Free Trade Zones are essential allies in attracting foreign investment and exporting domestic products to major markets in other countries. Furthermore, they are considered one of the most dynamic platforms for generating jobs—direct and indirect—and attracting new capital investment.
In the wake of the pandemic, free trade zones represent an important instrument for economic recovery. In 2021, a new decree was approved, regulating several modifications aimed at facilitating access procedures, generating greater competitiveness in the sector, and increasing industrial growth, allowing business projects to modernize their production processes, for example.
Thus, continuing its goal of boosting Colombia's economy, Zona Franca de Occidente launched its new User Operator service for its Multi-Company Permanent Free Trade Zones and Special Permanent Free Trade Zones.
"These latter are single-company free zones where a single industrial user establishes a business to develop industrial or service activities, with commitments to investment, job creation, technology transfer, and innovation," explains Rosa Gamarra, manager of the Western Free Trade Zone.
Currently, they have a 13-year history. More than 63 companies from different sectors of the national economy are part of the organization, and they generate more than 11 jobs. "We are a development hub for the country's Western Savannah. Thus, we work every day to provide well-being and employment for families," adds the manager.
WESTERN FREE ZONE
Although many free trade zones are not located in capital or major cities, significant development has been achieved in various regions by having one located within their territories. Today, free trade zones are located in 21 departments in Colombia, and 90% of the companies are MSMEs. Not to mention that, through this regime, significant progress has been made in technology and inputs for the country's business growth," explains Gamarra. Two of the main sectors that have been located in free trade zones are healthcare and food, strategic sectors for the well-being of Colombian families.
Tax reform
However, the management of some free trade zones is concerned about the potential consequences of the tax reform currently being debated in Congress, which proposes a mixed tax regime for companies operating there.
"Tax reform could have a negative impact on companies operating in free trade zones, which have been a focus of investment, innovation, and job creation in Colombia. An increase in income tax, without at least a medium-term transition period, could lead to capital flight, given that we compete with international markets that have a zero-income tax rate," warns the manager of Zona Franca de Occidente.
In his opinion, companies in this sector are among the most closely monitored and supervised by the competent authorities, and they make an investment to join this regime with commitments to job creation, hoping that the conditions under which they entered will be maintained over time. For this reason, he asserts that "there is great fear that the Reform will affect jobs, domestic and foreign investment, the attraction of 4.0 technology and innovation, and the social and economic development of the country."
In this regard, he extended an invitation to the National Government to listen to this sector's proposals regarding the internationalization and reindustrialization of the Colombian economy. "Through joint work with entities such as the Ministry of Commerce, ProColombia, academia, and free trade zone companies, we can design a medium- and long-term strategic plan that will allow Colombian entrepreneurs to prepare to take their products and services abroad as part of an internationalization plan," Gamarra stated.
Article from: PORTFOLIO