Free Trade Zone Regime
1. ¿Why working in the Free Trade Zone?
The Punta Arenas Free Trade Zone (FTZ) started up in 1977 and is the most important business platform of the Chilean and Argentinean Patagonia.
In its more than 53 hectares (130 acres), along with its extension zone, a strong commercial, trading and industrial activity is carried out, where currently more than 960 users perform diverse actions, such as: imports, exports, purchasing, storage, exhibition, transformation, packaging, processing and marketing, receiving more than 9,6 million visitors per year, with total sales exceeding US$ 300 million annually(2016).
The FTZ aims to simplify and ease foreign trade in terms of imports; promoting price reductions in foreign goods to local producer and also to those regions where the franchise is extended.
To achieve this, ZonAustral or SRI, the franchisee, runs and manages a franchise with a tax and customs exemption regime, through which local people, visitors, companies and institutions can access to extensive benefits and special conditions for the development of their businesses and supplying.
ZonAustral holds the essential facilities (dry and cold cargo warehousing, public storage yards for vehicles, plots for commercial and industrial projects and a shopping center), along with qualified staff to advise companies on the use and benefits of the franchise.
Since November 2004, the benefits of the franchise were extended to the south of the country in the Aisén Region and the Palena Province, providing both industrial and trade development and the quality of life of their inhabitants.
2.How to operate in Free Trade Zone?
In order to operate under the Free Trade Zone franchise, it is necessary to sign a User Contract with the Franchisee ZonAustral, according to present procedures. The following categories of User Contracts are available:
- Public Warehouse User
- Yard and esplanade User
- Warehouse and yard User
- Construction site User
- Store (shopping center) User
- User tab
Foreign companies may operate in the Free Trade Zone under local regulations.
3. Tax Regime
The tax regime for Users involve the following exemptions (Art. Nº. 23 of DFL N º 2/2001):
- Income Tax (current rate of 24%)
- Value Added Tax (IVA) by operations led under Free Trade Zone regime.
- Credit for partners and shareholders, 50% against the Global Complementary Tax or the Additional Tax (from January 2017).
4. Customs Regime
- While the goods remain in the Free Trade Zone, they will be treated as if they were abroad and therefore, they will not be subject to any duties, taxes, fees and other charges collected through Customs.
- May enter the Free Trade Zone under the same custom regime, machinery designed to perform any of the processes referred in the Free Zone Decree Law, as well as those for the transport and handling of goods, fuels, lubricants and spare parts required for maintenance.
- Under the franchise, goods may be marketed in the Extension Zone, that is, all the Magellan Region, Aysen region and Palena Province.
5.Free Trade Extension Zone
It is the region located immediately adjacent to the Free Trade Zone, including the Region of Magallanes and the Chilean Antarctica, with all its provinces. Since November 2004, as established by Law Nº. 19.946, it has been incorporated the Aysen Region, with all of its provinces, and the Palena Province, located in the southeastern end of the Lake District. The people, companies and institutions located in these areas may acquire goods under the franchise.
Since 2008, the franchisee keeps operational offices in the city of Coyhaique, and since 2011 in the city of Chacabuco, which allow an optimal flow of attention to the needs of the Extension Zone.