|
|
|
No. 7210
THE Legislative assembly of the Republic of Costa Rica, Decrees:
Free Zone Regime law
Chapter I Free Export Zones
Article 1. The Free Zone Regime is the set of incentives and benefits granted by the State to companies making new investments in the country, provided they do comply with all the other requirements and obligations established in this Law and its Regulations. The Regulations shall determine the definition of new investments in the country. The companies benefited under this Regime shall be engaged in the handling, processing, manufacture, production, repair and maintenance of goods and the provision of services for exportation or re-exportation, except as foreseen in Articles 22 and 24 of this Law. The place where a group of companies benefited under this Regime gets established shall be named "free zone" and shall be a delimited area, without population, authorized by the Executive Branch to operate as such.
The Free Zone Regime shall be granted only to companies with projects which new initial investment in fixed assets involving an amount of at least one hundred and fifty thousand U.S. dollars (US$150,000.00) or its equivalent in national currency.
The small companies that got associated to conduct, together and directly, processing activities for exportation purposes, can reach the minimum investment amount specified in this article, by adding the amount of the investment of each partner company, as provided in the Regulations to this Law. For these purposes, small companies shall be those that employ no more than twenty workers.
The companies that qualify under the Free Zone Regime shall have to comply with all environmental protection rules established by Costa Rican and international legislation for the sustainable development of economic activities.
As amended by Article 1, subsection a) of Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
CHaptER II Corporación ([1])
Article 2. Repealed by Article 13 subsection a) of the Law of Creation of the Ministry of Foreign Trade and Promotora del Comercio Exterior de Costa Rica No.7638 of October 30, 1996.
Article 3. Repealed by Article 13 subsection a) of the Law of Creation of the Ministry of Foreign Trade and Promotora del Comercio Exterior de Costa Rica No.7638 of October 30, 1996.
Article 4. Corporación is empowered to:
a) Promote the creation and establishment of Free Zones.
b) Recommend, channel and regulate the respective permits of the companies that wish to establish themselves in Free Zones, in coordination with the appropriate government institutions.
c) Assume, as an exception and on a temporary basis, the management of the free zones, when the grant of benefits under the Free Zone Regime has been suspended or revoked to a managing company.
This subsection has been so amended by Article 1, subsection b), Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
ch) To lease properties and lands of its own or given to it for management, to allow the companies to build, cause to build or modify, at their expense, buildings designed to meet their specific requirements. At the end of the lease term, the constructions and improvements in properties of Corporación shall become its property if the owner cannot dismantle and take them within the term specified by Corporación for such purpose.
d) To sell the properties and lands of Corporación, which price cannot be less than the one determined by means of appraisal conducted for the purpose by the General Directorate of Direct Taxation.
e) To coordinate with the relevant institutions the establishment of customs, security and health facilities needed in accordance with the requirements and recommendations of the Ministries of Finance and Health and those of the National Insurance Institute, as the case may be.
f) To build, contract and coordinate with the respective State institutions the construction of infrastructure and public services facilities required for the adequate performance of its duties.
g) Repealed by Article 3, subsection a), of Law No. 7830 of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
h) To establish a security deposit, in accordance with the provisions of Article 9, subsection ch) of this Law, which shall be provided by the companies operating under the Free Zone Regime in favor of Corporación. Such security can be used by Corporación to pay any debts that the company providing it may have acquired with Corporación and which are outstanding at the time the Executive Resolution is revoked.
i) To verify that the Free Zone managing companies build the child daycare centers necessary inside the respective industrial park for the children of workers with a range age from zero to five years old. The park managers shall rent this service to the companies installed there.
Likewise, it shall see to the construction of recreational zones in each park for the use of the workers.
j) To hire the personnel required for its normal operation.
k) To perform any other lawful actions as required for the achievement of its purposes.
Article 5. Corporación is required to comply, as appropriate, with the directions on development and attraction of foreign investment issued by the Executive Branch.
Article 6. Repealed by Article 13 subsection a) of the Law of Creation of the Ministry of Foreign Trade and Promotora del Comercio Exterior de Costa Rica No. 7638 of October 30, 1996.
Article 7. All the incentives and benefits established in this Law in favor of the companies operating under the Free Zone Regime shall be granted to Corporación, which shall also be exempted from payment of any taxes or duties it has to pay on a proportional basis under any contract subscribed by it.
CHaptER III Organization of Corporación
Article 8. Repealed by Article 13 subsection a) of the Law of Creation of the Ministry of Foreign Trade and Promotora del Comercio Exterior de Costa Rica No. 7638 of October 30, 1996.
Article 9. Repealed by Article 13 subsection a) of the Law of Creation of the Ministry of Foreign Trade and Promotora del Comercio Exterior de Costa Rica No. 7638 of October 30, 1996.
