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Free Trade Zones

Last Updated: Jan 20, 2012

free trade zones
 - Costa Rica

Costa Rican Free Trade Zones (FTZ), known in Spanish as "zonas francas," offer member companies a wide range of financial incentives and benefits. FTZs are open to export manufacturing companies, export trade companies (not producers), export service companies, organizations engaged in scientific research, or manufacturing firms with no export requirements.

The Free Zone Regime Law, Number 7210, governs the operations of all companies that operate within the Free Trade Zone Regime (FTZR). FTZR incentives are subject to limitations regarding length and type of benefits, which are not permanent, as their main purpose is to encourage new investment and not to give FTZ companies unlimited advantages over non-FTZ companies.

To qualify for FTZ benefits, a company must be categorized into one of the groups established by free trade zone law, which extend to the handling, processing, manufacture, production, repair and maintenance of goods, as well as services for exportation or re-exportation. Within the Central Valley Greater Metropolitan Area, a minimum $150,000 initial investment is required; outside of this area, $100,000 is the minimum required investment. The minimum required investment must be disbursed within three years of a company's approval for FTZ benefits.

Companies under the FTZR enjoy many benefits, most related to tax incentives. All FTZ companies enjoy 100% exemption for import and export duties, excise taxes, and remittances repatriation tax. Other financial incentives are granted according to a company's individual circumstances. For example, manufacturing companies that export more than 75% of their production are granted 100% exemption on corporate income tax for a period of 8 years, and 50% exemption during the following 4 years.

Other incentives for free trade zone companies include employee training assistance in conjunction with the Instituto Nacional de Apredizaje (National Learning Institute, or INA). Assistance is also offered regarding employee hiring, determining employee housing and educational needs, and advice regarding ongoing legal requirements for FTZ companies.

FTZR Main Requirements:

Manufacturing Firms Under Law 7210

Under Law 7120
Minimum export level 75%
Belong to a strategic sector Not required
Minimum employment level Not required
Minimum required investment $150,000 in fixed assets within FZ Park or $2,000,000 outside FZ Park

Manufacturing Firms Under Law 8794

Main Requirements Small/Mid-scale Projects Large-scale Projects
Minimum export level Not required Not required
Belong to a strategic sector Yes Yes
Minimum employment level Not required Not required
Minimum required investment $150,000 in fixed assets within FZ Park or $2,000,000 outside FZ Park

$10,000,000 investment in fixed assets (land is not included) to be completed in 8 years


Free Trade Zone Regime Main Incentives:

Income Tax Incentives Period of Time Law 7120 Law 8794: Small/Mid-scale Projects Law 8794: Large-scale Projects

Income Tax (Statutory income tax =30%)

4 years 15% 15% 15%

Income Tax (Statutory income tax =30%)

8 years 0% 6% 0%
Income Tax Credit No limit Not available 10% 10%
Income Tax Deferral No limit Not available Not available Up to 10 years
Other Incentives Period of Time Law 7120 Law 8794: Small/Mid-scale Projects Law 8794: Large-scale Projects

Import Duties

No limit 100% exemption 100% exemption 100% exemption

import and Excise Taxes

No limit 100% exemption 100% exemption 100% exemption
Remittances Repatriation Tax No limit 100% exemption 100% exemption 100% exemption


Costa Rican Free Trade Zones:

  • Almacenes Atalanta
    P.I.Z.F. Atalanta, San Jose

    BATCCA Park
    Llorente, Heredia

    Centro de Ciencia y Tecnologia Ultrapark
    Ulloa, Heredia

    Conair Costa Rica
    Turrialba, Cartago

    Corporacion de Inversion Desarrollo BES
    El Coyol, Alajuela

    Diursa Inmobiliaria de Costa Rica
    Europlaza Diursa, Barreal de Heredia

    FTZ Coca Cola Park
    La Uruca, San Jose

    Inmobiliaria Oslo
    Guadalupe, San Jose

    Intel Free Trade Zone Park
    La Ribera de Belen, Heredia

    Inversiones Zeta-Cartago
    Cartago

    Inversiones Zeta-La Valencia
    La Valencia, Heredia

    Inversiones Zeta-Montecillos
    Montecillos, Alajuela

    Los Arallanes
    San Francisco, Heredia

    Parque Biotecnologico
    Golfito

    Parque Global
    La Aurora, Heredia

    Parque Industrial y de Servicios Coyol
    San Jose de Alajuela

    Parque Industrial Zona Franca Alajuela
    Alajuela

    Saphill
    P.I.Z.F. Saphill

    Ultrapark L.A.G.
    Heredia

    Zona Franca Metropolitana
    El Barreal, Heredia

    Zona Franca Puntarenas
    Puntarenas

Source: CINDE and PROCOMER

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