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BARRANCABERMEJA'S ZESE TAX REGIME: AN OPPORTUNITY FOR FOREIGN INVESTORS?



Are you a foreign investor planning to develop a productive activity in Colombia?



If so, a preferential tax regime known as the "Zona Económica y Social Especial" ("ZESE regime", hereinafter) is in force in Colombia and provides a preferential corporate income tax rate ("CIT", hereinafter), whereas Colombia has one of the highest CIT rates among OECD member countries[1].

 

The ZESE regime, the conditions of which are described below, allows newly registered commercial companies with the BARRANCABERMEJA Chamber of Commerce to benefit from a corporate income tax exemption until December 31, 2028, as well as a 50% reduction in the standard corporate income tax rate until December 31, 2033.  



Ville de Barrancabermeja


1 – Economic activities covered by the ZESE 


 

The ZESE regime is reserved for commercial companies whose sales are directly linked to the exercise of one of the following main economic activities:

 

(i)           An industrial activity (raw material processing);

(ii)          An agricultural activity (planting, grazing, breeding, etc.);

(iii)         A commercial activity (sale, distribution, wholesale of goods or merchandise);

(iv)         Tourism (hotel, vacation resort, accommodation, travel agency, etc.); and/or

(v)           Healthcare (home care, nursing homes).

 

However, it should be pointed out that (i) civil or commercial activities that can be qualified as the provision of services are excluded from the ZESE regime, and (ii) the activity must be carried out from within the ZESE.



2 – One condition: Generate and maintain at least two direct jobs within the Company's workforce :



To take advantage of the ZESE regime, the foreign investor must contribute to reducing unemployment in BARRANCABERMEJA, by creating at least two direct jobs.

 

In other words, a company newly registered with the BARRANCABERMEJA Chamber of Commerce must have signed up at least two CDD and/or CDI contracts before December 31, 2024, to apply the ZESE regime. In addition, for the duration of the ZESE regime, the company must be able to prove each year that it has maintained an average of at least two direct jobs (fixed-term or open-ended) in its workforce.



3 – Deadline for taking advantage of the SEZ regime:



The ZESE regime is applicable until December 31, 2024. Foreign investors wishing to take advantage of this regime have until this deadline to (i) register a commercial company under Colombian law and (ii) create 2 direct jobs within the aforementioned entity.


It may just be worth the effort!




Benoit Renard, member of the Paris, Madrid and Bogotá bars.






Disclaimer: This article does not constitute binding legal advice from GORIOUX COLOMBIA S.A.S. Its purpose is simply to inform the community about Colombia's preferential tax regime, whose conditions of application must be assessed and validated by a tax lawyer before taking advantage of it.

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