The free zone regime was established in 1992 with the Legislative Decree 1/3. The latest amendments to the Act were adopted in 2001 with the law 1/015 and in 2002 with the Ministerial Order 750/649. The regime gives legal status to companies who automatically qualify for a set of tax and customs exemptions. The regime has the distinction of being organized as a legal unlimited geographical area. Free zone companies are divided by sector and are referred to as free companies in the industrial, commercial, services or agricultural sectors.
The main criteria for eligibility are:
- The export of all production
- Creation of substantial added value
- Compliance with environmental, health and safety regulations
- The importation or re–export after further processing or packaging of imported products can be based on a list established by the Minister responsible for the free zones.
The main benefits of the free zone are:
- Full exemption from corporate tax for the first ten years of operation and payment of a reduced rate of 15% thereafter
- Tax exemption on dividends for an unlimited period
- Right to repatriate capital and income
- Permission to have foreign currency bank deposits
- More flexible labor regulations than that provided in the Labor Code
- Imports of businesses located in these zones are exempt from all duties and taxes, direct or indirect, without an import license
- The regime also applies to duties on exports.