1. An Illustrative Understanding of a Free Zone
Imagine you have created a video game. A serious gaming company gets interested and buys
the rights to your game. The company decides to manufacture the game software cartridges in
one country and the video game players in yet another country. Packaging of game software
cartridges and the video players will happen in yet another country. Shipping of these packages
will follow suit in order to sell them in different countries across the globe. The question that
comes here is; how will the gaming company and you keep track of all these moves from
country to country? Also where will the game cartridges and the video game players be stored
prior to packaging and shipping? This is where the free zone comes in.
The free zone, usually located at an airport or a sea port is an area specially meant for people
who trade or ship products. Did you know that the hosting country does not charge tariffs,
taxes or duties on goods as long as they are in the free trade zone? This makes it a very good
place to store goods between shipments. In addition, it can also be a very convenient place to
manufacture products whose raw materials come from various countries.
To embark on the earlier illustration, you and the gaming industry could choose to store the
game cartridges as well as the video game players at a warehouse at the free zone. You
may even go further and hire people who will help set up equipment needed to package the
cartridges together with the game players. Shipping will then follow suit and payment of taxes
only happens once the goods or products have reached their final destination.
Free trade zones have been created by countries as well as cities all over the world. Having a
place where traders can move goods easily attracts both trade and employment opportunities
in those areas. Businesses proliferate very fast in these areas due to the incentives attached to
these areas. There are actually agencies that have been set up and which can help you with the
details of your business from begin to the end. Most of these agencies are very skilled as far as
setting up a business premise is concerned and you can only sit back and smile at the outcome.
Warehouses are also available in their numbers in these areas and therefore storage of your
products should not be a big deal.