New law related to free trade zones

By IDEAS

Costa Rica has expanded its free trade areas beyond its capital, San José, to attract investment and job opportunities for people living in rural areas.

President Carlos Alvarado approved a new law that will assist locations outside of the so-called Greater Metropolitan Area of San José (GMA) through benefits for free trade zones focused on food processing, life sciences, agribusiness and scientific research.
Free trade zones, which offer numerous incentives to employers, have long been a driving force behind the country's exceptional success in attracting foreign businesses that have created thousands of jobs in the San José area.

“The economic development and benefits generated by free trade zones should be expanded outside the greater metropolitan area to multiply job opportunities and well-being for all Costa Ricans. We urgently need to leverage the free trade zone regime to strengthen development poles outside the GMA,” Alvarado said.

The new law exempts companies from paying value-added taxes (VAT) and consumption taxes on purchases of goods and services, as well as income taxes and remittances. They may have no need to pay taxes on capital, patent and land for up to 10 years. They are exempted from municipal tax as well.