With the passing of time, free trade zones have gained relevance for foreign businessmen who want to settle in the country, due to the variety of benefits they bring to companies. Next, we are going to tell you about the main benefits of the free trade zone for businessmen in Colombia. FREE TRADE ZONE The free trade zones for entrepreneurs in Colombia provide to businessmen and how they promote industrial development in the country.
Importance of the Free Trade Zone for Entrepreneurs
The free trade zones in Colombia are of great interest to foreign businessmen because they offer them a safe investment possibility with better import and export conditions for all kinds of products.
At the same time, the economic development of the country benefits from the fact that the installation of these companies implies an increase in employment opportunities.
Benefits of the Free Trade Zone in Colombia
There are a great number of benefits that businessmen acquire when they install their companies in one or several of the free trade zones in the country. free trade zones that exist in the country, some of these are:
Companies that set up in free trade zones are exempt from paying customs duties, including VAT and tariffs for the importation of goods that are introduced into these particular zones.
However, when a product developed in the free trade zone is sold in Colombia, it is considered as an import transaction; therefore, at that moment, these taxes must be paid and the normal import requirements must be complied with. However, advantage is taken of the cash flow generated and the option of nationalizing with the most favorable subheading, serving the local market with competitive products.
Unlike other areas, companies that set up in Colombia's free zones pay a special income tax rate. In addition, they do not pay VAT on purchases and sales of raw materials and inputs.
On the other hand, there are the benefits of foreign trade. In this sense, one of them is that the goods coming from abroad introduced in the Free Trade Zones do not need an import declaration. It is only required that the products appear in the transport document as consigned to the companies located in the Free Trade Zones. In addition, raw materials, inputs and machinery brought into the free trade zones are not considered as imports, so they do not have to pay VAT or duties as long as they remain within these zones.
Other foreign trade benefits are the indefinite time to keep goods within the free trade zone, as well as the possibility of entering raw materials and intermediate goods for partial processing* on a temporary basis, without implying additional costs in imports or customs authorizations.
*Partial processing: to carry out part of the production process in companies located outside the free trade zone.
As we mentioned above, there are many benefits that businessmen can obtain when starting or expanding their companies in a territory catalogued as a free zone, among others:
- A single income tax rate of 20% is paid, while the current rate for companies in Colombia is 35%.
- Access to the possibility of exporting from the free trade zone both to the domestic market and to other countries.
- Sales of international goods between free trade zone companies do not generate VAT tax. This is because, due to the operation of the free zone itself, these are goods that have not entered the country.
- Every company is free to decide whether or not to monetize its foreign currencies. If it decides to do so, it must comply with the regulations determined by the Central Bank.
- Companies located in Free Trade Zones do not need to make a prior clearance of the merchandise, at the same time they do not need to pay customs duties, since being in Free Trade Zone are considered goods that are not customs in Colombia.
- They have the possibility of partially nationalizing raw materials and finished products.
For these and other reasons, free trade zones free trade zones in Colombia have become excellent alternatives to attract investment, generate formal and direct employment, increase municipal tax collection and improve the productive, industrial and commercial development of the region.