Article 10. Repealed by Article 13 subsection a) of the Law of Creation of the Ministry of Foreign Trade and Promotora del Comercio Exterior de Costa Rica No. 7638 of October 30, 1996.
CHaptER IV Relationships with other institutions
Article 11. The Ministry of Public Works and Transportation shall give priority to the improvement of airports, highways, roads and other communication means located near Free Zones.
Article 12. The Ministry of Finance shall be in charge of the surveillance and control of the fiscal regime of the Free Zones in accordance with this Law, its regulations and any other fiscal legislation.
Article 13. The areas where the companies operating under the Free Zone Regime are located are hereby declared to be a Primary Customs Zone.
This first paragraph has been so amended by Article 1, subsection c), Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
Only those operations conducted by the companies operating under the Free Zone Regime within the National Customs Territory shall require the use of a Customs broker.
Article 14. Park managers and the companies operating under the Free Zone Regime shall provide to the General Customs Directorate the facilities and assistance it may require for performance of its duties in connection with the supervision and inspection of the materials and merchandises entering and exiting the Free Zones.
Likewise, those managers shall provide to the Ministry of Foreign Trade and to PROCOMER the facilities and assistance that these entities may require for performance of their duties in connection with the companies that are beneficiaries under the Free Zone Regime.
This second paragraph is so added by Article 2, subsection a), of Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
Article 15. The Ministry of Health shall resolve within twenty business days the applications to obtain the sanitary permits required for the installation and operation of the companies operating under the Free Zone Regime. If the Ministry fails to adopt a resolution within said term, the application shall be considered duly approved.
Article 16. The wastage, byproducts and waste disposed of by the companies operating under the Free Zone Regime shall belong as a priority to the Municipal Government of the canton where such companies are located, provided they can be treated at local or national level and do not endanger the population in any way. In these cases, Municipal Governments are authorized to sell them on a direct basis. If the wastage, byproducts and waste cannot be treated at local or national level, the company shall be responsible for such treatment.
Whenever any producer or seller of goods similar to those disposed of by the companies operating under the Free Zone Regime feels injured in his/its interests in connection with the management of the wastage, the byproducts and the waste by the Municipal Government, he/it can file a claim with the Ministry of Economy, Industry and Commerce. This Ministry shall resolve the conflict in favor of the claimant, if determines that he/it is in an evident disadvantageous situation. For the purpose of solving these conflicts, the Ministry of Economy, Industry and Commerce shall establish via regulations the procedure to be followed.
As amended by Article 1 subsection d) of Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
CHaptER V Beneficiaries
Article 17. The companies operating under the Free Zone Regime shall be classified as follows:
This first paragraph has been so amended by Article 1, subsection e), Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
a) Export processing industries, which produce, process or assembly for exportation or re-exportation.
b) Commercial exportation companies that do not produce, but just handle, repack or redistribute non-traditional merchandises and products for exportation or re-exportation.
c) Industries and service companies that export to individuals and legal entities domiciled abroad or provide them to the beneficiaries of the Free Zone Regime; provided, in the latter case, that the services are directly related to the process of production of the beneficiaries of the Free Zone Regime.
The benefits of this Regime cannot be granted to the banking, financial and insurance entities installed in free zones. The individuals and legal entities engaged in the provision of professional services cannot become beneficiaries of this Regime either.
This subsection has been so amended by Article 1, subsection e), of Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
ch) Companies managing parks for installation of companies under the Free Zone Regime, provided the parks comply with minimum conditions of infrastructure and availability of services, in accordance with the Regulations to this Law. These companies shall enjoy the exemptions specified in Article 20, provided only companies operating under the Free Zone Regime get installed in the industrial park. If companies not operating under the Free Zone Regime establish themselves in the park, the managing company shall lose then the exemption specified in subsection g) of Article 20 and, in the case of the other exemptions, they shall be reduced in the appropriate proportion, as if they were sales within the National Customs Territory in the terms of Article 22.
This subsection has been so amended by Article 1, subsection e) of Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
d) Companies or entities engaged in scientific research for improvement of the technological level of industrial or agro-industrial activities and the Foreign Trade of the country.
e) Companies operating dockyards or dry or floating docks, for construction, repair or maintenance of ships.
Article 18. The individuals or legal entities, national or foreign, with activities in the Free Zones covered in this Law and those that may be included in the respective executive resolution, can:
a) Introduce, store, exhibit, pack, unpack, manufacture, process, produce, mount, assemble, refine, distill, purify, mix, transform and handle all kinds of merchandises, products, raw materials, components, packing material, containers and other commercial items for exportation or re-exportation, except for those which importation, commercialization or manufacture is prohibited by the laws of the Republic, with the reservations made in Articles 22 and 24 of this Law.
b) Provide and retain services to and from the companies of the Free Zones and the individuals or legal entities domiciled abroad, such as: financing, insurance, shipment, forwarding, documentation, supply, lease of buildings, maintenance and any others that may be convenient for the development of the Free Zone or the regime in general.
