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The issuance of Decree 278 of 2021, which amends Decree
2147 of 2016, improves the competitiveness of free trade
zones.
With this update of the free trade zone regime, the
government aims to position Colombia as an even more
attractive investment destination in the region.
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This decree is based
ON 3 OBJECTIVES:
Productive development: Through the promotion of ambitious entrepreneurial
projects aimed at making the Colombian business sector more sophisticated,
modern, and robust.
It also facilitates insertion into local, regional, and global value chains.
Procedure simplification: There will be fewer requirements and a more
expeditious process for accessing the instrument for the first time, as well as for
requesting an extension of existing free trade zones.
Strengthening the institutional framework: Through the creation of a Free
TradeZoneTechnicalCommitteeaspartoftheNationalSystemofCompetitiveness
and Innovation.
To date, there are
120 DECLARED FREE TRADE ZONES
IN COLOMBIA,
79 41
of which are special
permanent or single
enterprise.
of which are
permanent.
Free Trade Zones 4.0
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INTO THE FREE TRADE
ZONE REGIME
Changes to be incorporated
Free Trade Zones 4.0
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¿WHAT DOES
the Decree change
regarding investments for
declaration purposes?
• As of the issuance of this Decree, intangible
assets will be recognized as part of the
investment commitments (up to 20% of the
new investment).
• In the case of new service projects, investment
commitments may be reduced by 10% if
exports are made.
• The fulfillment of investment commitments
may be accredited from the date of the
declaration application for up to 20%.
• The extension may be granted to other
economic activities in addition to those
originally declared.
¿WHAT’S NEW
in e-Commerce?
Users of goods and services will be able to
make use of e-commerce through postal traffic
and express shipments.1
Online sales made by
free trade zone users shall not be considered
retail sales.
¿ HOW MUCH
are the times and requirements
reduced by?
The investment requirements for the
declaration and extension of free trade zones
are reduced by at least 15.2% (depending on
the productive sector and the type of free
trade zone):
Permanent Free Trade Zone:
• 18.5% reduction compared to current
requirement.
• Proposed investment: 924,224 UVT (tax
value units) (approx. $33,556,724,992 COP or
$9,587,635 USD)
• Reduction compared to previous regime:
$7.47 billion COP
Special Permanent Free Trade Zones
for Goods:
• 18.5% reduction compared to current
requirement.
• Proposed investment: 3,012,550 UVT (tax
value units) (approx. $109,379,665,400 COP
or $31,251,332 USD)
• Reduction compared to previous regime:
$24.402 billion COP
Special Permanent Free Trade Zones
for Services:
• 15.2% reduction compared to current
requirement.
• Proposed investment: between 209,004 and
1,922,898 UVT (tax value units) ($7,588,517,232
COP - $69,816,580,584 COP), depending on
number of jobs (between 150 and 500 direct
jobs)
• Reduction compared to previous regime:
$1.336 billion COP to $12.289 billion COP
Special Permanent Free Trade Zones
for Agribusiness:
• 31.7% reduction compared to current
requirement
• Proposed investment: 1,263,736 UVT (tax
value units) (approx. $45,883,726,688 COP or
$13,109,636 USD)
• Reduction compared to previous regime:
$20.837 billion COP
Special Permanent Free Trade Zones
for Port Services:
• 18.5% reduction compared to current
requirement
• Proposed investment: 924,224 UVT (tax value
units) (approx. COP $33,556,724,992 COP or
$9,587,635 USD)
• Reduction compared to previous regime: $7.47
billion COP
Special Permanent Free Trade Zones
for Pre-Existing Companies:
• 18.5% reduction compared to current
requirement
• Proposed investment: 13,897,853 UVT (tax
value units) (approx. $504,603,246,724 COP or
$144,172,356 USD)
• Reduction compared to previous regime:
$112.578 billion COP
The investment commitment is reduced by up
to 30% for new free trade zone projects located
in municipalities with high levels of poverty and
for requests to extend existing free trade zones
in these areas.
The reductions in investment requirements aim
to encourage free trade zones in areas whose
levels of development have historically fallen
below the national average.
