Zone Profile: Zona Franca Intexzona
Due to its strategic location on the outskirts of Bogota, Intexzona has been relatively successful.
Zone Overview
The outskirts of Bogota have witnessed the impulse of countless industrial parks that have accelerated the development of the region.
The global crisis accelerated in September 2008, with the bankruptcy of Lehman Brothers and the announcement of heavy losses in companies such as AIG and Citibank, which were able to remain in the market thanks to the support they received from the U.S. Government.
In 2006, the new free trade zone legislation was approved. In the following two years alone, by 2008, 47 free trade zones had been approved, representing investments of US$5.573 billion and the generation of 42,145 direct high-quality jobs.
Intexzona, a Free Trade Zone located on the outskirts of Bogota, was created in 2008 and has been in operation for 12 years, with 67 qualified users, 62 of which are fully operational. It was approved by Resolution No. 1834 of February 25, 2008 and has a total of 82 hectares in total[1].
Free Trade Zones in Colombia often use software to monitor operations in real time, facilitate paperwork and forms, and maintain an inventory of goods and raw materials entering the territory under the free trade regime. In the case of Intexzona, the SIZFRA system is used[1].
Intexzona's objective is to attract national and foreign investment[1] thanks to its catalog of benefits. In the push to create new jobs, this Zone plays a role and strengthens the development of Colombia’s regions.
Before Intexzona began construction, the land on which the industrial park is located was purely agricultural. The landowners dedicated their properties to real estate activities, in addition to the construction of industrial parks.
The idea of Intexzona, in principle, was to create a cluster of companies that were intertwined with each other, seeking to create a space where industries could be established that interacted with each other in their products, providing services to each other. In 2008, this idea resulted in "Intexmoda", which was a cluster of companies linked to the textile industry[2].
In that year, the 25 hectares that made up the first stage were qualified as a Free Trade Zone[2].
Subsequently, the project received an important change in its qualification, leaving aside the exclusivity in the textile industry to open to any type of companies. It is at that moment when the company name acquires its current name of "Intexzona".
Intexzona's vision is not only to position its industrial park in the ecosystem of special economic zones in Colombia, but also to extend its activities to the operation of other Free Trade Zones in the country.
Intexzona manages an operating model that contemplates both the lease and sale of the plots that make up its different stages of development. Electricity, water and telecommunications services are public services.
Most of the raw material that enters Intexzona comes from abroad, to be processed and then introduced into Colombia's National Customs Territory. Therefore, only a small part of Intexzona's production activities are destined for export to other countries in the world[1].
Zone Layout
INTEXZONA's infrastructure includes internal 8-inch potable water networks, a wastewater treatment plant, an 11,400-volt subway power network, and a fiber optic digital telephone network supported by CLARO and UNE[1].
Intexona also has truck entry and exit scales, 20-meter wide main roads, 10-meter wide secondary roads, a 5.1-kilometer internal road circuit designed for heavy traffic, and a 5.5-kilometer internal bike path[1].
Intexzona also offers large common areas, beyond the space used for productive activities. Among these areas, there are green areas with an area of more than 222,000 m2, an integral and centralized 24x7x365 security system, internal and perimeter security cameras, vehicle and pedestrian access control, a DIAN building with permanent staff, a branch of Bancolombia as an internal banking entity and a restaurant with a built area of 534 m2[1].
The total area of Intexzona is 84 hectares, which is 40% occupied over three stages of development, allowing 62 users to operate in the area[1].
Intexzona has a strategic location on the outskirts of Bogota. It is located 1.7 km from El Dorado International Airport, 2.2 km from the city of Bogota, at km 0 of the Via al Sol (Siberia). Its location avoids paying tolls on the North and West highways in the Cundinamarca region.
Economics
The legislation of Free Zones in Colombia establishes four types of users[3].
- In the first place, there is the operator user, which is the legal entity authorized to manage, administer, supervise, promote and develop one or more Free Trade Zones;
- Secondly, the industrial user of goods, which is the company that is installed in a free zone in order to produce, transform or assemble goods by processing raw materials or other semi-finished products;
- In third place, the industrial user of services, which is installed in the free zone to develop activities of logistics, telecommunications, scientific research, medical assistance, tourism, repair, technical support, among others;
- Finally, there is the commercial user, which develops activities of marketing, commercialization, storage or conservation of goods.
The service provided by the free zone user is not limited to a single free zone. A user operator can manage one or several free zones, just as a company can be established in multiple free zones simultaneously. However, it is not possible for the same user to have two qualifications, although it can develop activities outside the free zone area. Only users of goods and users of services enjoy customs and tax benefits. Commercial users only enjoy customs benefits.
Due to its location on the outskirts of Bogota, Intexzona is ideally situated for the provision of industrial and logistics services. With ample highways that allow it to transport goods and merchandise from the capital city, as well as access to transportation networks throughout the country, Intexzona's strategic position corresponds to its vocation as an industrial park. Intexzona and its qualified users generate around 2,000 direct jobs and 3,000 indirect jobs.
Some of the notable companies in Intexzona are:
- Scalpi: is a project-oriented company, leaders in the region in development, manufacturing and packaging of cosmetic, pharmaceutical, toiletries and industrial products, and industrial products.
- Repremundo: is an industrial user of services with a 40,000 m2 warehouse. It provides logistics, transportation, handling, distribution, packing, repacking, packaging, labeling, and other services. Some of the companies it works with are H&M, Jumbo, Metro, Alcosto and Falabella.