The companies engaged in the provision of banking or financial services shall be governed by the regulations of the National Banking System and related rules, as well as for any existing regulations for the purpose.
c) In general, to perform all acts necessary for the establishment and operation of Free Zones, provided they do not contravene the Costa Rican laws.
ch) Exceptionally, and only when the characteristics of the productive process or the nature of the project prevent its development within an industrial park, the Free Zone Regime benefits may be granted to export processing companies established outside an industrial park, provided the initial investment in fixed assets amounts to at least two million U.S. dollars (US$2,000,000.00) or its equivalence in national currency, and the other regulatory requirements are met. In order to grant the Free Zone Regime outside an industrial park, the Ministry of Foreign Trade shall have a favorable opinion from the Ministry of Finance. The latter shall provide an opinion within fifteen business days following receipt of a copy of the respective application. If this term lapses without an answer from the Ministry of Finance, it shall be understood that its opinion is favorable.
Also exceptionally, whenever factors such as availability of labor, transportation, management of raw materials or any other, duly qualified via regulations and upon prior express authorization of PROCOMER make it necessary, the companies operating under the Free Zone Regime and located in an industrial park can install satellite plants outside the park, which shall comply with the terms of the Executive Resolution authorizing the company. The plant installed in the park shall produce a significant proportion of its total production in comparison with the number of plants installed outside the park, subject to the criteria issued by PROCOMER for the purpose. Likewise, all imports of raw materials, machinery and others, as well as the exports of final products shall be processed from the plant established in the industrial park, with the exception of special cases duly justified and authorized by PROCOMER.
The benefits of the Free Zone Regime cannot be granted in the cases mentioned in the foregoing paragraphs if the companies do not have the appropriate tax or Customs controls.
This subsection has been so amended by Article 1, subsection f), Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
CHaptER VI Duties of the companies
Article 19. The beneficiaries under the Free Zone Regime shall have the following duties:
a) To keep specific books ands records authorized by Corporación to enter the operations of the company in connection with the goods that enjoy the tax exemptions authorized by the Ministry of Finance, which shall be subject to the inspection of Corporación and the tax authorities.
b) To provide to the appropriate authorities any reports they may request on the use and destination of the articles to be imported under this Law, as well as permit them to conduct any pertaining verifications, when the authorities may deem it convenient.
c) To provide for free or to lend samples of the articles produced to any official body that may request them, for the display of such samples at any international exhibitions where the country may have participation.
ch) To subscribe a Contract of Operations with Corporación.
d) To provide the reports with regard to employment levels, investment, national value added or others specified in the Executive Resolution that grants the Regime benefits. Compliance with this obligation shall be an essential requirement to enjoy the incentives set forth in this Law.
This subsection has been so amended by Article 1, subsection g), Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
e) To use the Customs declarations, the precincts and other instruments required by law or regulations to document or control their operations.
This subsection has been so added by Article 2, subsection b), Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998. The numbers of the subsequent subsections shall be amended as appropriate. Former subsection e) is now subsection g).
f) Park managing companies, the companies granted the benefits of the Free Zone Regime outside the industrial park and the satellite plants, shall establish the controls necessary over the entrance and exit of merchandises, the procurement proceedings and any other rules established by the governing laws and regulations.
This subsection is so added by Article 2, subsection b) of Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
g) To comply with any other obligations and conditions imposed to the beneficiaries in the Executive Resolution that grants the benefits of the Free Zone Regime, as well as in the Regulations to this Law and in the Contracts of Operation subscribed with Corporación.
CHaptER VII The incentives
Article 20. The companies operating under the Free Zone Regime shall enjoy the following incentives, with the exceptions hereinafter indicated:
This first paragraph has been so amended by Article 1, subsection h), Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
a) Exemption from payment of all taxes and consular duties on imports of raw materials, manufactured or semimanufactured products, components and parts, packaging and container materials, as well as other merchandises and goods required for their operation.
When there are national raw materials available, the company shall use them as a priority, if the General Directorate of Industry objectively determines that they provide the same conditions with regard to price, quality and timely delivery required for them. This evaluation shall be conducted if the local producer of the raw materials makes the respective request to the General Directorate of Industry and, after the grant of the Free Zone Regime benefits to the company in question.
b) Exemption from all taxes and consular duties affecting the imports of machinery and equipment, as well as those of their accessories and spare parts, and on imports of motor vehicles required for their operation, production, management and transportation.
