Free Trade Zones (FTZs) are geographic areas established to promote industrial processing of goods and services, primarily to develop exports, although there is no limits on serving the domestic market once the import duties are paid.

There are twelve free trade zones in Colombia: Bogotá, Rionegro (Medellín), Pacific (Cali), La Candelaria (Cartagena), Quindio, Santa Marta, Cúcuta, Barranquilla, Cartagena, Palmaseca (Cali) and Arauca, which is currently under construction. Additionally, the Health Citadel Free Zone, located in the municipality of Sopó near Bogotá, is exclusively dedicated to provide health services.

FTZs are regulated under a special custom, exchange, and fiscal regime. National or foreign judicial entities, legally established in Colombia, may utilize FTZs.

Some benefits offered to investors by the Free Trade Zones, include:

  • Exoneration of income tax related to export earnings of industrial users
  • Exoneration of income tax for operators of the FTZ
  • Tax exemption on remittances and capital repatriation abroad
  • Exoneration of tariffs on imported goods used as inputs for production, as long as those goods are used as inputs within the FTZ
  • Access to any type of credit or capital available in the country
  • Freedom of possession and negotiation of foreign currency and ability to open bank accounts in foreign currency in national or foreign banks established in the country
  • Tax exemption over dividends

FTZs in their present form will only operate until December 31, 2006, due to Colombia’s commitments at the World Trade Organization (WTO).