Business in Costa Rica outside of the tourism industry is doing well, although much of this is concentrated in the San Jose area, which means a disproportionate distribution of wealth among the Costa Ricans. In fact, most of the 247 companies in Costa Rica's free trade zone are located mostly around the San Jose area, and in Heredia and Alajuela, located north and northwest of the capital city, respectively.
Basically, a free trade zone allows businesses to import and export materials without barriers such as quotas and tariffs. Instituting a free trade zone is usually one of the ways by which a developing nation can attract foreign investors to set up businesses in its territory.
Sensing the need to redistribute the wealth and the opportunity to different parts of the country, Costa Rican lawmakers approved a new free-trade-zone reform that will offer tax incentives on corporations that will set up their businesses in regions outside the Central Valley. By doing so, the lawmakers hope that the companies will be attracted to reconcentrate their operations somewhere else.
Companies that elect to set up their businesses in the province of Limon, near the central Pacific port of Puntaneras, and the northern province of Guanacaste will pay less in income taxes during the first six operations. The fraction of income taxes to be paid will be determined by the degree of investment made and the number of employees employed in these locations.
As of the moment, businessmen in the Central Valley have to pay 6 percent in income taxes during the first 6 years and 15 percent in the next 4 years. They can also receive tax incentives when certain investment and employment requirements are met.
So if you are planning to set up your own exporting company in Costa Rica, now is the time to do so with the array of tax benefits that wait for you. If it's possible, set it up in the abovementions free trade zones to get even more tax incentives.
For more details about this news bit, please read the full article on The Tico Times.
