Figures verified 7 October 2026 · Applies to: 2026 rules
Colombia’s free trade zones (zonas francas) are one of the best-known incentives in the country. Qualified users pay a 20% preferential income tax rate instead of the general 35%. For a foreign investor building a manufacturing, logistics or services operation, that headline is attractive. Three details decide whether it holds up: the internationalisation requirement, the 2023 court ruling that changed it, and what happens when profits are paid out.
The basic benefit
Companies that qualify as users of a free trade zone have historically paid corporate income tax at 20%, compared with the general 35%. Free trade zones also have their own customs and VAT treatment for goods entering the zone. The details depend on the type of zone and user, and they are beyond the scope of this article.
Ley 2277 and the internationalisation plan
The 2022 reform (Ley 2277) narrowed the benefit. To keep the 20% rate, users generally have to agree an internationalisation and annual sales plan, which in effect ties the preferential rate to income from exports. Income outside that plan is taxed at the general rate.
The Constitutional Court’s Sentencia C-384 of 2023 created an important carve-out. Users that already qualified before 13 December 2022 are grandfathered: they keep the 20% rate without needing to meet the internationalisation plan. Newer users face the plan requirement.
So the first question for any investor is when the zone user qualified. “The 20% free trade zone rate” means something different for an established user than for a new one.
The catch: dividends
This is where many investment models go wrong. A free trade zone lowers tax inside the company. When those profits are paid to a non-resident shareholder, Colombia’s dividend rules come into play:
- Dividends to non-residents carry 20% withholding.
- Profits that did not bear tax at the full corporate rate are subject to an equalising withholding when distributed, designed so that sheltered profit doesn’t leave the country without bearing the full charge.
The result, worked through in why 20% costs you 48%, is that a company-level tax benefit does not survive distribution. The shelter is deferred, not lost.
The practical lesson: the incentive and the dividend policy are one decision. A free trade zone makes most sense where profits are reinvested in Colombia for years. If the plan is to distribute everything annually, much of the benefit can disappear on the way out.
The 15% minimum tax
Since Ley 2277, companies are also subject to a 15% minimum tax on adjusted financial profit. Free trade zone users have their own considerations under this rule. Model it alongside the zone rate rather than assuming 20% is the final number. See corporate income tax and the 15% minimum tax.
ZOMAC and ZESE: mostly closed doors
You may also read about two other regional regimes:
- ZESE (special economic and social zones): the entry window closed in May 2022. DIAN Concepto 9126 of 2026 reinterpreted when the five-year benefit clock starts for existing users.
- ZOMAC (areas most affected by the armed conflict): in its final phase, ending in 2028.
Both are technically alive in 2026 but are effectively closed legacy regimes for new investors.
Questions to ask before you commit
- Is the zone user already qualified, and if so, before or after 13 December 2022?
- If new, what share of income will fall within an internationalisation plan?
- How much profit will be reinvested in Colombia, and how much distributed, and when?
- How does the 15% minimum tax interact with the projected numbers?
- Is the capital properly registered as foreign investment?
Free trade zone regimes have been the subject of reform and litigation. Confirm the position for your specific zone and user status before you model returns.
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This article is general information, not tax or legal advice. Colombian tax law changed materially between December 2025 and September 2026, and some rules described here are subject to pending legislation or litigation. Confirm your situation with a professional before acting.