August 20, 2021 (Investorideas.com Newswire) In 2021, a new free trade area regime has been decreed in Colombia with significant changes that benefit businesses and foreign investment. Find out about some of the benefits this scheme brings to companies considering doing business in Bogota.
Bogota, August 2021. Bogota continues to consolidate its position as one of the main cities for doing business in Latin America. In addition to its wide range of available human talents, its strategic location and its economic strength, the city offers significant incentives and ideal conditions for the attraction of foreign investment and the development of businesses in the region.
Among these incentives and conditions is the new free zone regime (Decree 278 of 2021), which has significant advantages, as shown below:
Allows remote work
The new free zone regime allows users of industrial services to have 50% of their direct employees work remotely. This, as long as a business establishment or branch is not established outside the free zone and the costs of the remote team do not exceed 30% of the user’s total costs.
This enables decentralization of operations, optimization of infrastructure, reduction of operating costs and, of course, adapts to the new reality and global labor trends.
Reduces office procedures and delays
The 2021 free zone regime reduces the procedures required for declaring a free zone from 57 steps to 24; and, by reducing response times from public entities and applicants, it halved the time required for this declaration, since it took 18 months and currently only 6.
In addition, it unifies to 30 years the duration of the extension of the declaration of permanent free zone and special permanent free zone.
All of the above gives greater stability to the regime and allows companies to consolidate their investments as quickly as possible.
In line with global trends, the new free trade area regime involves electronic commerce. Therefore, users of the free zone can make sales on the Internet, without being considered retail sales under the terms of the National Directorate of Taxes and Customs (DIAN for its acronym in Spanish).
Therefore, sales made from a permanent free zone can enter the national customs territory under the modality of postal traffic and express shipments, provided that these goods do not exceed a value of 2000 USD and a weight of 50 kilograms.
This reduces shipping costs and allows better distribution of goods from the free zone to different cities in Colombia and the region.
Allows the conversion of special permanent free zones for services into permanent free zones
The current regime allows the conversion of special permanent free zones for services into permanent free zones oriented towards the export of scientific, technological and innovation services.
This is particularly relevant for industries such as BPO and medical services, given Bogota’s strong value proposition in terms of human talent and manufacturing capacity for pharmaceuticals and medical devices.
Connects the public and private sectors
Through the Technical Committee of the Free Zone, created as part of the National Competitiveness and Innovation System in July 2021, an official public-private body is set up to involve all stakeholders in a constant dialogue.
This promotes the implementation of the free zones 4.0 model and stimulates investment and productive transformation.
- The new free zone regime (Decree 278 of 2021) has characteristics that promote the attraction of domestic and foreign investment, economic recovery and the promotion of Colombia’s exports.
- More than 960 companies operate in Colombia’s 112 free zones, employing more than 54,000 people.
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