The vehicles and parts of vehicles that can be exempted shall be the following: -Chassis with cabin, having a loading capacity of one to two tons. -Trucks or chassis for trucks. -Pick-up truck, with a loading capacity of one to two tons. -Vehicles with capacity for at least fifteen passengers.
These exemptions shall be conditioned to full compliance with the Executive Resolution granting the respective exemption.
Five years after its importation with an exemption, any machinery or equipment can be transferred, regardless of the destination, or enter the National Customs Territory freely, with no need to pay any taxes.
The vehicles acquired by companies operating under the Free Zone Regime can move throughout the national territory, for which they shall obtain the appropriate authorizations from the respective authorities. If persons operating within the National Customs Territory acquire these vehicles, they shall pay the appropriate transfer and nationalization taxes, not being exempted from payment thereof, in accordance with the foregoing paragraph, upon the lapse of time.
It must be understood that if the person that acquires a vehicle from a company operating under the Free Zone Regime enjoys exemptions for such acquisition, he/it may use them.
c) Exemption from all taxes and consular duties on imports of fuels, oils and lubricants required for the operation of these companies. Such exemption shall be granted only when these goods are not produced within the country with the quality, in the quantity and within the time necessary. The Ministry of Economy, Industry and Commerce shall grant prior authorization for such importation and issue a reasoned resolution on the matter within no more than fifteen business days.
This subsection has been so amended by Article 1, subsection h), Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
ch) Exemption from all taxes associated with the exportation or re-exportation of products. This exemption shall be granted for re-exportation of production machinery and equipment from the Zones that have entered under this Law.
d) Exemption for a term of ten years counted from the start of the operations from payment of taxes on capital and net assets, from payment of property taxes and from payment of the tax on transfer of real estate.([2])
e) Exemption from sales and excise taxes on purchases of goods and services.
f) Exemption from all taxes on remittances abroad.
g) Exemption from all taxes on profits, as well as any other which taxable base is determined on the basis of the gross or net profits, the dividends paid to shareholders or income or sales, in accordance with the following differences:
1. For companies located in zones of "higher relative development", the exemption shall be one hundred percent (100%) for a term of up to eight years and fifty percent (50%) for the following four years.
2. For companies located in zones of "lower relative development", the exemption shall be one hundred percent (100%) for a term of up to twelve years and fifty percent (50%) for the following six years.
The terms shall be counted from the initial date of the productive operations of the beneficiary company, provided such term does not exceed two years from publication of the respective Executive Resolution.
The exemptions contemplated in this subsection shall not apply when the potential beneficiaries can discount in their country of origin the taxes exempted in Costa Rica.
In order to define a "zone of higher or lower relative development", Corporación shall comply with the provisions established by the Ministry of National Planning and Economic Policy for the purpose.
This subsection is so amended by Article 1, subsection h) of Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
h) Exemption from all municipal taxes and licenses for a term of ten years. The companies to which this article refers shall pay the municipal services they use. In this case, the respective Municipal Government can charge up to two times the rates established by law for those services. Notwithstanding the above, the companies established in Free Zones shall be authorized to retain those services from any individual or legal entity.
i) Exemption from all taxes on imports and exports of commercial or industrial samples, upon prior authorization of Corporación.
j) For a better development of their operations, the companies operating under the Free Zone Regime can freely perform and enter into all kinds of acts and contracts in foreign currency. In this case, the respective amounts shall be necessarily paid in this currency in their international transactions or those conducted with other companies established under the Free Zone Regime.
The companies operating under the Free Zone Regime shall enjoy the free possession and management of foreign currency acquired as provided in the foregoing paragraph or derived from their regular activity, being exempted from the application of the exchange regulations. The Central Bank shall establish the regulations for this benefit and the activities derived from it. These Regulations shall be an essential requirement for the enjoyment of such benefit.
The needs of national currency of these companies shall be processed only through authorized commercial banks, converting the foreign currency they have available for such purpose into local currency.
k) The companies established in free zones located in zones of "lower relative development", in accordance with the rating of the Ministry of Foreign Trade, upon prior report of the Ministry of National Planning and Economic Policy, shall have the right to receive a bonus equivalent to ten percent (10%) of the amount paid for salaries the previous year, after deduction of the amount paid to the Costa Rican Social Security Administration on these salaries and in accordance with the certificate of the payroll reported to the Costa Rican Social Security Administration. These companies can request the benefits of this Law, within five years following entrance into force of the provisions of this subsection. The benefit shall be granted for five years, decreasing two percentage points until its liquidation the last year. This bonus shall be issued against the national budget under the conditions determined by the Regulations to this Law.
