The importance of free zones: tax and customs advantages

The Barceló Hotel in Tangier hosted the 10th Hispano-Moroccan Maritime, Transport and Logistics Meeting organised by the Spanish Chamber of Commerce in the Tangier city.

On the occasion of such an important event, Atalayar had the opportunity to speak with Rocío García-Delgado Coronel, director of the Department of Business Promotion and Foreign Trade of the Cadiz Free Trade Zone, and Francisco Piñero Parra, administrative officer of the aforementioned Department. 

Both officials explained the activity of the Cadiz Free Trade Zone and its importance at the fiscal and customs level and highlighted the importance of the logistics and maritime sector in the economic activity between Spain and Morocco. 

One of the most important elements in all maritime traffic is the free zone. So, Rocío, what is a free zone?  

(R) A free zone is an area where there are a series of tax and customs advantages for goods, where goods can be kept for an unlimited period of time, where guarantees are suspended and where goods can also be transformed.  

So, what differentiates us from any other logistics centre is, above all, this series of tax and customs advantages that we only have in the free trade zone. There are seven of us in the whole of Spain.  

The aim is to make it easier for goods to be treated, to be dispatched and to have greater viability, as I understand it. 

(R) Effectively, it also gives companies the advantage of obtaining greater liquidity by not having to provide guarantees or by having the goods for an unlimited period of time, which means that stocks can be produced or that they can be partially cleared with the payment of the relevant taxes, but every so often, not all at once. So, from a financial point of view, it is also very interesting.  

How does the Cadiz Free Trade Zone work? Because I think it is one of the best in Spain; of the seven that exist, I think it occupies a privileged place for its work and its quality. 

(R) Indeed, ours is one of the oldest, we are now celebrating our 95th anniversary. We have the Cadiz Free Trade Zone, which has 500,000 square metres and is, together with the Barcelona and Vigo Free Trade Zones, the most important. 

Indeed, they are pioneers and have the highest turnover. Right now, we are launching the Algeciras Free Trade Zone and Cadiz is going to have two free trade zones in the same province. This is something that not all provinces have, obviously, because there are only seven free trade zones in Spain. 

Francisco, what role has the Cadiz Free Trade Zone played in this Spanish-Moroccan meeting? What was its participation, its contacts and its objectives?  

(F) The objective was to take advantage of the possibilities that we offer in terms of traffic between Morocco and Europe or Spain. Several sectors can benefit from all this flow. 

At the meeting, there were several fundamental points: decarbonisation, sustainability, innovation and, in addition, the subject of collaboration, complementarity between ports, between transport companies, etc...  What role can the Cadiz Free Trade Zone play in all these key elements discussed at the meeting?   

(R) On the subject of sustainability, we are currently undergoing a consultancy to certify us as sustainable companies.  

In addition, we have a very relevant project that has already had national and international repercussions, which is our high-tech incubator in Blue Economy, where we already have more than 80 start-ups that are really launching themselves through our spaces and our mentoring. 

And all digitised, because that was another element of this meeting. 

(R) Indeed, digitalisation and also all the technology companies that are being implemented. But it is worth noting that, in recent times, we have been receiving a lot of requests for spaces for technology companies and, in fact, very important national and international companies are setting up in the Cadiz Free Trade Zone, for example. 

What projects does the Cadiz Free Trade Zone have? Has there been any contact with Morocco that has borne fruit? Or any development projects of its own that the Free Trade Zone has?  

(R) Our main interest in Morocco is, obviously, to get to know the market, what is close to us and, above all, the launch of the Algeciras Fiscal Precinct, which will soon be operational.   

We consider it key at a logistical level, both for companies here that want to set up or that want to have stock already in Europe, and there is no doubt that the value of being three kilometres from the port is basic and strategic for any company that wants to distribute to Europe from Morocco.  And, in both directions, obviously, to have from Europe to distribute to Morocco and Africa. 

(F) It is a logistical point so that companies can use it and channel their shipments or their activity in one direction or another.  

For example, companies can use the Free Trade Zone in such a universal project with such great prospects as the organisation of the World Cup, which is going to require infrastructures and that many companies will have to work both in Spain and Morocco. Or do you think that the Free Trade Zone will not be affected by the World Cup organised by Spain, Morocco and Portugal?   

(R) It is a relevant point of interest, especially for logistics and, for example, we have been talking to express transport companies. I think that at a logistical level is where it is going to play a role for the companies that are currently established.  

We now have about 10 companies that are logistics companies and they are going to dedicate themselves to it, so everything that is linked to the World Cup is going to have a direct impact on the Free Trade Zone spaces in the Algeciras Tax Zone.  

(F) It is going to require a lot of movement in a very short space of time; therefore, they are going to need a lot of storage space. The Free Trade Zone can offer them the possibility of using the space provided and they can stockpile the goods and maintain the corresponding customs statuses for the goods, and not pay the corresponding taxes at that time for having them stored in that space.  

Because the free zone is also a customs regime that allows the goods that are linked to this regime to benefit from not paying any type of tax while they remain within the free zone.   

Very good prospects. So, I am satisfied with your participation in this meeting. They have fulfilled their objectives, they are satisfied, happy. There is business, there are possibilities for collaboration... 

(R) We are leaving very happy. The truth is that we were pleasantly surprised. We have made very good contacts and, above all, there is a great interest on the part of Moroccan companies, in terms of logistics and everything related to transport that connects these two continents in order to establish secure traffic lines and to have stock from Europe in case of any contingency that may occur, without delay, in order to be able to supply their clients. Having goods in Europe now.  

One issue that we have not dealt with is that of security and inspection so that everything is in order and so that there are no problems or goods that are not where they should be.  

(R) Actually, the control is done from the port. We receive the goods in the Free Trade Zone, which is undoubtedly valuable and makes perfect sense. The Free Trade Zone next to the port is what makes sense for everyone, whether for shipping companies, logistics or industries, and there is no doubt that the launch of this Algeciras Bonded Warehouse is what will bring us new customers.