The Multidimensional Poverty Index—calculated
by DANE (National Department of Statistics) for
theyear2018—wasusedtodefinethecategories.
1
Subject to DIAN (National Directorate of Taxes and Customs)
regulations.
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MULTIDIMENSIONAL POVERTY
INDEX (MPI)
% OF INVESTMENT REQUIRED MUNICIPALITIES
MPI less or equal to 19.6% 100% investment 109 municipalities
MPI from 19.6% to 36.3% 90% investment 343 municipalities
MPI from 36.3% to 49.8% 80% investment 335 municipalities
MPI greater than 49.8% 70% investment 335 municipalities
• New permanent FreeTrade Zones dedicated exclusively to the provision of services in municipalities
with less than 1 million inhabitants need not comply with the minimum area requirement of 20
hectares.
In practice, this requirement applies to most of the country, given that only five (5) cities in
Colombia have over one million inhabitants (Bogota, Medellin, Cali, Barranquilla, and
Cartagena).
• It allows for the possibility that special permanent free trade zones for services may become
permanent free trade zones and rate users that provide science, technology, innovation, culture,
and knowledge services among others.
To do this, you must comply with the following:
• Comply with the commitments for the declaration
• Update the master plan, including an internalization plan that aligns
with the purposes of Law 1004
• Create a timeline to demonstrate that you will have at least 5 qualified
service users by the end of the fifth year after authorization
• Equity of 567,008 UVT 2
(tax value units), approximately
$20,586,926,464 COP or $5,881,978 3
USD
• Propose operator user
• No need to show proof of the 20-hectare area
2
For 2021, one (1) UVT (tax value unit) is equivalent to $36,308 COP.
3
Based on a Representative Market Rate of $3,500 COP
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PROCEDURE:
For new declarations, the number of requirements that must be met is reduced
from 57 to 24. 4
The processing time for the declaration of new free trade zones is reduced
from 18 to approximately 6 months.
¿WHAT IS INCLUDED
regarding the expansion of
the regime’s scope?
• It is possible for free trade zones to add areas
not adjacent to the originally declared space,
as long as these areas are located in the same
municipality or in bordering municipalities of
the same customs jurisdiction.
• Existing free zones have the option to request
an extension for the economic activities for
which their declaration was authorized.
• Free trade zone users may request an
extension for the activities for which they were
qualified, without the need to obtain a new
qualification; modifications to the investment
and employment commitments—and to the
terms for fulfilling these commitments—will
be authorized..
Introducing coffee into the free trade zone
from the national customs territory is not
considered an export; this is in orderto promote
transformation processes of a flagship product
under the free trade zone regime.
¿WHAT CHANGES
are included regarding
free trade zones in the
agricultural sector?
It is extended to all sectors involving the
industrial processing of agricultural products,
in accordance with the WTO Agreement on
Agriculture (Chapter 1 to 24 of the Customs
Tariff), including vegetables, cereals, milling
products, seeds, sugar, cocoa, beverages,
tobacco, and cigarettes, among others.
¿WHAT CHANGES
hubo en materia de
Prórrogas?
The maximum term for both permanent and
special permanent free trade zone extensions
is 30 years. This increases the term for special
free trade zones from 15 to 30 years.
4
Eliminates economic and market feasibility studies, availability of public services, certification that the project is in
accordance with the district development plan.
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¿ARE EMPLOYEES
PERMITTED
to work outside the
declared free trade zone
area?
Up to 50% of the employees of the industrial
users of services5
may be authorized to work
outside the area declared a free trade zone.
The costs derived from these activities may
not exceed 30% of the company’s total costs.
STRENGTHENING
the institutional framework
The framework of the National System of
Competitiveness and Innovation (SNCI, as per
its acronym in Spanish) enables the creation
of a Free Trade Zone Technical Committee in
order to promote the free trade zone regime’s
competitiveness vis-à-vis third countries and
strengthen the model’s operation in Colombia,
through ongoing and constructive dialogue
with the business sector.
5
Decree 411 of 2020 is currently in force, which allows employees of all free trade zone users to work outside the free trade
zone area (while the health emergency declared by the Ministry of Health and Social Protection is in force).
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