Many clients frequently ask us which are the best way to establish a company in Panama, using Panama as a center or gateway to export their products to Central America, the Caribbean, and Latin America, paying the least amount of taxes for importing and exporting, and thus make the best for their business.
Panama offers a series of fiscal incentives for local and foreign investment, which is seldom seen in other countries; this, coupled with its geographic position and the use of the dollar as currency, make Panama a very attractive center for companies that seek to carry out commercial activities, using Panama as a bridge.
The Free Trade Zones in Panama offer incentives that you may require for your business. The most renowned is the Colon Free Zone, although the Export Processing Zones are also considered Free Trade Zones.
The Export Processing Zones were created by Law No. November 25th, 1992.
Defined as follows: The zones specifically set for these purposes, within which all of the infrastructure, facilities, buildings, systems, and support services are developed and operative organizations and administrative management, which is established within it, Companies from all over the World.
The Export Processing Zones may be Private or Government Owned or Mixed.
Amongst the incentives provided by the Export Processing Zones, we have the following:
- One hundred percent (100%) tax exemption and importing rights on raw materials, semi-elaborated products, purchase and importing of construction materials and equipment, machinery, refractions, tools, accessories, supplies, packaging materials, and any goods or services required for its operations.
- Income Tax Exemption
- Patent or license tax exemption
- Asset or Capital Asset tax exemption
- Movable goods transfer tax exemption on local purchases.
- Exemption on the taxes generated by dividends or interest generated by stocks, bonds, and other titles and assets issued by the companies included in the processing zone law and placed in the local or international market.
- Export tax exemption
Aside from all of the advantages mentioned earlier, it provides the executives and investors with migratory advantages to reside legally in Panama, amongst which we can mention the Export Processing Zone Investor Visa.
This visa may be requested by foreigners that have proven to have invested a minimum of two hundred and fifty thousand balboas (B/.250,000.00) from abroad in a company that is duly authorized as a promoter or operator of an Export Processing Zone or in companies that have been established in any such areas.
There is also the Visa for Personnel hired for Management Positions, Executives, Experts and/or Technicians en Companies within the Export Processing Zones; foreigners hired by the company within the Export Processing Zones may request this permit, and last, there is the Short Stay Visa for executives of the Export Processing Zones for executives that do not wish to remain in the country for a period over 9 months.
If you would like more information on the requirements for applying to establish a Free Trade Zone or the Free Trade Zones currently available, the costs, and the procedure, feel free to contact us at email@example.com.