If enacted, the bill would establish new requirements with which service companies will have to comply to enter into the Free Trade Zone Regime. It also would eliminate the limit on the number of sales that a service company can have in the local market.

On December 20, 2018, the Costa Rican Executive Power submitted to Congress Bill No. 21.200 (the bill), which would amend the current Free Trade Zone Regime (Law No. 7210) to comply with Action 5 of the Base Erosion and Profit Shifting (BEPS) project of the Organization for Economic Co-operation and Development (OECD).

To establish the framework for the regime to comply with the OECD international standards without generating instability or uncertainty, the bill would:

• Establish a Strategic Eligibility Index for Service Companies (IEES, for its Spanish acronym) with which service companies will have to comply in order to enter into the Free Trade Zone Regime under Section 17.c) of the Law
• Amend Section 22 of the Law to eliminate the limit on the number of sales a service company, as defined in Section 17.c) of the Law, can have in the local market (currently at 50%)
• Eliminate the requirement to file reports on the forecast of sales in the local market by companies under Section 17.c) of the Law

If approved, the bill would enter into force three months after enacted. The Ministry of Foreign Trade and the Ministry of Finance also would have to issue regulations implementing the Strategic Eligibility Index for Service Companies within that three-month period.

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