18 September 2018

Costa Rica modifies Free Trade Zone regime regulations to regulate logistic service companies

In Executive Decree No. 41263-COMEX-H (the Decree), effective 10 September 2018, Costa Rica modified the Free Trade Zone (FTZ) regime regulations to establish a new legal and operative framework for FTZ regime beneficiaries that provide logistic services (SEL companies).

SEL companies were initially regulated in 2010 through an amendment to Section 5 of the FTZ regulations. However, the amendment only set out the activities that could be carried out by SEL companies and authorized operations SEL companies may conduct.

The Decree establishes a comprehensive framework, providing legal certainty to these companies. Regulations include the operations SEL companies may conduct, facility requirements, obligations, customs valuation, re-export of merchandise, and commercial invoice equivalents. SEL companies also may sell up to 50% of their services in Costa Rica.

Through this Decree, logistic centers could ease trade for the owners of merchandise by moving goods to different customs territories safely and efficiently. This could allow Costa Rica to consolidate logistic centers in the Central America region.

The Decree is an important development for companies because many companies have wanted to offer logistic services, but the legislation did not provide much guidance.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young, S.A., San José

  • Rafael Sayagues
    rafael.sayagues@cr.ey.com
  • Juan Carlos Chavarria
    juan-carlos.chavarria@cr.ey.com
  • Randall Oquendo
    randall.oquendo@cr.ey.com
  • Laura Coto
    laura.coto@cr.ey.com
  • Alexandre Barbellion
    alexandre.barbellion@cr.ey.com
  • Carolina Palma
    carolina.palma@cr.ey.com

Ernst & Young, LLP, Latin American Business Center, New York

  • Ana Mingramm
    ana.mingramm@ey.com
  • Enrique Perez Grovas
    enrique.perezgrovas@ey.com
  • Pablo Wejcman
    pablo.wejcman@ey.com

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

  • Jose Padilla
    jpadilla@uk.ey.com

Ernst & Young Tax Co., Latin America Tax Desk, Japan & Asia Pacific

  • Raul Moreno, Tokyo
    raul.moreno@jp.ey.com
  • Luis Coronado, Singapore
    luis.coronado@sg.ey.com

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ATTACHMENT

PDF version of this Tax Alert

 

Document ID: 2018-6102