Tax Benefits for Companies in Special Zones

The regulation for Special Public Economic Development Zones, which came into effect in Guatemala on February 4, establishes fiscal incentives for companies operating under this scheme.

Tuesday, February 5, 2019

Among the tax benefits provided by the Law on Special Public Economic Development Zones (ZDEEP), include the exemption for 10 years of 100% of income tax, as well as the temporary suspension of taxes associated with imports.

You may be interested in "Free Trade Zones at risk?"

According to the ZDEEP regulations, the companies that may be eligible under this format are those engaged in production, manufacturing, transformation, assembly, marketing, distribution, storage, conservation, fractionating, repackaging, packaging, handling, classification, cleaning and any other operation of goods owned or imported and exported.

For companies to be qualified as ZDEEP, they must submit to the Board of Directors of the Free Zone of Industry and Commerce Santo Tomas de Castilla (Zolic) a project that demonstrates the economic, social and productive impact that they will generate in the territory in which they plan install.

Fredy Leonel Palma, general manager of the Board of Directors of the Free Zone of Industry and Commerce Santo Tomás de Castilla Zolic, told Dca.gob.gt that "... 'With this regulation, we are encouraging new companies to operate in Any part of the national territory, because the main objective is the generation of employment. "Currently there are 16 companies from different productive sectors interested in being qualified as ZDEEP and start operating in Quetzaltenango, Escuintla and San Marcos."

See also "Free zones: reforms stagnate"

Fanny D. Estrada, Director of Interinstitutional Relations of the Guatemalan Association of Exporters, explained that it is "... positive that Zolic is authorized to install free zones throughout the country, because reforms to Decree 65-89, of 2016, drove away the investment and generated that approximately 100 companies left the country. 'Hopefully in the short term this regulation can be operationalized, to give legal certainty to investors, and that in the middle Guatemala has a new law of free zones'."

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More on this topic

Second Economic Development Zone Approved

October 2019

The second project was authorized in Guatemala to install a Special Public Economic Development Zone, which will require an initial investment of $16 million and will be located in Pajapita, department of San Marcos.

"Puerta del Istmo" is the name of the industrial park, which will be on a 160-hectare site and will house industrial and logistics companies.

Economic Development Zones: Projects Move Forward

July 2019

Puerta del Istmo, Centro Logístico Quetzal and ZDEEP Piedras Negras, are the projects advancing in Guatemala in the process of becoming Zones of Special Public Economic Development.

After the Santo Tomás de Castilla Free Trade and Industry Zone (Zolic) approved in April the first Special Public Economic Development Zone (ZDEEP) called "Michatoya Pacifico", which is on the Puerto Quetzal, Escuintla Highway, there are three other projects that have begun the process to establish.

Regulations for Collection in Development Areas

July 2019

In Guatemala, the regulations governing the tariffs to be applied to users, administrators and economic zones have come into force as part of the new legislation on Special Public Economic Development Zones.

The tariffs that will be applied according to the categories established in the regulation, published in the Diario de Centroamérica on June 28th, were effective.

Incentives That Work

March 2019

In Guatemala, five private projects to build economic development zones are already in the process of being processed, only two months after the regulation defining the fiscal benefits to develop them came into force.

On February 4, the Law on Special Public Economic Development Zones (ZDEEP) came into effect, which provides for tax benefits consisting of a 10-year exemption from 100% income tax, as well as the temporary suspension of taxes associated with imports, among others.

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