The free trade zone regime is the most successful investment model for new projects in the country, since all kinds of industrial activities of goods and services can be carried out there with tax and customs benefits.
Specifically, the pharma sector has an important potential under this regime, due to the advantages it offers in the cash flow of companies and the flexibility in the processes of importing and exporting goods.
Much has been said in recent weeks about the modifications to the free trade zone regime in the tax reform, but these are focused on strengthening this instrument as the country's best export platform.
For this important sector of the economy, the possibilities are wide-ranging, as it is possible to produce all kinds of inputs and medicines, including those associated with medicinal cannabis derivatives, provide drug manufacturing services to national or international companies, and provide logistics services for inventory management, packaging, repackaging and labeling for clinics, hospitals and health care companies, among others.
Companies producing goods for this sector can achieve significant savings in cash flow, since the inputs purchased in the local market or entering from the rest of the world can be acquired without VAT and, since a large component of the final goods are exempt from VAT either by their nature or because they are exported, there would be practically no disbursement of this tax.
In the case of logistics services for companies in the sector, the fact that goods entering from the rest of the world can be sent directly from the port or airport to the free trade zone can generate savings in logistics and the possibility of partial nationalization can provide cash flow to use those resources for other company needs.
In short, the flexibility of the free trade zone regime makes it possible to generate added value to the activities carried out in this important sector of the economy.
Taken from: AMCHAM Colombia
