Tax Incentives: Free Trade Zones

At ICS we make sure that your project complies with the general requirements to opt for
the Free Trade Zone Regime, as well as that it is prepared to comply with the main obligations of the Regime.

ICS will be in charge of submitting the application for entry to the Free Trade Zone Regime before PROCOMER in accordance with the Free Trade Zone Regime Entry Feasibility Analysis.

Once the Free Trade Zone Regime is approved, ICS will provide initial support regarding the obligations and procedures of the Regime, as well as be prepared for any PROCOMER audit, among others, regarding the periodic obligations of the new Free Trade Zone Regime beneficiary company.

ICS will manage the incorporation of the company and the initial fulfillment of the obligations as a company and employer before the Costa Rican authorities.

ICS will accompany the company in its tax, financial and other obligations of the company.
Free Zone Regime before PROCOMER, namely:

1. Accounting preparation
2. Delivery of monthly reports, prepared in accordance with the "International Standards of Accounting and Reporting
   Financial Information".
   1. Income statement.
   2. Balance of final situations.
   3. Cash flow statements.
   4. Statements of changes in shareholders' equity.
   5. Notes to the financial statements.
   6. Accounts receivable report.
   7. Depreciation report.
   8. Bank reconciliations.
3. Filing of tax returns
   1. Monthly VAT return (D104).
   2. Monthly and annual withholding tax returns (D103 and D152).
   3. Annual Income Tax Return (D101).
   4. Annual customer and supplier tax return (D151).
   5. Procedures before the Tax Administration.
   6. Capital gains tax return (D125 and D149).
   7. Payroll preparation.
4. Assistance in the Annual Operations Report.
5. Assistance and accompaniment in PROCOMER's auditing processes.

According to the PROCOMER website of the Government of Costa Rica,

The Special Regimes are Free Trade Zone, Active Improvement and Duty Drawback. These are composed of a series of benefits and tax incentives granted by the Costa Rican Government to companies that decide to invest in the country. With the objective of showing greater competitiveness at an international level and attracting direct foreign investment.

Broadly speaking, these are the benefits that are granted to companies that qualify for
the regime:

• • Exemption on the importation of goods necessary for the operation and administration of the activity authorized to the company.

• • Exemption on the importation of motor vehicles for operation, production, administration and transportation.

• • VAT exemption on local purchases of goods or services necessary for the operation and administration of the activity authorized to the company.

• • Exemption from all taxes associated with exports.

• • Exemption for 10 years of the taxes of: Transfer of real estate and Municipal Patent.

• • Foreign remittance tax exemption (Non-residents).

• • Total income tax exemption for a term between 8 to 12 years