In an end-of-the-year agreement, Costa Rican lawmakers approved a new free trade zone reform that offers tax incentives for businesses electing to set up operations in regions outside the CentralValley, among a host of other reforms.
Delicate Operations: Boston Scientific workers use skill and precision in the production of medical devices. The company this year inaugurated its secondplant in Costa Rica at Propark Free Zone in Coyol, Alajuela, northwest of San José.
Ronald Reyes | Tico Times
Currently, most of the 247 companies in Costa Rica's international free trade zones –known as zonas francas in Spanish – are in the San José area and in Heredia and Alajuela, north and northwest of the capital city, respectively.
In a free trade zone, businesses normally can importand export goods without barriers such as quotas or tariffs. Countries use them to attract foreign investment, which economists say is critical for developing countries like Costa Rica.
“Theapproved reform establishes a series of attractive fiscal benefits that keep Costa Rica competitive as an investment destination, versus countries that fight among themselves to attract foreign directinvestment,” said Vanessa Gibson, director of the Costa Rican Investment Board (CINDE).
The reform was a topic of contention among lawmakers, particularly for members of the left-leaning CitizenAction Party (PAC) who had lobbied for alterations to the previous law for at least eight months.
At the top of a series of fiscal benefits, businesses that choose to operate in free zones in theCaribbean province of Limón, near the central Pacific port of Puntarenas and the northern Pacific province of Guanacaste will pay less in income taxes during their first six years of operations. Thepercentage of income taxes paid will be determined by the degree of investment made by the company or the number of people employed at the locations.
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