The Investment Attraction Law outside the Greater Metropolitan Area (GAM) No. 10234 was created with the aim of promoting investment, generating employment, and boosting productive activity in areas outside the GAM.

According to the first article of the law, companies that make new investments in the country outside the Greater Metropolitan Area (GAM) may obtain the benefits established by the Free Trade Zone Regime Law, Law No. 7210, and its reforms, as long as the projects are new and the companies interested in their development are wholly or partially exempt from income tax, in the terms regulated by the aforementioned free zone law.

This law changes the paradigm from foreign investment to external investment, boosting endogenous development and harnessing the resources of different rural areas in Costa Rica.

Massi DevotoMassi Devoto, ADELTJ

Legislation on Free Trade Zone Regime for companies outside the GAM

The Free Trade Zone Regime comprises incentives and benefits that the Costa Rican State grants to companies making new investments in the country.

Companies benefiting from this Regime are primarily engaged in handling, processing, manufacturing, producing, repairing, and maintaining goods, as well as providing services intended for export or re-export.

Article 1 Bis of Law No. 7210 stipulates that for companies established outside the Greater Metropolitan Area (GAM), investments related to public infrastructure and human capital are considered as new investments.

Regarding the former, these may range from road projects to improvements in educational and community care centers in the canton where the company is located. To comply with these requirements, companies must formalize public-private agreements and adhere to relevant regulations.

On the other hand, investments in human capital are aimed at closing gaps, developing new skills, conducting research, training suppliers, and human resources.

Companies must outline these commitments when applying for entry into the regime, pledging to carry out these investments within a maximum period of five years. Monitoring of these commitments falls under Procomer, which assesses compliance through annual reports and periodic audits.

Additionally, specific conditions are set for entry into the free trade zone regime, excluding certain projects already completed or related to other companies already enjoying similar benefits. The Coprocom oversees competition promotion in accordance with current legislation on competition and consumer protection.

New incentives and benefits of Law No. 10234 for investment attraction in areas outside the GAM:

  • Expansion of three new categories in the Free Trade Zone Regime:

    • Human health services.
    • Input Providers.
    • Sustainable Adventure Parks.
  • Shorter approval times for permits and public service requests.

  • Reduction of the initial investment requirement for companies located outside the GAM, outside of a Free Trade Zone Park ($500,000 -> $250,000).

  • Possibility of lower electricity costs if installed in free trade zone parks that establish an energy community, in collaboration with the park administrator.

  • Temporary reduction of social security payments during the first 10 years of operation.

  • Possibility of including new types of investment for the free trade zone entry requirement as an alternative to the fixed assets requirement.

    • Investment in public infrastructure projects.
    • Investment in training and development of human capital.
  • Opportunity for Services companies (category C) with an interest in investing in FdG, to meet the Strategic Services Eligibility Index (IEES).

This type of legislation seeks the development of local communities, job creation, and the overall growth of the business sector in Costa Rica. To learn about investment opportunities in areas outside the GAM, do not hesitate to contact our advisors.