Exploring the Advantages of Free Trade Zones #26

Historically, Free Trade Zones were confined to manufacturing and warehousing, but in recent years they’ve also been housing office operations, liked the shared service centres we were talking about in an earlier episode of Grow through International Expansion.

Where they exist, Free Trade Zones bring some obvious advantages to businesses setting up in another country. To start with, the “Free” means free of taxes – essentially they are zones physically within one country that treat every economic activity within them like being in a duty free shop – there’s no tax as long as everything created or manufactured is then sold abroad in another country. Some countries also allow sales within the country, though they are usually restricted in some way, typically by proportion of turnover or for a limited number of years.

But there are other advantages to Free Trade Zones too, such as being co-located in the same campus or complex as other similar businesses. That can help a lot with shared resources such as meeting rooms and catering, and helps with recruiting suitable staff too.

When our host, Oliver Dowson, was in Uruguay a couple of years ago, he was introduced to the different types of Free Trade Zones in the country, and was really impressed. Uruguay is different to other South American countries in that it’s the only one with Free Trade Zones. It’s a small country that’s used FTZs and leveraged its position and economic strength to become an attractive hub location for doing business all over Latin America.

On a recent return visit, Oliver took advantage of being there to revisit four very different Free Trade Zones. For this Grow through International Expansion podcast, he talked to the directors of each of them about the opportunities they offer and the differences between them.

The FTZs featured in this podcast are

Aguada Park - director Francisco Ravecca – www.aguadapark.com

Zonamerica - director Leandro Bonilla – www.zonamerica.com

World Trade Centre - director Ignacio Del - http://www.wtc.uy/wtc/

Parque de las Ciencias (Science Park) –General Manager Enrique Pueblo - http://www.zonafrancapdlc.com/