The Free Trade Zone (FTZ) Regime is defined, in Costa Rica, as a set of incentives and benefits granted by the government to companies that comply with certain legal requirements and obligations, mainly related to operating in strategic sectors, investment and employment.
FTZ beneficiaries can be located inside or outside the Greater Metropolitan Area (GMA) and inside or outside FTZ Parks (Park Administrator Companies). Their investment obligations and certain benefits will depend on the location, being the investment requirements more lenient for those situated outside of the GMA and inside a FTZ Park. In addition, operating outside a FTZ Park (whether inside or outside the GMA) requires a larger investment and a more extensive approval process. However, there are certain categories created in 2022 that have very specific requirements, corresponding to points e), f), and g) below.
Companies that can obtain the Free Trade Zone Regime must be included in one or several of the following categories established in the Free Trade Zone Law:
- Trading companies which simply handle (meaning no manufacturing), repackage and/or redistribute goods.
- Services companies within the strategic sectors defined by law and which comply with the Strategic Eligibility Index for Services Companies. Banking, financing and insurance entities cannot be FTZ beneficiaries, nor individuals nor entities providing professional services.
- Park Administrator Companies of business parks destined to host companies under the Free Trade Zone Regime, as long as the parks comply with the infrastructure and provisions of services required by law.
- Manufacturing companies within the strategic sectors defined by law, which can produce, process or assemble goods, whether such goods are exported or not, and shall comply with additional requirements established in article 21 of the FTZ Law. Manufacturing companies which are dedicated to mining extraction, exploration or extraction of hydrocarbons, producing or commercializing any type of weapons and ammunitions containing depleted uranium, or to generating electric energy, unless such energy is for self-consumption, cannot be FTZ beneficiaries.
- Human Health Service Centers that shall be located outside the Greater Metropolitan Area of San Jose and comply with additional requirements established in article 21 of the FTZ Law.
- Supplier/Provider Companies located outside the Greater Metropolitan Area of San Jose that provide/supply materials to other free trade zone manufacturing Companies located inside or outside the Greater Metropolitan Area of San Jose.
- Companies developing sustainable adventure parks, located outside the Greater Metropolitan Area of San Jose, as long as they comply with an initial new investment in fixed assets of at least US$5,000,000.00 or its equivalent in local currency.
The FTZ Regime grants significant tax exemptions on the importation of raw materials, equipment, and materials, value added tax, income tax, municipal taxes, among others.