Commercial construction projects in Iran’s free trade zones face a high level of risk and uncertainty due to their specific institutional, economic, and infrastructural characteristics. Institutional complexities, economic fluctuations, infrastructural limitations, and environmental conditions are among the factors that make risk management in these projects more challenging compared with other regions of the country. The present study aims to identify and analyze the risks associated with commercial construction projects in Iran’s free zones and to propose a localized risk management framework. The research focuses on the free zones of Kish and Chabahar as case studies. In terms of purpose, the study is applied, and in terms of methodology, it adopts a mixed method approach (qualitative–quantitative). In the qualitative phase, data were collected through semi structured interviews with 15 experts in project management and professionals involved in construction projects in free zones. The data were analyzed using thematic analysis, which resulted in the identification of five main themes: institutional dysfunctions, financial and currency risks, infrastructural constraints, differences in risk management patterns in free zones compared with other regions, and risk mitigation strategies. In the quantitative phase, data were gathered through questionnaires from 264 managers and experts involved in construction projects in the Kish and Chabahar free zones. The collected data were analyzed using an independent samples t test and regression analysis. The findings indicate that the level of risk in the Chabahar Free Zone is significantly higher than in the Kish Free Zone. Furthermore, legal, institutional, and economic factors play a significant role in explaining the intensity of project risks. Based on these findings, a five stage localized risk management framework is proposed to improve the management of construction projects in free zones.