The Special Public Economic Development Zones (ZDEPs) in Guatemala emerged as a legal possibility after the reforms to the Law of the Santo Tomás de Castilla Free Zone (ZOLIC) were approved by a qualified majority of the Congress of the Republic in the year 2008. Notwithstanding the foregoing, and despite the existence of a regulation that initially applied, the law’s legal feasibility to create real projects did not occur until January 2019 with the approval of the Regulation for the authorization, actualization, and operation of Zones of Public Special Economic Development approved by the ZOLIC Board of Directors through agreement JD 04/05/2019.

ZOLIC is a decentralized entity that in principle operated and managed an extra customs area adjacent to the Santo Tomás de Castilla Port, and whose purpose was to promote industry and commerce in its initial operation area; however, the 2008 reforms to its ZOLIC law opened the possibility of authorizing extra customs areas in other parts of the country to assume the same task, which is to develop industry and trade.

The ZDEP’s are Extra Customs Areas* that can be constituted in any part of the territory of Guatemala, by agreement of ZOLIC. They operate under the regime established for them in the ZOLIC Law and its regulations, and are monitored in tax and customs matters by the Superintendent of Tax Administration (SAT), which means that despite being tax free areas, they should not be confused with the Free Trade Zones regulated by the Free Zones Law, nor with the free maquila regime regulated by the Maquilas Law.

*Extra Customs Areas: delimited areas within the national territory that allow entering goods or merchandise that are considered as if they were not in the customs territory, with respect to import duties and taxes.

The ZDEPs have, like ZOLIC, the purpose of promoting the industrial and commercial development of the country.  In such public development zones industrial, commercial or legal service activities may be carried out, which means they differ greatly from the Free Zones regime and Maquila, that are restricted to certain industrial and commercial operations. Therefore, ZDEPs are not established to encourage exports in particular, but in a broad way to promote development, industry, and trade in the country. However, the regulations restrict ZDEPs to minimum areas for their operation (10,000m2) or workplaces to be generated as a minimum in cases where the area of ​​operation is smaller (400m2); if the amount of the investment is considerable, exceptions can be made in terms of minimum area and parking spaces needed for the generation of work.

In order to fulfill the purpose of granting their users additional tax benefits to operate in an extra customs area, the ZDEPS are exempt from income tax for a period of 10 years from the start of their operation, which also implies exemption for the same term from the following: the Solidarity Tax, the Value Added Tax with respect to the operations carried out within the ZDEPs, customs duties and charges applicable to the import of goods to the ZDEPs, and the Tax Stamp Tax on documents that contain acts or contracts regarding goods or businesses in the ZDEPs. Additionally, the users of the ZDEPs will have the possibility that the State through any Ministry of the Executive, the municipalities or other decentralized entities may grant non-fiscal incentives, with the purpose of establishing investments in Guatemala that have a beneficial impact on the population.  Such non-fiscal incentives can be from the contribution of real estate, special rates for certain public services, complementary infrastructure, and other benefits in the power of the State that facilitate the establishment in Guatemala of relevant projects because of their impact on the economy.

The ZDEPs can operate as single-user or multi-user zones; however, once a zone’s minimum area is established, its maximum extension is not limited, permitting the inclusion of important land extensions in which different types of companies can create synergies of commerce, industry, and services.

ZDEPs, because they are extensions of ZOLIC, are administered and operated by ZOLIC. However, the law opens the possibility of establishing private ZDEP administrators that would oversee Zone maintenance and operation.

The business possibilities available through the ZDEPs are quite numerous, and with the Regulation for their authorization, actualization, and operation, Special Public Economic Development Zones issued by ZOLIC can begin to materialize. The creation of genuine development today is possible. Everything depends on the willingness of public authorities and investors to reach real public-private partnership agreements that create conditions allowing excellent investments to establish themselves in Guatemala.


Rodolfo Salazar.