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Ceuta and Melilla are two small enclaves on the coast of Morocco. Despite seemingly being a part of Morocco, they actually belong to Spain. For a variety of factors, including their pleasant climate, duty-free ports, strong economies, modern facilities, and beneficial tax laws, both are potentially superior retirement havens.

Ceuta is a city and seaport in northwest Africa, located on the Strait of Gibraltar. Bordered by Morocco, the city is an enclave of Spain and is governed as part of Cadiz province in Spain. Ceuta is situated on the site of ancient Abila, which is thought by scholars to be one of the two Pillars of Hercules. Positioned on a headland consisting of seven peaks, the city lies at the end of a narrow isthmus. Its total area is about nine square miles (about 23 square kilometres).

Melilla is located slightly more than 150 nautical miles east of Ceuta and stands on a large cape which extends some 15 miles out from the coast. The area of Melilla is about 4 square miles (about 10 square kilometres). Melilla is administered by the Spanish province of Malaga.

The cities enjoy a mild Mediterranean subtropical climate. Winter is the rainy season while summer tends to be dry.

Ceuta and Melilla have about 80,000 residents each. Close to 80% of the residents are Spanish, with much of the rest being Moroccan. Residents of Indian descent comprise about 1% of the population. Most of the Spanish residents adhere to the Roman Catholic faith while most of the Moroccans are Muslim. Both Spanish and Moroccan are widely spoken, however, Spanish is the predominate language of business and government.

Because both cities have excellent seaports -- though Ceuta's port is built around a natural harbor and is larger than Melilla's -- recreational pleasure craft that ply the Mediterranean call the ports home. Ceuta's port, especially, is often filled with pleasure craft.

Ceuta and Melilla have a long history. Both cities date their original establishment to the Phoenicians, the sailors and merchants of the ancient Mediterranean.

Ceuta later became the site of a Carthaginian settlement, which was taken over eventually by the Romans. In the 5th century the city was captured by the Vandals, who in time lost it to Byzantium. After that the Visigoths, Arabs, Portuguese, and finally the Spanish in 1580 seized control. Since that time, except for a period from 1694 to 1720 when the Moors gained control, the enclave has remained a jurisdiction of Spain.

Melilla's history is quite similar. It, too, was established by the Phoenicians, and subsequently was ruled by the Carthaginians, Romans, Byzantines, and various Berber dynasties until it was conquered by Spain in 1497.

Today, the cities have their own civil governments. Although they are officially considered to be a part of Spanish provinces, they enjoy a somewhat unique status. Each city has one deputy and two senators in the Spanish Parliament. Moreover, the provincial governments provide little actual governmental functions; the local administration of each city largely carries out the tasks of government. Ceuta and Melilla are, in a practical sense, separated from Spain by the Mediterranean Sea but also by their local administrations.

If there is a long-term concern over the stability of Ceuta and Melilla, it is that Morocco would like to negotiate control of the enclaves. However, Spain has little intention of giving up what it considers to be part of its territory and it appears that the status quo will remain.

While Melilla is smaller than Ceuta, and has a smaller port, these enclaves are both modern and prosperous. Because of its smaller size, smaller port, and the fact that its location does not allow it to take advantage of the sea traffic that plies the strait, Melilla is the less cosmopolitan of the two enclaves.

Ceuta, on the other hand, has a fine natural harbor, and its port is far busier than most of the ports of mainland Spain. The enclave's location at the busy strait gives it an advantage most cities envy. In addition, Ceuta is only an hour away from Algeciras, Spain by ferry. Because this is a shorter route than Tangiers, Morocco to Algeciras, Ceuta, for many, provides easier entry to Spain. Also important is Ceuta's designation as a duty-free port of entry for Spain. This designation has led to the proliferation of numerous shops selling countless items. Of course, all this results in a healthy, vigorous economy.

The easy access of each of the enclaves to Spain and the rest of Europe, their pleasant climate, and prosperity make Ceuta and Melilla attractive sites for those considering retirement, as well as those contemplating the establishment of a business.

Ceuta and Melilla both have appealing tax structures. Because the cities are Spanish, Spain's tax system applies, however, the taxes apply at only half the rate one would pay in Spain. Furthermore, residents of the enclaves enjoy the benefits of all Spanish double taxation treaties. It is also noteworthy that the enclaves are duty-free ports, there is no VAT (value added tax), and the cost of maintaining a residence is quite low compared to other retirement havens.

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