Costa Rica: Free zones request better fiscal incentives

The companies are asking for reforms to the Law of Incentives that would allow a reduction in income tax starting 2015.

Wednesday, January 28, 2009

Nacion.com reports on its website: "Timothy Scott, director of the Association of Free Zone Companies (Azofras), explained that the companies are asking that the new tariff that will come into effect in 2015 be "one digit" (less than 10%).

"This will allow us to continue to be attractive and compete with countries such as Malaysia, where the tax is 10%," Scott recommended."

More on this topic

Free Trade Zones in Costa Rica: 5% Tax

April 2009

With the reform to the Law on Free Zones, the country is adapting its legislation to WTO rules.

On Tuesday, the Executive Branch presented draft amendments of the Law on the Free Trade Zone Regimen (7210), which amends five items in the current law, to the Legislative Assembly.

Costa Rica will give priority to reforming free zones

January 2009

During the first quarter, the Ministry of Foreign Trade (Comex) will send the bill to the Assembly in hopes of getting it passed during the first quarter of the year.

According to nacion.com, "the objective is to guarantee that companies remain in the country, to encourage them to reinvest and to have a clear legal framework to attract new companies.

Costa Rica Free Zones suffer from recession in the US

December 2008

The economic crisis in the United States has caused the growth rate for exports from the free zones to fall to just 1.4% this last year.

US companies have reduced their purchases of good made in Costa Rica and hence, the sector has grown by only 1.4% since October 2007 to October 2008.

Costa Rica's Free Zones require definition of the system

November 2008

There is concern about the incentives to be received after 2015 when benefits expire according to World Commerce Organization provisions.

The Government wants to ensure these conditions through a reform of the free zone law aimed at attracting investment.

However, its early yet and the possibility of taking it to Congress for a vote seems far off.

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