The Eilat Free Trade Zone is the Israeli special economic zone established under the 1985 Eilat Free Trade Zone Law granting tax relief, VAT exemption on tourism services, and reduced customs barriers for goods passing through Israel's only Red Sea port and Israel's southernmost city. The zone was designed to leverage Eilat's unique geographic position as the gateway between Mediterranean Israel and the Indian Ocean, Gulf, and East Africa trade routes.
The Eilat Free Trade Zone's commercial significance was structurally diminished beginning in late 2023 when the Houthi Red Sea campaign functionally suspended Eilat's commercial port operations. The zone's tourism component remains operational but the freight throughput role has collapsed. IMEC corridor activation under Saudi-Israeli normalization would partially reactivate Eilat's role as a southbound transshipment node.
Full coverage: Eilat Port and the Red Sea Crisis.
