Factsheet: Master general development of free trade zone plan

Master general development of free trade zone plan

Key Information
Description: 
For the Free Trade Zone system this decree concerns a Master general development of the free trade zone plan. The Free Trade Zone system, contained in Law 1004/05 and regulated by the Decrees 383/2007 and 4051/2007 stipulates that Free Trade Zones are geographical areas defined within the national territory, for the development of industrial goods and services or commercial activities under a special tax, customs and foreign trade regime. Furthermore, Free Trade Zones must serve among others the following purposes: A simplify procedures for the commercialization of goods and services to facilitate its sale. Under this regulation, Free Trade Zones are conceived not only as a mechanism to attract new investments and create jobs, but as an incentive to develop highly productive and competitive industrial processes with a substantial technological innovation component. Additionally, in the case of projects representing a high economic and social impact for the country, a new figure was created, known as a Special Permanent or “Single - Enterprise” Free Trade Zone (SEFTZ). Depending on their characteristics, these Zones are required to implement a higher industrial reconversion or technological transfer or service component than the standard requirements applicable to the Permanent Free Trade Zones. Benefits: • Single 15% income tax rate for industrial users of goods, industrial users of services, and operators, except for commercial users, which are taxed at the general rate. • No custom taxes (VAT and CUSTOMS DUTIES) on merchandise imported from abroad. • VAT exemption for raw materials, inputs and finished goods sold from a national customs territory to industrial users of Free Trade Zones. • VAT exemption on merchandise sales to foreign markets. • Exports made from Free Trade Zones to foreign countries benefit from international trade agreements signed by Colombia. • Goods produced, manufactured, transformed or resulting from any production process developed in a Free Trade Zone are recognized as being “of national origin”. (Only Peru does not recognize the Colombian origin of any goods manufactured in Colombian Free Trade Zones). • Possibility of performing partial processing outside of the Free Trade Zone for up to nine (9) months. • Possibility of selling inside the national territory 100% of the goods or services produced in the Free Trade Zone with customs tariff and VAT payable only on the percentage of inputs imported from third countries.
Goal/Aim: 
stimulate economic activities in certain areas

Status: