ORIGINS
We have to look back more than two thousand years ago, to understand the concept
of Free Zone. When the Phoenicians in the cities of Carthage and Tyre, gave fiscal profits on the goods,
which had not been sold in the market or had been returned to their point of origin.
In the Middle Ages, Livorno and Marseilles were declared free ports.
Lately, Hamburg and Trieste operated as free ports. Hamburg, one of the first operating,
had and still has a special importance. Their work made that political and economic trade difference,
which dominated the Hanseatic League in that region during the XIX century. Concerning Trieste,
its Free Zone dominated the whole trade of the Austro-Hungarian Empire for many years.
In the last decades, Free Trade Zones have been the tools through which many countries
overcame their economic crises. Using Free Zones they were able to create new employment and to reduce poverty,
without being obliged to wait for many years for the whole economy to be reformed.
The Free Trade Zones have largely contributed to the fact that both countries have reached
an important level of economic development. This has occurred, despite the fact that neither country has any
significant amount of natural resources.
HOW TO DEFINE A FREE ZONE
A Free Zone is a portion of clearly defined and isolated land or setting,
with a special fiscal and customs status of extra-territoriality.
The main advantages that a Free Zone enjoys, both fiscal and physical, include:
The infrastructure
The industrial processes
The maquila process
The trade of products and services
The capital
The natural or juridical people operating in there
The percentage of the fiscal benefits, as well as the period of application of the
incentives varies according to the law of each country or region.
There are more than 20 types of Free Zones in the world, but their definition is
conceptually the same: a defined area with a special tax and imports regime. So we have:
Free Port
Export Processing Zones
Free Trade Zones
Bonded warehouses
Fiscal Warehousesl
And at the present time, new types of them are being developed, such as:
Tourist, hospital (medical) and educational Free Trade Zones.
Logistical Free Trade Zones
The present boom in the establishment of the e-commerce “B2B” whose activity is a virtual
Free Zone, is that e-commerce has a problem with the delivery and storage of goods which could be solved by the
fact that merchandise could be stored in a Free Zone located near the customers. This would reduce the delivery
delay and the storage costs.
COMPETENT AUTHORITIES
The Free Zones are regulated by the established laws from the government of each country,
and in many locations by an entity, which controls the execution of the Free Zone law and its activities.
This Free Zone authority guarantees to the investors, reliable services and well regulated and properly
paid labour.
The concession for the exploitation and development of a Free Zone can be handled
through open, public bidding or by a direct concession to possible promoter companies.
The Concessionaire Company or operator can be public, private or mixed. The
duration of the concession can be for a period from 10 to 20 years, which can be extended.
| Next... |