This first paragraph has been so amended by Article 1, subsection h), Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
For the purpose of funding this benefit, the Executive Branch can include an annual budgetary item in the amount of forty million colones (40,000,000) for the first year of enforcement. This amount shall be adjusted on a yearly basis in the percentage increase of the total amount of the payrolls of the companies qualified to receive this bonus the preceding year.
If the annual amount of this item is exhausted, the applicants not covered can be granted the benefit the following period.
The issuing modality and the conditions concerning the bonus hereby created shall be stipulated in the Regulations to this Law.
As amended by Article 1 of Law No. 7467, of December 20, 1994, published in the Official Journal "La Gaceta" No. 246, of December 27, 1994.
l) The export processing companies, beneficiaries of the Free Zone Regime, which after four years of operating under such Regime do reinvest in the country can receive an additional exemption from payment of income taxes, in accordance with the following parameters:
1. If the reinvestment exceeds twenty-five percent (25%) of the original investment, the exemption shall be for one additional year.
2. If the reinvestment exceeds fifty percent (50%) of the original investment, the exemption shall be for two additional years.
3. If the reinvestment exceeds seventy-five percent (75%) of the original investment, the exemption shall be for three additional years.
4. If the reinvestment exceeds one hundred percent (100%) of the original investment, the exemption shall be for four additional years.
The additional exemptions shall be seventy-five percent (75%) of the income tax payable. Any additional exemptions herein granted shall apply after the eighth year of operations, without prejudice of the exemptions corresponding to the final term of four years originally granted, which shall apply once the additional exemption period hereby regulated expires. In the case of companies installed in zones of "lower relative development", the additional exemption granted shall enter into force after their twelfth year of operations, without prejudice of the exemptions corresponding to the final period of six years originally granted, which shall enter into force after expiration of this period of the additional exemption. The reinvestment that results in the additional exemption shall be completed after the fourth year and before the start of the eighth year of operations under the Free Zone Regime.
The additional exemption can only be granted to companies which original initial investment in fixed assets has amounted to at least two million U.S. dollars (US$2,000,000.00).
This subsection has been so added by Article 2, subsection c) of Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
The companies specified in subsection b) of Article 17 shall not enjoy the exemptions established in subsections f) and g) of this article. When any of the companies specified in other subsections of Article 17, other than subsection b), conducts commercialization activities, they shall suffer a reduction of the income tax exemption in the same proportion of such activities, as established in the Regulations to this Law. The performance of commercialization activities by non-commercialization companies operating under the Regime can only be complementary, not their main activities, and shall require the prior authorization of PROCOMER.
This final paragraph is so added by Article 2, subsection c) of Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
Article 20 bis. The Free Zone Regime benefits shall not be granted to individuals or legal entities to operate or develop a company or an investment project already benefited with the incentives of the Regime, even if it was under a different individual or legal entity, unless it is demonstrated that it is a new project or, in exceptional cases, when it is justified by the nature and magnitude of the additional investments; all in the judgment of the Ministry of Foreign Trade and in accordance with the provisions of the Regulations to this Law.
This article was added by Article 2, subsection d) of Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
Article 21. In addition to the aforesaid tax incentives, the companies established in the Free Zones can request the following benefits to the managing company of each of them or to Corporación:
a) Assistance for training, coordinated with Instituto Nacional de Aprendizaje (INA) (National Learning Institute), for the employees and persons wanting to become employees of the companies established in the Free Zones.
The companies located in Free Zones, in regions of "lower relative development", can participate in the National Program for Employment Generation of the Ministry of Labor and Social Security, directed to train and provide jobs to people unemployed, sub-employed or with low income in the zone, as defined in the regulations to be jointly prepared by the Ministries of Foreign Trade and of Labor and Social Security.
The Ministry of Labor and Social Security and the companies shall subscribe an agreement, which shall comply with the following provisions:
1. The term of preparation, training or retraining shall be three months, extendable for an equal period of time when required by the complexity or the intensity of the process, in the judgment of the Ministry of Labor and Social Security, upon prior report of the Ministry of Foreign Trade.
2. The company enjoying this benefit shall be in charge of the training, providing learners the facilities, machinery and equipment necessary for their training. The courses shall be supervised by Instituto Nacional de Aprendizaje, in accordance with the guidelines established in the respective agreement.
3. The Ministry of Labor and Social Security shall grant to the learner a monthly subsidy, at the expense of the Program Fund, during all the training period. The amount of this subsidy shall be equivalent to the monthly minimum wage. Being this an incentive for technical training, this payment shall not generate any employment relationship or other legal effects.
4. The company shall be required to hire the learner, once he has been duly trained, provided he is adequate, in the terms established in the respective agreement.
