Factsheet: Master general development of free trade zone plan

Master general development of free trade zone plan

Key Information
Full name of Instrument & Measure (English): 
Free Trade Zone system: Decree 4051-2007 Master general development of the free trade zone plan
Full name of Instrument & Measure (native language): 
Zona Franca Permanente Especial
For the Free Trade Zone system this decree concerns a Master general development of the free trade zone plan. The Free Trade Zone system, contained in Law 1004/05 and regulated by the Decrees 383/2007 and 4051/2007 stipulates that Free Trade Zones are geographical areas defined within the national territory, for the development of industrial goods and services or commercial activities under a special tax, customs and foreign trade regime. Furthermore, Free Trade Zones must serve among others the following purposes: A simplify procedures for the commercialization of goods and services to facilitate its sale. Under this regulation, Free Trade Zones are conceived not only as a mechanism to attract new investments and create jobs, but as an incentive to develop highly productive and competitive industrial processes with a substantial technological innovation component. Additionally, in the case of projects representing a high economic and social impact for the country, a new figure was created, known as a Special Permanent or “Single - Enterprise” Free Trade Zone (SEFTZ). Depending on their characteristics, these Zones are required to implement a higher industrial reconversion or technological transfer or service component than the standard requirements applicable to the Permanent Free Trade Zones. Benefits: • Single 15% income tax rate for industrial users of goods, industrial users of services, and operators, except for commercial users, which are taxed at the general rate. • No custom taxes (VAT and CUSTOMS DUTIES) on merchandise imported from abroad. • VAT exemption for raw materials, inputs and finished goods sold from a national customs territory to industrial users of Free Trade Zones. • VAT exemption on merchandise sales to foreign markets. • Exports made from Free Trade Zones to foreign countries benefit from international trade agreements signed by Colombia. • Goods produced, manufactured, transformed or resulting from any production process developed in a Free Trade Zone are recognized as being “of national origin”. (Only Peru does not recognize the Colombian origin of any goods manufactured in Colombian Free Trade Zones). • Possibility of performing partial processing outside of the Free Trade Zone for up to nine (9) months. • Possibility of selling inside the national territory 100% of the goods or services produced in the Free Trade Zone with customs tariff and VAT payable only on the percentage of inputs imported from third countries.
stimulate economic activities in certain areas


Year Instrument & Measure Started: