During years 2019 and 2020, several Executive Decrees were published in the Official Government Journal “La Gaceta”, to amend the Free Trade Zone Regime Law and its Regulations, to ensure the compliance with the international standards and criteria established by the Organization for Economic Cooperation and Development (OECD) in the Inclusive Framework on Base Erosion and Profit Shifting to combat tax avoidance by multinational enterprises.

In general terms, these amendments change the applicable rules for service companies under the Free Trade Zone Regime in Costa Rica, as new requirements were implemented to qualify for a Free Trade Zone License, which include but are not limited to:

• The company’s activity shall belong to at least one of the strategic sectors defined by the Law.
• The compliance with the Strategic Eligibility Index for services’ companies.
• The company shall be partially or totally exempted from Income Tax or not subject to such tax.

Further, service companies can now sell to the local market without any limitation following the applicable rules.

Let our experienced Costa Rican attorneys guide you through these changes when applying to the Free Trade Zone Regime.