As amended by Article 1 of Law No.7467 of December 20, 1994, published in the Official Journal "La Gaceta" No. 246, of December 27, 1994.
b) Assistance in the selection of the personnel to be employed by these companies. The selection activities shall be coordinated with Instituto Nacional de Aprendizaje, the Ministry of Labor and Social Security, unions and other State and local institutions.
c) Assistance and advice on their requirements and needs before government and private institutions.
ch) Assistance concerning housing and educational needs for their employees as well as their families, by means of coordination with the respective public institutions.
Article 22. The companies operating under the Free Zone Regime, with the exception of those specified in subsection b) of Article 17, can introduce into the National Customs Territory up to twenty-five percent (25%) of their total sales, upon prior compliance with the requirements established in the Regulations to this Law. In the case of the companies specified in subsection c) of Article 17, the maximum percentage shall be fifty percent (50%).
The goods and services introduced into the national market shall be applied the Customs procedures and taxes typical of any similar importation from a foreign country. Furthermore, the percentage of the exemption from payment on taxes on imports of machinery, equipment and raw materials and the taxes on profits shall be reduced in the same proportion represented by the value of the goods and services introduced into the National Customs Territory in the total value of the sales and services of the company, in accordance with the Regulations to this Law.
As amended by Article 1 subsection i) of Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
Article 23. The national companies that provide services, national raw materials, products, parts or components, partially or fully manufactured in the country, to the companies established in Free Zones, shall not charge or withhold in these transactions sales taxes or excise taxes. Only national suppliers shall specify and indicate in the respective tax return the amount of the sales exempted from sales taxes or from excise taxes, as the case may be.
As amended by Article 33 of Law No. 8262, of May 2, 2002, published in the Official Journal "La Gaceta" No. 94, of May 17, 2002.
Article 24. All materials, goods, products, vehicles, equipment and machinery, imported or produced in the Free Zones, in accordance with the previsions of this Law, can be sold, traded and transferred between companies established under this Regime, with the authorization of Corporación. The companies established in the Free Zone Regime, under the classification of subsection a) of Article 17, can subcontract within the National Customs Territory or with other companies established under the Regime part of their production or their production process, in strict compliance with the provisions of the regulations that govern this matter.
Likewise, the companies established under the Free Zone Regime can introduce into the National Customs Territory, machinery, vehicles or equipment from the Free Zones, if this is done for the purpose of repairing or modifying said goods.
For this purpose, the General Customs Directorate shall grant the respective permit, upon prior establishment of a Customs pledge to guarantee reentrance of said goods into the Free Zone, or else payment of the respective taxes.
The Regulations to this Law shall establish the requirements, the conditions and the standards of control over the sale of goods and services between the companies that are beneficiaries of the Free Zone Regime and companies that are beneficiaries of other special importation and exportation regimes.
This final paragraph was so added by Article 2, subsection e) of Law No. 7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
cHaptER VIII Procedure to grant the Regime benefits
Article 25. The individual or legal entity interested in being granted the benefitis of the Free Zone Regime, under the classification of any of the categories specified in Article 17 of this Law, shall file the respective application with Corporación, duly authenticated by a Notary, together with detailed information about the contamination produced by the process and its waste, as well as the documents requested by the Board of Directors of Corporación, all in accordance with the instructive manuals provided to it for the purpose by Corporación.
Article 26. Corporación shall analyze the application and the information supplied, provided they are complete, and submit its opinion to the Board of Directors, which shall resolve not later than at its regular meeting following receipt of the opinion or at an extraordinary meeting, if so is resolved by four of its members.
If the information is incomplete, Corporación shall communicate to the interested party the observations it may deem convenient within eight business days counted from the filing of the application. Once the requirements have been satisfied, the established procedure shall continue.
Whenever it may deem it convenient, Corporación shall request an specialized opinion to the various State institutions, for a better analysis of the application filed by the companies.
Article 27. If the recommendation is admitted, the Executive Branch shall approve it by means of a resolution containing the matters determined by the Regulations to this Law.
Article 28. Repealed by Article 13 subsection a) of the Law of Creation of the Ministry of Foreign Trade and Promotora del Comercio Exterior de Costa Rica No.7638 of October 30, 1996..
Article 29. Repealed by Article 13 subsection a) of the Law of Creation of the Ministry of Foreign Trade and Promotora del Comercio Exterior de Costa Rica No. 7638 of October 30, 1996.
CHaptER IX Penalties and revocation of the Regime
Article 30. If the transgressions committed, specified in Article 32 of this Law, are punishable facts, the Minister of Foreign Trade shall report the matter as appropriate to the Public Prosecution Bureau in order that it may initiate and file the pertaining criminal actions.
Article 31. Repealed by Article 3 subsection b) of Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta", No. 198, of October 8, 1998.