- Innova Fruits: Company dedicated to the agro-industrial sector. Its main activity is the processing of fruits through different transformation methods to generate an added value to its products. They work with cereals, bars, granolas, sauces, dressings, beverages, instant powdered soft drinks, ice cream, dairy products, creams and soups.
- DHL Global: is a warehouse of the well-known logistics and shipping company DHL Global, through which it is strategically positioned on the outskirts of Bogota, mainly for the import of HP and Lenovo computers.
- Fresenius Medical Care Andina: It is a company of German origin with presence in Intexzona since 2015. Its main activities are focused on research, design, development, engineering and manufacturing of products for medical treatments, as well as the provision of preventive and hospital health services. It has a 36,000 m2 warehouse.
Intexzona has the highest free zone construction index in the region, with an average occupiable area of 84.71%[1]. In addition, its response times are agile for the entry and exit of merchandise, as it has a system for approving forms in real time. Consequently, Intexzona offers personalized and constant training and consulting services for its qualified users.
Legal & Regulatory
Law 963 of 2005 establishes the legal basis for the operation of Free Trade Zones in Colombia. Together with Law 963 of 2006, which establishes the legal stability contracts through which domestic and foreign investors may invest in Free Trade Zones, they are the legal basis for the operation of this Zone.
The decrees and regulations governing the operation of Intexzona are:
- Decree 390 of 2016
- Decree 2147 of 2016
- Decree 2950 of August 2005
- Decree 4051 of October 2007
- Decree 2883 of 2008
- Decree 1165 of 2019
- Resolution 0046
The tax incentives offered by Intexzona are the single annual income tax rate of 20%, compared to 34% + 6% surtax in the rest of the national customs territory, generating savings of up to 50% to its users. In addition, sales from the national customs territory to industrial users of goods and services located in the zone are exempt from VAT. Likewise, when paying the company's income tax, the dividends of the partners are exempt from income tax. Finally, the partial processing of goods in the National Customs Territory is exempt from customs duties[1].
Customs incentives include customs extraterritoriality, exemption from customs duties for capital goods, machinery, equipment, inputs and spare parts coming from abroad. Likewise, it is possible for the exit of machinery and equipment to the customs territory of Colombia for repair as partial export for 180 days, extendable for 90 more days. Likewise, the partial nationalization of goods, as well as the storage for unlimited time of foreign goods without payment of customs duties.
In terms of competitiveness in foreign trade, the access of goods to free trade zones does not have the need to pay customs duties while they remain in the Free Trade Zone area. The rules of the Free Trade Agreement between Colombia and the United States are applied in Free Trade Zones, being able to acquire Colombian origin in the United States. It opens the possibility of carrying out processes between different Free Trade Zones, taking advantage of the benefits of other regions with Free Trade Zones.
In addition, an extra incentive is the municipal benefits. In Cota, new companies that are established in the Industrial Zone of the Municipality of Cota enjoy a one-time exemption from the Industry and Commerce tax for a period of 8 years. Likewise, they can obtain an additional benefit if 20% of their employees and operational workers, and 3% of their administrative, professional and technical personnel are Cota residents[1].
With a majority vote in all blocks of articles, last October 6, the 96 items of the tax reform of the government of Gustavo Petro, in its entirety, received the endorsement of the economic commissions of the Congress, in the first debate.
The tax reform of the government of President Gustavo Petro intends to impose maximum sales ceilings on Free Trade Zones so that they can keep their tax benefits. They also state that in a country where the level of exports is so low, it is very difficult for free zone users to quickly export 80% of their sales.
Currently, 90% of the entrepreneurs located in free trade zones are MSMEs and in order to meet the objectives of increasing their exports, they require gradual internationalization plans.
It is still too early to know exactly what effects this tax reform could have on the free trade zones. However, we must keep an eye on the possible changes that it could have and what will be the strategies used by the free trade zones in order to face these changes.
Conclusion
Intexzona is a Free Trade Zone that takes advantage of all the benefits of being located near the Colombian capital to offer a safe investment space for industrial, goods and services activities. Its competitive regime allows it to become a major player in the ecosystem of special economic zones in Colombia, with aspirations to compete with increasing strength in this market.
However, it constantly faces the challenge of offering legal stability to companies, taking into account the socio-political scenario that Colombia has experienced in recent years. Likewise, the obsolete systems of the DIAN do not allow a more agile processing of goods and merchandise that need to constantly circulate through the Free Trade Zone, compared to the systems of the customs authorities in other countries.
Despite all this, Intexzona is an investment and development magnet for Bogota and the Cota area. It is a Free Trade Zone on its way to achieving a full, systematized percentage of operations, where the production of goods satisfies the national and international market. In this way, Intexzona not only contributes to national development, but also to local and regional development, attracting development to society and the locality. Because where a Free Trade Zone progresses, the environment progresses.
You can find more about Zona Franca Intexzona on the Open Zone Map, here: https://www.openzonemap.com/SEZ/Colombia/Zona_Franca_INTEXZONA
References
- Intexzona Zona Franca Permanente S.A. https://www.intexzona.com/
- Intexmoda industrial park is a space for integration https://www.semana.com/parque-industrial-intexmoda-espacio-para-integracion/54946/
- User types https://www.intexzona.com/#text6
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