There are still many people and businessmen who do not understand what these areas are capable of doing and their benefits, so to understand what is behind the free zones vs. common regime and the tax advantages it is necessary to clarify what it is all about.
Imagine that a free zone is like the economic playing field, where the rules are a little different. It's like building a stadium where companies play a game of trade with tax and customs advantages instead of standard rules. It is as if the companies are the players, and the free trade zone provides them with a special playing field, where the "economic game" becomes more exciting and beneficial for all participants.
You are ready for this economic kickoff ! To continue analyzing free zones vs. common regime and tax advantages, it is necessary - in the comparison with a huge stadium - to add that organizations enjoy the VIP areas of the stadium, since free zones are like those sites and are strategically designed to offer a unique scenario, where the rules of the game are adjusted in a special way, creating an environment conducive to the flourishing of trade and investment.
Just as the construction of a stadium boosts excitement and activity around sports, a free trade zone encourages economic activity by providing a space where companies operate with tax and customs benefits.
Organizations are star players, and the free trade zone provides them with a privileged scenario where they can showcase their skills and business strategies more effectively, giving an overview of what we can expect in an analysis between free trade zones vs. common regime and tax advantages.
Just as a stadium becomes the epicenter of sporting excitement, a free zone is an economic hub, attracting companies and investors seeking to take advantage of the unique benefits and opportunities it offers. Both the construction of a stadium and the review of free zones vs. common regime and tax advantages, is that it seeks to generate environments where economic activities flourish, generating benefits for both participants and the surrounding community.
Welcome to the economic arena, where the game is played with unique and exciting rules in free trade zones!
Why are they a driver of the economy? According to the Free Trade Zones Association of the Americas (AZFA), "in LATAM they have existed since 1923, Uruguay being the country with the oldest regime in the region. Today, most of the countries have the instrument and every day their legislations are updated to guarantee their competitiveness".
In their report, they emphasize that in Colombia they began in 1958, to date we are the fifth country in the region with more areas of this type, in all the free zones of the region there are about 11 thousand companies established. To measure the importance in the economy, it is important to highlight what they contribute to the GDP of some nations:
Source: AZFA
Free trade zones vs. common regime and tax advantages in Colombia
Being a diverse and constantly growing country, entrepreneurs are offered different options to establish and operate their businesses. Two of the most prominent options are the Free Trade Zones and the Common Regime. Below, we will explore the opportunities behind Free Trade Zones vs. Common Regime and the tax advantages.
Attractive tax incentives
One of the main advantages of setting up in a Free Trade Zone in Colombia is the set of tax incentives it offers. Companies that set up there enjoy exemptions and significant reductions in taxes such as income tax, VAT, and customs duties.
These tax benefits stimulate foreign investment and promote competitiveness and sustainable business growth, increasing interest in free zones vs. common regime and tax advantages.
International trade facilitation
Free trade zones act as gateways to international trade, facilitating the import and export of goods and services. With simplified customs processes and greater agility in logistics management, the companies that operate there take full advantage of global trade opportunities, positioning themselves strategically in the international market.
Infrastructure and technology development
They promote the development of modern and technological infrastructures, which directly benefits companies setting up in these areas. With access to world-class facilities, improving their operational efficiency and adopting cutting-edge technologies to stay competitive in an increasingly dynamic business environment, how can you refuse to see the benefits behind free zones vs. common regime and tax advantages?
Flexibility in personnel management
The labor regime in the Free Trade Zones offers flexibility to companies in the hiring and management of personnel. This translates into greater agility to adapt to market needs and optimize the labor force according to the specific requirements of each company.
Promotion of foreign investment
Colombia, by offering a favorable environment for foreign investment through Free Trade Zones, strengthens its position in the global economy. The attraction of international investments contributes to the economic development of the country, generating employment, technology and knowledge transfer, and stimulating competitiveness in various sectors, in addition to tax advantages.
Legal stability and security:
Free Zone companies enjoy a stable and predictable legal environment. The specific legislation that regulates Free Trade Zones provides a clear legal framework, which provides security and certainty to investors. This stability contributes to building long-term relationships and making strategic decisions with greater confidence.
Research and Development (R&D)
They generate investment in research and development activities by offering incentives and benefits for companies seeking to innovate and improve their processes. This boosts creativity and competitiveness, allowing them to remain at the forefront in terms of technology and products.
Access to qualified human resources
Strategically located in areas with access to quality education, they facilitate the recruitment of highly qualified personnel. Some generate partnerships for collaboration with academic institutions, promoting the development of specialized skills.
Facilities for the service sector
In addition to the advantages for manufacturing, it opens the door to significant benefits for service sector companies such as technology centers and shared services, which can take advantage of Free Trade Zones to optimize costs and improve their operational efficiency.
Sustainability and social responsibility
Implementing sustainable and socially responsible business policies and practices is a commitment to the sustainable development of the country and is a differentiating factor for companies seeking to stand out in the global market, where sustainability plays an increasingly important role.
Considering all these advantages, Free Trade Zones in Colombia are presented as a comprehensive option for companies seeking an environment conducive to investment, growth and innovation in today's dynamic economic landscape.
This offers an attractive framework to maximize their tax benefits, access international trade efficiently and take advantage of the boost in infrastructural and technological development. Although the Common Regime has its own advantages, Free Trade Zones stand out as a strategic option for those companies seeking a dynamic and favorable business environment for their growth.
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