Article 32. The Ministry of Foreign Trade can impose a fine of up to three hundred times the base salary, in accordance with the definition thereof of Article 2 of Law No. 7337, of May 5, 1993, or eliminate for a term ranging from one month to one year one or more of the incentives specified in Article 20 of this Law, or revoke the Free Zone Regime without any responsibility for the State, to the beneficiaries that commit any of the following transgressions:
a) To have provided false data in the application for the Regime benefits.
b) To initiate operations after the term established in the Executive Resolution.
c) Failure to comply with the new levels of investment, employment, national value added or any other specified in the respective Executive Resolution.
d) To submit after the regulatory deadline the annual report of activities and any other reports requested by PROCOMER or the Ministry of Foreign Trade. The failure to submit the annual report within the term established for the purpose shall imply an automatic suspension of all the Regime benefits, until a report duly completed is submitted.
e) To make sales on the local market without meeting the requirements established in Article 22 of this Law.
f) Failure to pay on time the fees for the use of the Regime.
g) Failure to make the security deposit established in this Law or failure to renew it upon maturity thereof.
h) To cease operations or abandon their facilities without prior authorization, as indicated in the Regulations to this Law.
i) The company, shareholders, directors, employees or officers have been penalized in connection with the activities of the company, by means of a final administrative resolution, because they have committed administrative, tax or tax-customs transgressions. In this case, the imposition of fines shall not be appropriate, but the revocation of the Regime benefits shall be in the case of serious or repeated infringements in the judgment of the Ministry of Foreign Trade.
j) The shareholders, directors, employees or officers of the beneficiary company have been convicted in connection with the activities of the company, by means of final Court resolution, because they have committed tax or customs offenses. In this case, the imposition of fines shall not be appropriate, but the revocation of the Regime benefits shall be in the case of serious or repeated transgressions in the judgment of the Ministry of Foreign Trade.
k) The company has ceased to make payments or has been declared bankrupt, or has been placed under receivership, or entered into a preventive creditors' agreement.
l) Any other failure to comply with its obligations under the law, the regulations and the contracts of operation.
m) To handle the wastage, the byproducts and the waste without complying with the provisions of Article 16 of this Law and its Regulations.
n) To use or allocate in a way other than the one specified in the appropriate Executive Resolution the machinery, the equipment, the vehicles, the raw materials, the semi-manufactured products and any other articles acquired by the companies under the incentives granted.
) Failure by the park developing companies to comply with the security and control rules established in the Regulations to this Law.
The seriousness of the fault, the extent of the guilt or the existence of malice by the employees or the officers of the company, recidivism and, in the case of fines, the volume of income of the company, shall be taken into account when determining the applicable penalty.
Within six months, the Ministry of Foreign Trade can order a preventive suspension of the incentives and benefits contemplated in this Law during any administrative proceedings or judicial investigations questioning the legality of the activity of a company that is a beneficiary under the Free Zone Regime, of related companies or their shareholders, directors, managers or officers. Neither the preventive suspension nor the lifting thereof shall prejudge on the subject matter of the final resolution of the respective administrative proceedings or judicial proceedings.
The Ministry of Foreign Trade and the Ministry of Finance shall determine the mechanisms of coordination required for the most correct and efficient application of the controls and penalties to be applied to the beneficiaries under the Free Zone Regime.
The proceeds from the fines established in this article shall be distributed as follows: fifty percent (50%) to PROCOMER and fifty percent (50%) to the Municipal Government of the canton where the beneficiary company is located.
The imposition of the penalties foreseen in this article can be contested by means of appeal for reversal to be filed within five business days following notice of the appropriate resolution. This appeal exhausts administrative proceedings.
The resolution imposing a fine shall be an enforceable document for collection purposes against the transgressor and PROCOMER shall be empowered to collect it.
As amended by Article 1 subsection j) of Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998.
Article 33. The Executive Branch, upon learning of any of the infringements to which Article 32 refers, shall collect the relevant information and then grant a term of three business days to the transgressing company to offer evidence in its defense, which evidence shall be produced within the following eight business days. The Minister shall issue a resolution within fifteen business days following receipt of the evidence.
The revoking resolution shall be served to the transgressor, which shall have a term of three business days counted from service of the resolution to file an appeal for review before the Ministry. The Ministry shall resolve the matter within eight business days following filing of such appeal. The resolution of the appeal shall exhaust administrative proceedings and the Executive Resolution revoking the concession shall be then published.
CHaptER X Final Provisions
Article 34. The regulations to which this Law refers shall be issued by the respective institutions within ninety days, counted from publication of the Law.
