European Medieval Factories
Although European colonialism traces its roots to ancient Carthage - a trading settlement of Phoenician colonists - and almost every major city of the world once started as a trading post (Venice, Naples, Rotterdam, New York, Shanghai, Lisbon, etc.), "factories" were a unique institution born in medieval Europe.
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Originally, factories were organizations of European merchants from a state, meeting in a foreign place. These organizations sought to defend their common interests, mainly economic (as well as organized insurance and protection), enabling the maintenance of diplomatic and trade relations within the foreign state where they were set.
The factories were established from 1356 onwards in the main trading centers, usually ports or central hubs that have prospered under the influence of the Hanseatic League and its guilds and kontors. The Hanseatic cities had their own law system and furnished their own protection and mutual aid. The Hanseatic League maintained factories among others in England (Boston, King's Lynn), Norway (Tønsberg) and Finland (Åbo). Later, cities like Bruges and Antwerp, actively tried to take over the monopoly of trade from the Hansa, inviting foreign merchants to join in.
Because foreigners were not allowed to buy land in these cities, merchants joined around "factories", like the Portuguese in their Bruges factory: the Factor(s) and his officers rented the housing and warehouses, arbitrated trade and even managed insurance funds, working both as an association and an embassy, even administering justice within the merchant community.
Read more about this topic: Factory (trading Post)
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