The free trade zone regime is the most successful investment model for new projects in the country, as all types of industrial goods and services can be carried out within them with tax and customs benefits.
The pharmaceutical sector, specifically, has significant potential under this regime, due to the advantages it offers to companies' cash flow and the flexibility it offers in import and export processes.
Much has been said in recent weeks about the changes 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 extensive, as it allows for the production of all kinds of inputs and medications, including those associated with medicinal cannabis derivatives; the provision of pharmaceutical manufacturing services to national or international companies; and the provision of logistics services for inventory management, packaging, repackaging, and labeling for clinics, hospitals, and healthcare providers, among others.
Companies producing goods for this sector can achieve significant cash flow savings, as inputs purchased locally or imported from the rest of the world can be acquired without VAT. Since a large proportion of final goods are exempt from VAT, either by their nature or because they are exported, there would be virtually no outlay of this tax.
In the case of logistics services for companies in the sector, the fact that goods imported 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 nationalizations can provide cash flow to allocate those resources to other company needs.
In short, the flexibility of the free trade zone regime allows for added value to be generated for the activities carried out in this important sector of the economy.
Taken from: AMCHAM Colombia