Colombia simplifies normativity in free trade zones regime



There are 52 changes to be considered in the new resolution – seven refer to Decree 2685 of 1999 and the rest refer to regulation 2147 of 2016 previously in force 



In order to facilitate and strengthen the use of free trade zones as an instrument to attract national and foreign investment to different sectors of the economy, the Ministerio de Comercio Industria y Turismo (MinCit) recently issued Decree 659 of 2018 which modified the existing regulation for this regime.


There are 52 changes to be considered in the new resolution – seven refer to Decree 2685 of 1999 and the rest refer to regulation 2147 of 2016 previously in force -, that seek to simplify formalities in free trade zones, as well as to harmonize foreign trade operations with the ones established in the customs status.


“With this new Decree we want to promote a simpler access to the regime, in less time and clear rules for free trade zones users, investors and government officials in charge of customs formalities”, stated Edith Zapata, advisor to the Director of Productivity and Competitiveness of MinCit, during a forum organized by the  Cámara de Comercio Colombo Americana, AmCham Colombia.


Main changes


While Decree 659 fixes different gaps that past resolutions had left, a 50% of the rule will govern until the end of 2019 when the National Directorate of Taxes and Customs (DIAN) puts its computer systematization model in operation.  Among the changes that went into effect since May 2 this year, the following can be highlighted:


  • It is clarified that industrial processes may also apply for services


  • Industrial users may import spare pieces or replacements to offer a better after-sale service of the goods produced, manufactured or transformed inside the free trade zone.


  • Now, users will not have to wait a month in order to postulate a substitute for a new operator user.


  • The total transfer of users between free trade zones does not require investment or employment commitments.


  • The cabotage regime is abolished for small deliveries, permitting them to leave the country under postal traffic export by express shipments.


  • The partial processes for making technical tests are widened.


  • Not only machines or equipment can be repaired, revised and maintained, but also capital assets, tools, raw materials, pieces and spares.


  • The free trade zones of the healthcare sector allow equipment and medical devices for postoperative treatments to leave the country.


New business opportunities


According to Diego Gaitán, manager of  Desarrolladora de Zonas Francas del Grupo ZFB, in the country there are five million hectares available for the agricultural industry development, which represents a great opportunity for free trade zones with agricultural activity.  “On the industrial level, a business possibility is the production of sauce and canning, semi-processed fruit and even cannabis, which although it is considered a menace for the economy, it may have a good development potential.  At the moment there are more than 30 projects related to this plant analyzing the possibility of  moving to the free trade regime.


Regarding the healthcare industry, the new regime allows to do any legal business within the 20% of the constructed area and that can be used as doctors’ offices or commercial premises destined for providing medical services.


Other project to come, and that can be exploited from this regime is Bogota´s metro system, because it will require of big logistics to import equipment, technology and high value items.  “Only to store the spares stock for Transmilenio there is a six thousand m² area in Bogota´s Free Trade Zone (ZFB);  The metro would represent an even bigger opportunity not only for storage matters but also for equipment assembly”, explains Gaitán.


Service and technology sectors also have important benefits within free trade zones.  According to Gaitán, there are 32 service companies installed in ZFB (BPO, KPO, ITO, data centers, shared service centers), which have generated around 13,300 direct jobs and that enjoy different incentives, such as  lower fees in income taxes, ICA, property taxation and labor taxes, among others.


Regarding penalties, Juan David Barbosa, partner of the customs and foreign trade area at Posse Herrera, warned that even without going into effect the new sanctioning regime, an industrial user or goods and services was fined because the 95% of its activity did not meet the corporate purpose.  “It’s essential for users to consider that from now on the DIAN will be able to audit their financial statements, and in cases like this, can impose sanctions for 400 UVT (Tax Value Units)”.