The Free Trade Zone Regime In Costa Rica

The Free Trade Zone Regime consists of a set of incentives and benefits offered by the Costa Rican government to national and/or foreign companies that make new investments in the country. It is a special customs regime in which companies obtain the status of auxiliary to the public customs function.

Companies making new investments in the country can engage in handling, processing, manufacturing, production, repair, and maintenance of goods, as well as provision of services intended for export or re-export, in accordance with the special legislation of the regime. These companies can be classified as: trading companies, service providers, park administrators, those engaged in research, construction, repair or maintenance of vessels, manufacturing, human health centers, providers and/or sustainable adventure parks.

Beneficiary companies can be located inside or outside the metropolitan area, within or outside an industrial park, which determines the type of initial new investment in fixed assets they must make and the tax payment benefit on profits they receive. For example, companies within the metropolitan area and inside a park must invest $150,000.00; outside a park $2,000,000.00. Companies located outside the metropolitan area and inside a park must invest $100,000.00; outside a park $250,000.00. However, an exception applies to manufacturing companies as mega-projects, human health companies, and sustainable adventure parks, whose initial new investment must exceed $5,000,000.00.

Additionally, companies commit to generating employment according to their activity and maintaining a minimum number of employees on their payroll, duly reported to social security, among other requirements.

However, what draws the most attention in this regime are the benefits granted to investing companies, such as:
– Exemption from import duties on goods necessary for the operation and administration of the authorized activity.
– Exemption from import duties on vehicles with specific characteristics.
– Exemption from taxes on local purchases, goods, or services.
– Exemption from export duties.
– Exemption for a period of 10 years from taxes on: Real estate transfers and Municipal patents.
– Exemption from remittance taxes.
– Exemption from profit taxes, based on their classification and location. For example, a service company located within the metropolitan area can obtain exemption from such taxes for the first 8 years of operation, pay 15% from year 9 to 12, and pay the full rate of 30% thereafter.

The benefits granted to companies, as well as their obligations as beneficiaries of the free trade zone regime, are outlined in an operations contract where both parties ratify their agreement.

We trust this information will prove highly beneficial to you.

Alejandra Arguedas M.
aam@quatro.legal
Free Trade Regime Director

Disclaimer: The information provided in this blog post is for general informational purposes only and is not intended to constitute legal advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change. For the most accurate and up-to-date information, please contact our office directly. Some images may be AI generated.