburg still has special importance even today. It was because of these free tax zones that made political and economic trade difference in the 19th century.
In the last few decades, free tax zones are considered to be vital tools which allow many countries to overcome their economic crises. Using free tax zones allows a country to create new employment and reduce poverty without being obligated to wait for years together until the entire economy is reformed.
It is a well documented fact that free tax zones, also known as free trade zones, have largely contributed to Taiwan and South Korea reaching an important level of economic development and this happened even though both countries do not have any significant amount of natural resources.
Free tax zones are ideal for international businesses as they have many advantages. There are fiscal and physical advantages to free tax zones which include infrastructure, industrial processes, maquila process, trade of products and services, capital and natural or juridical people operating in there.
All international businesses operating through free tax zones are given fiscal benefits and the period of application of incentives varies from one country to another depending on the law of the country and/or region in which the free tax zone is established.
International businesses operating through free tax zones do not have to bother with tariffs and quotas. Usually an international business imports raw materials or components and then exports the finished products. The usual trade barriers are completely removed and while the business enjoys tax breaks along with other fiscal incentives.
Some examples of free trade zones are North American Free Trade Agreement (NAFTA), European Free Trade Association, European Union and South American Community of Nations. Most of these countries in these organizations heavily subsidize certain industries like agriculture and steel.
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International Trade And Free Tax Zone
The North American Free Trade Agreement (NAFTA) is basically a trilateral trade bloc in North America which was created by the governments of the United States, Canada and Mexico. There are two supplements to the NAFTA, the North American Agreement on Environmental Cooperation and the North American Agreement of Labor Cooperation. 
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