Article 35. Corporación is exempted from application of Law No. 6821, Law of Creation of the Budgetary Authority, as amended, of October 19, 1982, Law No. 6955, Law for the Financial Balance of the Public Sector, as amended, of February 24, 1984, as well as Article 29 of Law No. 5255, National Planning Law, as amended, of May 2, 1974 and, consequently, from application of any decrees, resolutions or directions based on such laws.
Article 36. The operation of dry or floating docks inside the port facilities of Caldera, under the Free Zone Regime established in this Law, is hereby authorized. The Executive Branch can commission such docks directly, through the Ministry of Public Works and Transportation, or the Costa Rican Institute of Pacific Ports, or by means of a concession to a private company, with the authorization of the Office of the Comptroller General of the Republic.
Article 37. The park managing companies shall allocate a place for the workers to hold meetings and assemblies, which shall be kept in good condition. For attendance of such activities, the free access to the park of the workers' representatives shall be allowed.
This article was so added by means of Article 2, subsection f) of Law No.7830, of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, 1998; consequently, the numbers of the two last articles change.
Article 38. Law No. 6695, Law of Exportation Processing Zones and Industrial Parks, of December 10, 1981; No. 6951 of February 14, 1984 (amendment of Article 18 of the Maritime-Terrestrial Law, number 6043 of March 2, 1977, and Articles, 2, 10 and 12 of Law of Exportation Processing Zones and Industrial Parks number 6695 of December 10, 1981) and Article 10 of Law number 6999 of August 28, 1985 (extension of a series of temporary provisions to transfer resources from public companies and institutions to the Government of the Republic and for a temporary change of destination of some taxes) are hereby repealed.
As amended by means of LIST OF ERRATA, published in the Official Journal "La Gaceta" No.5, of January 8, 1991.
Article 39. This Law shall enter into force upon publication thereof.
Temporary Provisions
Temporary Provision I. The current members of the Board of Directors shall remain in office for six months counted from the date of publication of this Law. After this term, the new members of the Board of Directors shall take office.
Temporary Provision II. Corporación is hereby authorized to manage the Free Zones of Mon, in Limón, and of Santa Rosa, in Puntarenas, while their management is not granted to anybody under a concession agreement.
Temporary Provision III. The companies that at the time of the publication of this Law are beneficiaries under the Free Zone Regime can request Corporación, presenting the appropriate documents for the purpose, to adjust their benefits and incentives to the provisions of this Law. For such purposes, they shall comply with the new obligations stipulated in it, within a term of no more than sixty business days counted from the date of effectiveness of this Law and which shall be defined in each case in the new Executive Resolution.
Temporary Provision IV. The Ministry of Labor and Social Security is authorized to attend, at the expense of the National Program Fund for Generation of Employment, the obligations acquired before the entrance into force of this Law, with companies located in zones of "less relative development", derived from the application of that Program.
As added by Article 2 of Law No.7467 of December 20, 1994, published in La Gaceta No. 246, of December 27, 1994.
To be communicated to the Executive Branch
Legislative Assembly - San Jos, on the twenty-second day of November, nineteen hundred and ninety. Juan Jos Trejos Fonseca, President. Ovidio Pacheco Salazar, First Secretary - Vctor E. Rojas Hidalgo, Second Secretary.
Presidency of the Republic - San Jos, on the twenty-third day of November, nineteen hundred and ninety.
To be enforced and published
R.A. CALDERON F.- The Minister of the Presidency, Rodolfo Mndez Mata; the Minister of Finance, Thelmo Vargas Madrigal, the Minister of Economy, Industry and Commerce, Gonzalo Fajardo Salas; and the Minister of Foreign Trade, Roberto Rojas.
* * *
Article 4 of Law No. 7830 of September 22, 1998, published in the Official Journal "La Gaceta" No. 196, of October 8, l998, provides:
Article 4. The Ministry of Finance, by means of regulations issued together with the Ministry of Foreign Trade, can exempt companies operating under the Free Zone Regime from certain proceedings of the definitive and temporary importation and exportation regimes, considering the particularities of this Regime, in order to adjust the operations of the free zones to the needs of the users of the service.
([1]) Article 13, subsection a) of Law No. 7638, "Law of Creation of the Ministry of Foreign Trade and Promotora del Comercio Exterior de Costa Rica", of October 30, 1996, published in the Official Journal "La Gaceta" No. 218, of November 13, 1996, amends this law in order that any references to Corporación de la Zona Franca de Exportación, S.A. be understood as references to Promotora del Comercio Exterior de Costa Rica -PROCOMER-.
([2]) Real Property Law No. 7509 of May 9, 1995, published in the Official Journal "La Gaceta" No. 116, of June 19, 1995, eliminates the Property Tax exemption. On this regard, see the opinion of the Office of the Attorney General of the Republic No. C-056-96. |
