Free Trade Zone Costa Rica: A Comprehensive Guide for Investors
Costa Rica’s Free Trade Zone (FTZ) system offers a highly attractive investment environment for businesses, with tax exemptions, streamlined procedures, and global competitiveness. This guide answers the most important questions for those considering the FTZ regime in Costa Rica.
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Understanding the Free Trade Zone Regime in Costa Rica
Costa Rica’s free trade zone regime is a government initiative designed to attract foreign investors by offering businesses tax exemptions and incentives to encourage economic growth. Managed by PROCOMER (Costa Rican Foreign Trade Promoter), this regime provides companies with tax advantages and investment incentives to promote competitiveness.
Applicable to industrial parks, service sectors, and manufacturing companies that meet compliance criteria.
What Are the Benefits of the Free Trade Zone in Costa Rica?
Tax exemptions on importation of raw materials, machinery, and equipment
Reduced or eliminated income tax rates
Exemption from social security contributions for certain operations
No payment of customs duties for the exportation of goods abroad
Streamlined permit and registration processes
Access to industrial parks with modern infrastructure
These tax exemptions help companies lower operational costs and enhance global competitiveness.
How to Establish a Business in a Free Trade Zone in Costa Rica?
Sign Agreements – formalize operation under the free zone regime
Once approved, businesses can immediately begin benefiting from exemptions.
Who Can Benefit from Costa Rica’s Free Trade Zone Regime?
Manufacturing companies that export goods abroad
Technology and software development firms
Logistics and distribution centers
Research and development centers
Service-based industries such as accounting, finance, and BPO
Each entity must meet specific compliance requirements to qualify for the free trade zone regime.
What are the Tax Benefits and Exemptions Available?
Absence of customs duties on imports/exports
Exemption from taxes on remittances
12 year exemption on real estate and municipal licenses
Competitive tax on fees and royalties
Full exemptions on imports necessary for operations
100% income tax exemption for the first 8-year period
Exemptions on domestic purchases of goods and services
Other incentives to support FTZ in Costa Rica
Note: Benefits may vary according to the zone location; outside the GMA offers additional perks.
What Are the Compliance and Regulatory Requirements?
Maintain an initial investment threshold as per law
Ensure business activities comply with local laws
File periodic accounting and fiscal reports
Renew permits and agreements periodically
Failure to comply may result in loss of regime incentives.
How Long Do Free Trade Zone Benefits Last & Why it’s Attractive?
The Costa Rican government provides incentives for an initial period of eight years, extendable up to twelve years for certain industries. Companies must renew periodically to maintain benefits.
Why it’s attractive: Strategic location, skilled bilingual workforce, modern infrastructure, and government-backed legal framework. Ideal hub in Latin America for global trade.
Frequently Asked Questions about Free Trade Zone in Costa Rica
What are the main investment thresholds?
Investment requirements depend on your business sector. PROCOMER typically requests minimum fixed asset investments, number of employees, and annual revenue projections. Requirements vary depending on whether the company is located inside or outside the Greater Metropolitan Area (GMA).
Can I export services from the Free Trade Zone?
Yes. Services such as software development, consulting, call centers, and shared service centers (BPO) can operate within the FTZ and export their services globally, enjoying the same tax exemptions as product exporters.
Are there environmental compliance requirements?
Yes. Companies must comply with Costa Rica’s national environmental laws. This includes obtaining environmental permits (SETENA) depending on the type and size of the operation, particularly for industrial or manufacturing activities.
How long does it take to join the Free Trade Zone Regime?
The approval process through PROCOMER can take between 3 to 6 months, depending on the completeness of your application, investment documentation, and pre-approval steps with other government institutions.
Are there FTZ benefits for small or medium businesses?
Yes. SMEs that export a percentage of their services or goods can benefit from the Free Trade Zone regime, especially if located outside the GMA. The Costa Rican government provides additional incentives for rural and non-metropolitan zones.
Can I own the property where my FTZ company operates?
Yes. You can own or lease the real estate where your company operates. However, FTZ companies must be physically located in authorized industrial parks or designated Free Trade Zone areas approved by PROCOMER.
