Free Trade Zones in Germany

Free Trade Zones in Germany

Free Trade Zones (FTZs) in Germany are special free trade areas established by the government with the objective of attracting foreign direct investment to the country, and thus, stimulating the domestic economy. Business owners and foreign investors can take advantage of the various fiscal and non-fiscal incentives provided to them in this zone by setting up their company there. Established by the Federal Law – Section 20 of the Customs Administration Act, states can apply for the conversion of some of the customs region to FTZs to the Federal Ministry of Finance. These Zones are subjected to the Community Customers legislation.

Tetra Consultants will first understand your corporate activities, free trade zone requirements, and long-term motives, before making a recommendation on the most suitable type of Free Trade Zone in Germany for you. We will also guide you through the requirements and regulations of each of these free trade zones and how you can incorporate your company in your selected zone.

What are the different types of Free Trade Zones in Germany?

• Free Trade Zones are called ‘Free Ports’ in Germany. Currently, there are three such free trade areas operating under the law of the European Union, spread across the country. These can be segregated into Control Type I Free Zones which include the Free Port of Bremerhaven and Free Port of Cuxhaven and Control Type II Free Zone which includes the Free Port of Duisburg.
• In the Control Type I Free Zone, businesses do not need to declare the products. In fact, the customs office checks these products on entry and exit from the Zone.
• In the Control Type II Free Zone, companies would need to declare the products to take advantage of the incentives offered by the authorities in these regions. These products are not checked upon entry and exit from the Zone by the customs office.

Free Port of Bremerhaven (Freihafen Bremerhaven)

• Spread across 4 million square meters of the territory of Germany, this Port is located in Bremerhaven, in the northwest of Germany.
• Separated from the customs area by a fence, this Port is governed by the Customs Office of Bremerhaven, a division of the Main Customs Office of Bremen (Hauptzollamt Bremen).
• With a well-developed infrastructure, namely, a 1 million square meters of cargo handling region, this Port can handle large shipments quickly.
• With the customs office overseeing it from multiple checkpoints, not only are the goods cleared quickly and efficiently, but also companies are guaranteed security through the privacy policy.
• Companies from the following sectors can be set up here:
  • Storage
  • Trading
  • Logistics
  • Services
  • Shipping
  • Commercial
  • Others

Free Port of Cuxhaven (Freihafen Cuxhaven)

• Spread across approximately 263 thousand square meters, the Free Port of Cuxhaven has been established in Saxony since 1896.
• Like the Free Port of Bremerhaven, the Free Port of Cuxhaven is separated from the rest of the customs area by a fence.
• It is governed by the Customs Office of Cuxhaven, a division of the Main Customs Office of Oldenburg (Hauptzollamt Oldenburg).
• Companies from the following industries can be set up here:
  • Storage
  • Trading
  • Fishing
  • Logistics
  • Commercial
  • Services
  • Others

Free Port of Duisburg (Freihafen Duisburg)

• Established in 1990, the Free Port of Duisburg is spread across 120,000 square meters of German territory.
• Located in Ruhrort in Duisburg, it is the first inland FTZ in Germany and the largest inland port in all of Europe.
• It is governed by the Customs Office of Ruhrort, a division of the Customs Office of Duisburg (Hauptzollamt Duisburg).
• The Free Port of Duisburg has various docks along the river, Rhine. Hence, it serves as the connecting point of water, road, and railway traffic.
• Besides, it also has various cargo handling areas, allowing clients to transport goods quickly and efficiently.
• Companies from the following industries can be established in this region:
  • Storage
  • Trading
  • Logistics
  • Shipping
  • Services
  • Commercial
  • Others

Why should you set up a company in Germany Free Trade Zones?

• In Germany, both locals and foreigners can establish their businesses in the Free Trade Zone Germany and are subjected to equal treatment. This implies that foreigners can have complete ownership of their company.
• A company in the FTZs of Germany will not be subjected to any Value Added Tax or duty on their products.
• Companies established in the Free Trade Zone Germany will also not be subjected to any import duties. Therefore, any products stored in these regions are not required to declare their imports. However, if these products are to be taken from the FTZs to elsewhere, export declarations must be filed.
• The FTZs in Germany have a well-developed infrastructure and resources that businesses can take advantage of.
• Besides, in these free trade areas, there is a large and highly skilled labour force that is relatively inexpensive.
• The Free Trade Zone Germany are strategically located near ports and airports, allowing them to remain connected to global markets.
• The government policy and regulations are flexible and business-friendly.
• There is no capital control imposed on companies in Germany, allowing for an easy and smooth transfer of funds worldwide.
• The government motivates businesses to set up these FTZs with various aids, grants, and interest-reduced loans.
• Germany has an extensive network of tax treaties with partner nations, thus, you would not have to pay taxes twice.

How to set up your business in Germany Free Trade Zones?

Now that you have some information about Free Trade Zone Germany, you need to understand how you can set up your business in Germany.