by João Marques, Contributing Editor

A tale of delayed processes, regional competition, and a city in desperate need of industrial development compose the set of the Sevilla Free Zone, one that is set to come online in the first quarter of 2017.

The Sevilla Free Zone, with its 72 hectares of land, half of which is fenced for security reasons, will be the first river-based Free Zone in Spain, and potentially the most technologically developed. Its creation was first authorised under ministerial decision in 2013, pending the fulfillment of a number of conditions, including the establishment of a managerial consortium, which was finalised in January 2015. The area itself already hosts six companies offering services in logistics and construction materials and solutions. The goal today, as soon as all the bureaucratic processes are pushed through, is to more than double the number of companies in the area until the end of 2017. On top of the customary import and export tax exemptions, the municipality is negotiating a 20% cut on the national tax on real estate.

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Sailing forward: Designed for storage, transformation and distribution of goods for both the European Union (EU) and non-EU markets, first estimates indicate that the Free Zone could move 1.7 million tonnes of goods per year and reach an annual turnaround of 1 billion euros.

The municipality is hoping that the new structure will open the southern city to Japanese, Chinese, South American and North European markets, which have reportedly shown interest in the area.

According to local officials, the river-based nature of the Free Zone’s port provides a strategic advantage, as the sailable Guadalquivir River would be able to cut road transportation costs to the interior of the country.

A basis for business: In the wait for the opening of the Free Zone as such, the companies present in the area, Sevitrade, Jannone, Hispalense de Líquidos, C.I.L. Torrecuéllar, Transformados Huévar y la Terminal Portuaria Esclusa, are now adapting their accounting systems to deal with the changing fiscal scenario. The biggest concern, at this point, centres on the area’s financial dependency on the governmental budget. At a running cost of 1.65 million euros in 2016, the management team in the area is looking at sustainable self-financing alternatives to reduce its dependency on the state budget. In an address in January 2017, the managing consortium suggested that by no means should the area remain dependent on the state for more than four years after its official opening. In line with this pledge, a consulting company has been hired to promote the area to companies around the world with potential interest in establishing themselves in Sevilla.

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In 2014, Cádiz, home to one of the biggest continental Free Zones in Spain, voiced its complete opposition to Sevilla’s plans to build a Free Zone of its own, as the short distance between the two, around 100 kilometers, risked cannibalising business from their own Free Zone. Where for years the Sevilla Free Zone faced loud opposition by both business leaders and governmental officials in Cádiz, those voices now seem to have died off at the dawn of the opening of this new industrial pole in the EU’s fifth largest economy.

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