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Panama Free Trade Zone

The Panama Free Trade Zone also called the Colón Free Trade Zone (CFZ), offers numerous benefits to international and Panamanian businesses. Panama's Law Number 18 of June 17, 1948, makes the free trade zone an autonomous institution that continues to help organizations succeed by letting them:

  • lower their tax and duty burdens
  • take advantage of affordable services that promote smart business decisions
  • access markets throughout the world easily
  • benefit from a stable banking system

Before establishing a business in the Panama Free Trade Zone, it makes sense to learn more about these benefits so you will understand how they apply to your organization.

Understanding Panama Free Trade ZonePanama Free Trade Zone Tax and Duty Benefits

Companies operating in the Panama Free Trade Zone get to take advantage of numerous tax and duty benefits. This can lower their operating costs significantly. Businesses in CFZ, for instance, do not pay any taxes on profits earned from reexportations. They also avoid all duties on exported and imported goods.

Many businesses choose to operate in the Panama Free Trade Zone because they do not have to pay taxes on the money they make. Instead, they pay fixed rates that cover the cost of:

  • permits
  • security
  • garbage collection
  • forms
  • rental space

The specific amount differs from company to company (often depending on how much space the company rents, what type of permits the company buys, and how many shipments the company receives), but the cost is usually lower than the cost of paying taxes in nearby countries such as the United States.

Rates at the Panama Free Trade Zone

Companies should understand Panama's Free Trade Zone rates to determine how much money they can save by operating there. Since the rates can differ significantly depending on a variety of factors, it makes sense for businesses to contact lawyers who specialize in companies based in Panama and the CFZ.

Some costs that businesses can expect include:

  • Annual operations permits (between $2,500 and $3,000)
  • Monthly rental tariffs
  • Garbage collection (between $30 and $120 per month)
  • Security services (between $50 and $150 per month)

Organizations often need to pay one-time payments when establishing themselves at the Panama Free Trade Zone. These expenses cover:

  • notary services
  • fiscal stamps
  • deposits for operation permits
  • deposits that secure rented lots

By paying set fees instead of taxes, organizations often save money. Perhaps even more importantly, though, they can control their expenses to maximize profits. Earning higher profits doesn't mean that companies have to pay more money. Instead, they get to keep their money. That's the true reward of making smart business decisions.

Access to International Markets

The Panama Free Trade Zone has an exceptional geographic position for businesses that want to sell goods to markets around the world. It's location next to the Panama Canal means that businesses can quickly send their goods to countries in North and South America. It also puts them on the trade routes leading to and from countries in Asia, Australia, and Europe.

Political skirmishes can get in the way international trade. This has often has a profoundly negative impact on companies that want to sell products instead of making political statements. Companies located in the United States, for instance, cannot sell items in Cuba because the American government has an entrenched disagreement with Cuba as a Socialist country.

Why should a business have to avoid markets just because of geographic location? By placing a company in the Panama Free Trade Zone, you get to avoid the negative effects of these political disagreements.

Banking and Currency Benefits of the Panama Free Trade Zone


There are several Free Trade Zones around the world, but none of them can offer the economic security of the Panama Free Trade Zone.

Panama has one of the most stable economic and political systems in Latin America. The country has its own currency, the Balboa, but it also uses American currency. That gives the economy greater stability while making it easier for companies to estimate their values. Since so many companies around the world already use the American Dollar, it makes since to follow this standard in an area that has a historic connection to the currency.

The Panama Free Trade Zone also has as one of the world's top banking industries. Many banks do business there because the Panama Canal plays such a key role in international trade. This gives CFZ businesses access to credit and banking services that can help them reach higher levels of success.

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