Panama is one of the world’s most powerful economic centers thanks to the Panama Canal and its free economic zones. It has a really advantageous geographic location where the two Americas and Asia meet, boasts well-thought-out corporate legislation, and has a territorial taxation principle which means that you will not pay any taxes in Panama if you generate 100% of your profits abroad. You can choose one of the country’s numerous free economic zones to take advantage of special terms and conditions for foreign entrepreneurs, and this post is fully focused on them.
If you want to discover the world of international business, banking, asset protection, tax optimization, investment opportunities, and so on, welcome to our portal InternationalWealth.Info where you will find an extensive knowledge base of related articles. You can also schedule a free meeting with our specialist to provide the details of your situation and find the best option to suit your needs. If you want to delegate all the administrative issues to experts and concentrate on your business instead, you are welcome to use the services that we provide at an affordable fee.
Free Economic Zones in Panama
There are 21 special trade and economic zones you can take advantage of in Panama, and each of them is regulated by specially elaborated laws that list the allowed activities and functions. They have been created to increase the number of companies operating in different fields to stimulate the development of production facilities and new jobs to boost the country’s economic growth.
Panamanian zones do not compete with each other as they work in different economic sectors and carry out different activities.
Colon Free Zone
This is the first free zone created in Panama, and it is the largest one in the country (and one of the largest ones in the world, too). The zone with an area of 1,400 ha is located at the entrance to the Panama Canal (on the Caribbean side). There are all kinds of transportation routes nearby: four international sea terminals, a port, two international airports, a highway, and a railroad.
The products are mainly imported from the United States, China, and Singapore, and then re-exported to Central and South America, as well as the Caribbean.
Establishing a company in the Colon Free Zones means that you will not have to pay any levies, duties, import fees, or quotas on imported goods and services, and you can expect exemption from the following taxes:
- Real estate tax
- Re-export profit tax
- Revenue tax
- Goods production, import, and re-export tax
If you receive income from external economic activity and pay dividends on it, you will be liable for a 5% tax.
Here are some extra benefits that you will surely appreciate in Colon:
- Excellent infrastructure
- A license can be provided to multi-national companies
- Rental costs are low
At the start of 2023, there were 2.379 companies incorporated in the Colon Free Zone (including such well-known ones as Calvin Klein, Fisher-Price, and Hewlett Packard) that contributed about 3.7% to the national GDP.
However, there is something in addition to purely economic benefits: the investors and companies registered here receive migration advantages and can legally reside in Panama.
Panapark
This is the largest private free zone located within 40 km from Balboa seaport and 6 km from Tocumen international airport. The top-notch infrastructure available in Panapark includes:
- Large and small industrial warehouses
- Asphalt roads
- 24/7 customs service
- Video surveillance and other security facilities
- Electricity supply (including with the help of generators and solar panels)
If your company is incorporated in Panapark, it will be exempt from the following taxes:
- Import tax
- Property tax
- Tax on the Transfer of Industrialized Goods and Services
- Income tax
- VAT
- Customs duties
You will still have to pay the dividend and capital gains taxes, but they are levied at a lower rate of 5%.
Albrook
This free economic zone mainly attracts companies that engage in production, logistics, and medium and high technologies. All office and warehouse premises here are occupied by 20 companies incorporated here as of the start of 2023. Take advantage of the standard advantages available in all Panamanian free zones:
- Tax exemption
- Excellent infrastructure
- Access to the Panama Canal
Estatal de Davis
This is a small free zone where there are just three companies engaged in assembly, production, and processing of semi-finished/ready-made products.
Marpesca/Corozal
This is a zone where companies that deal with food products and perishable goods will find top-notch infrastructure. Technological, research and development enterprises, as well as companies that provide international marketing services, will also benefit a lot from the registration in Marpesca/Corozal. There are currently 33 companies that operate here.
Chilibre
This is a small-sized zone near Albrook focused on companies that deal with medium and high technologies. It is home to only 5 companies, with 3 of these engaged in products assembly and 2 more processing semi-finished and ready-made products and rendering logistical services.
PANEXPORT
This is the first free industrial zone in Panama, and it has an advantageous location within 15 minutes from the Tocumen international airport and 30 minutes from the Balboa port. It is easily accessible using the Madden-Colon highway. Excellent infrastructure and exemption from taxes are the standard features that attract companies here.
Del Istmo
The free zone located near the Pan-American highway has an area of 14.5 ha and offers all the standard features of Panama’s FEZs, such as low taxes, immigration possibilities, and work incentives. There are just three companies here at present.
Las Americas
This zone has gathered companies engaged in the following activities:
- Logistics
- Education
- Light industry
- Research
- Assembly
- High tech
- Environmental services
- Technological and medical innovations
- Processing semi-finished/ready-made products
There is an industrial park and a business zone here.
Take advantage of the zone’s excellent infrastructure: commercial premises and warehouses, hotels, offices, and more than 1,200 parking places. Las Americas is located within several kilometers from the airport, and Caucedo seaport is within a 10-km distance from it.
This zone is home to more than 35 companies.
Would you like to register your company in one of Panama’s free economic zones? Please click on the link to get in touch with our expert and discuss the opportunity!