Free zone companies have denounced that lack of regulation for the emerging employment law is preventing them from selling products completed before the law came into force.
As well as the finished and ready to be marketed products there are also raw materials, machinery and other production materials which entered the free zone before the new law was passed and are now in a legal vacuum, because of the absence of regulation to establish the treatment to be given to them in the context of the new legislation.
Among the changes to be made to the draft of the Emerging Law for the Conservation of Employment is the limitation of activities developed in free zones.
The bill which aims to uphold a series of incentives for the productive sector, while the Law on Investment and Employment is being analysed in Congress, will undergo a series of amendments at the request of the tax administration and the Ministry of Finance.
On December 9, Guatemala's eighteenth free zone will open in the municipality of Estanzuela, Zacapa.
The project is the first of six that are currently awaiting administration and approval from the Ministry of Economy and the Tax Authority.
The new industrial site forms part of the Megaplaza commercial project, which will require an initial investment of $120 million, according to Finance Minister Luis Velasquez.
Six new free trade zones will operate in Guatemala, making the total 24 nationwide.
The new zones are located in Guatemala, Villa Nueva, Zacapa, Quetzaltenango, Puerto Quetzal and Tecun Uman, according to Economy Minister Luis Velasquez.
An article in Siglo21.com.gt, reports, "He said that in these areas commercial activities in manufacturing, industry and services will be developed.
If proposed reforms are approved, the country should find it easier to attract foreign investment.
The reform to the Free Trade Zone law is expected to be approved by the end of the year, stated congressman Mariano Rayo.
"This initiative seeks to create conditions favorable to encouraging investment. 'The export sector has been participating alongside other organizations in dialogue sessions with congress to develop this innovative and future looking proposal,' commented the director of the Guatemalan Exporters Association (AGEXPORT), Fanny D. Estrada", reports Sigloxxi.com.
The Free Zone Association is putting pressure on Congress to pass the bill that will regulate the sector’s activities.
This legislation would authorize Free Zone companies to sell their products to Guatemalan companies.
The association also requested the Tax Authority (SAT), to reverse a ruling which prevents them from selling some products inside Guatemala, explained Sigloxxi.com.
The Tax Authority prohibited the sale of products originated at Free Zones within the country’s borders.
The ruling will come into effect on May 1st, and is part of the current Free Zone Law (Article 4).
From Sigloxxi.com: “René Castañeda, president of the Free Zone Association, argued that this measure will cause the State’s Treasury losses in the millions.
The Tax Authority and Free Zone Users are seeking an agreement to regulate the nationalization of goods through free zones.
Current legislation forbids commercial users of Free Zones from exporting goods to Guatemala, so these transactions have been done as re-exports.
“Raúl Díaz, Customs superintendent, met with Free Zones users and agreed to delay until May the coming into effect of a regulation scheduled for March.