Preguntas Frecuentes

1. What kind of companies can join a Free Trade Zone (FTZ) and why?

In the FTZ there is only a restriction on the financial sector and the exploration, exploitation and extraction of non-renewable natural resources (except offshore in the oil sector). All other companies can join the FTZ. Dependant on the companies total assets the agreement can be between zero employees (companies with less assets than $114,000 USD) to 150 employees. Investment can be zero for SMEs and up to $250,000,000 USD for big companies.

The sectors that have joined the FTZ include high level health institutions, biofuel plants, data and call centres, refineries, assembly plants and food producers. The industrial sectors have the largest participation with 55, service sector with 33 and industrial agriculture with 13.

2. What procedure needs to be followed to access the FTZ?

It is very easy. If there is an industrial project, then initially you have to create a new company, defining the activities you are going to do in the FTZ. The FTZ must have available space for you and you have to describe, in a project, the viability and feasibility with regard to technical, economic and marketing aspects. Additionally you must establish the level of agreements with regard to investment and employment that your project will generate. When complete you must request qualification from the Operator User; your request must include all the documents required by the Colombian Customs laws.

The Operator User will analyse the request and project; if it complies with the law you will receive the user qualification and join the FTZ. From this moment the new company has access to all the benefits.

3. What are the key factors that the FTZ attractive?
  • Geographical location
  • Favourable regulatory framework
  • Tax, customs and foreign commerce special regime
  • Lawful stability
  • Access to markets
  • Customs facilities
  • Operational infrastructure
  • Facility to have operational productive chains
  • Access to technology
  • Specialist workforce available
4. What competitive advantages does a company have by being in a FTZ?
  • Generation of a productive chain with others in the FTZ, taking advantage of the regime incentives and reducing production costs by 56%
  • World class competitive infrastructure, at reasonable cost, through the exploitation of the tax and customs benefits
  • The products manufactured in the FTZ have preferential access to the countries with agreements, meaning no restrictions to a market of 1,500 million consumers
  • The ability to have partial nationalisations in the same document, allowing to pay custom taxes at the time of supply, meaning reduction in financial cost and improved cash flow
  • It is viable to do part of the productive in the national territory through ´partial processes´ without losing the benefits of the FTZ
  • Pay custom taxes only on goods taken away from the FTZ
  • Operational 24/7, information systems to manage inventories, merchandise and vehicle access and exit control, reduction in lost and improved traceability of the operations.
5. How does the FTZ contribute to the development and growth of the Colombian economy?

The FTZs promote the creation of new industries because one of the requirements to set up in a FTZ is to be a new company. Studies done by the DNP and economic experts show that for each peso that the government sacrifice through loss of income tax they collect 2 pesos, when all the national and local taxes are included the ratio is 3:1.

The FTZ generates permanent and formal employment resulting in better wages and quality of life for the workers and their families.

This new investment generates development in the regions. There are FTZs in more than 20 Departments, stimulating growth in new companies, generating long-term industrial platforms. Also the FTZs contribute about 14% of national exports (excluding mining) and a growing trend of 28.5%

6. What is the reason for the boom of the FTZ regimes in the country?

The FTZ is the only instrument the country has to attract investment and increase competitiveness. The Law 1004 of 2005 defined the objectives of the FTZ: attract investment and generate employment more than the promotion of foreign commerce. Actually the FTZ is a model of development in the country, they encourage new investment, not only in the manufacturing sector but also in others such as global services and industrial agriculture. Now we have FTZs in industrial, oil, dairy, biofuel, health, mining, ports and others.

On average, over the last 10 years, investment in the FTZs has been around 3.6 billion pesos per year. From 10 FTZs there are now 101 declared FTZs (40 multi-company or permanent and 61 one-company or special), they have generated 60,000 direct employment and 170,000 indirect.

The national government, through Procolombia, has supported the promotion of FTZs by foreign trips looking for new investment. Thanks to this they have generated important projects for the country, more the $2,000 million USD coming from countries like India, Canada, Argentina, USA, Brazil, Spain and Guatemala.