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New developments in the Free Trade Zone Regime: Regulations for the implementation of Law 10,234
[/vc_column_text][us_separator][vc_column_text] Mentioning that the free trade zone regime is an instrument of commercial economic policy, composed of a series of incentives, which has proven to be effective in generating employment, productive chains and technology transfer, is no small thing. Law 10,234, called“Law to strengthen territorial competitiveness to promote the attraction of investment outside the Greater Metropolitan Area (GAM)”has recently expanded the range of possibilities for promoting investment under the guise of free trade zones outside the GAM (Mexico City). In recent days, during 2023, the Executive Branch undertook the task of signing nine different decrees with the intention of contributing to the operation and efficiency of this law. Most of them have already been published. It is important to note that this law—and the aforementioned decrees—does not create the possibility of attracting investment outside the GAM (Mexico City), meaning free trade zones, but rather expands benefits and conditions to make establishing investment in these zones even more attractive. The reason for this is that our Law 7,210, “Free Trade Zone Regime Law”Before the enactment of Law 10.234, the legal framework already established the real possibility of bringing investment under the free trade zone scheme to these remote locations, along with their respective requirements and benefits. Law 10.234 expands the scope of these benefits. Among other new features, Law 10.234 creates categories of beneficiaries of the regime, with their respective requirements, commitments, and incentives. New categories include: companies operating human health service centers located outside the GAM; companies located outside the GAM that supply inputs to other companies benefiting from the regime under category f) of Article 17 (i.e., processing companies), located inside or outside the GAM; and companies developing sustainable adventure parks, located outside the GAM, provided they make a new initial investment in fixed assets of at least five million US dollars (US$5,000,000) or its equivalent in local currency. Another aspect this law adds is the definition of what constitutes new investment for these companies operating outside the Metropolitan Area (GAM). New investments may be considered: public infrastructure in which the company invests from the moment it submits its application to the regime for improvement or construction projects, such as: perimeter road access to its location; construction and maintenance of bridges, sewers, and drinking water supply networks; installation and improvement of power, data, and telecommunications transmission lines; aimed at improving infrastructure and social coexistence in the canton where the company benefiting from the regime is established. Likewise, construction, improvement, or maintenance of the infrastructure of educational centers and community care centers located in the canton where the company is established will also be considered new investments. Investments in human capital will also be considered new investments, understood as those related to the company's authorized activity upon entering the regime and aimed at developing and closing gaps; developing new skills for transforming the activity; Research and development, and investments in training for suppliers and providers, or potential human resources to hire. Regarding the decrees issued, we find the regulations for Article 6 of Law 10,234, regarding the benefits and exemptions that employers (companies) covered by the free trade zone regime will have regarding payments to the Social Development and Family Allowance Fund; payments to the Banco Popular y de Desarrollo Comunal (Working Fund); payments to the Mixed Social Assistance Institute (Instituto Mixto de Ayuda Social); and payments and contributions to the National Learning Institute (Instituto Nacional de Aprendizaje). These regulations establish the requirements that beneficiary companies must meet to qualify for these incentives; as well as the obligation of oversight by the Foreign Trade Promotion Agency (PROCOMER) regarding compliance with these requirements; and the role and authority that the Ministry of Foreign Trade will play regarding the suspension of benefits and retroactive collection. Also included within this group of decrees are reforms to the Regulations of the Free Trade Zone Regime Law; Another related to mandatory financing contributions for PROCOMER, directed toward the new categories of beneficiary companies according to Law 10,234; another regarding the guidelines applicable to human health service centers (a new category according to Law 10,234); another on modifications to the rules for granting the free trade zone regime, for granting the Customs Public Function Auxiliary, and for the Inspection Guide for Beneficiary Facilities of the regime; a brief reform to the Regulations of the Single Window for Investment (VUI), as well as new Regulations for the operation and use of the VUI. Likewise, we find regulations regarding the standards for granting the technical viability criterion for sustainable adventure park activities (a new category according to Law 10,234), in which the Costa Rican Tourism Institute and PROCOMER will play an important role. Promoting investment under the free trade zone scheme outside of the GAM can become not only an ally in the fight against unemployment but also a key factor in the fight against climate change. but also an important generator of productive chains in these parts of our country. We will have to wait for the passage of time to bring us, together with the excellent and efficient commitment of our competent authorities in this area, the positive results we all hope for. For any questions, please do not hesitate to contact us at the email addressccartin@lexincorp.com [/vc_column_text][us_separator][vc_column_text]Written by: Lic. Carlos Cartín Feoli [/vc_column_text][/vc_column][/vc_row]
