Located a few kilometers from the Panama Canal, the Colón Free Trade Zone was created by Decree-Law No.18 of 1948. It is considered the first Free Trade Zone in the Western Hemisphere and the second largest in the world, supporting the development of export and import activities, manufacturing activities, re-export, sale, marketing, and distribution, among other operations and activities.
Colón’s prime location and easy access to four major ports in the Caribbean and one in the Pacific allows those who carry out their activities from Colón to access not only the Americas but also Europe, Asia, Africa and Australia, expanding in the past 60 years to more than 1,200 hectares of tax-free land. The products imported to this area are clothing, perfumes, textiles, gold, jewelry products, liquor and cigarettes generating great benefits to the national economy. Imports are mainly from China, Japan, Korea, Mexico, Italy, the United Kingdom, Malaysia, and Germany.
The Colón Free Trade Zone allows companies to save money by avoiding a lot of tax liabilities related to their business without terminating the extensive facilities and rights provided by this customs area. The tax benefits provided by the Colón Free Trade Zone are multiple:
- There is a tax exemption on imported goods for re-export.
- No fees or quotas on imports and exports.
- No taxes are paid for the services affecting other countries.
- No tax is paid by the proceeds in foreign operations. Municipal taxes are not applicable to companies operating in the Free Trade Zone.
- No taxes on capital investments.
- Low costs in the rental of land and buildings.
With over 300,000 people visiting the Colón Free Tade Zone and 2,900 companies carrying out business operations, this area requires fiscally beneficial your company meets the following requirements to operate in it:
- Being a firm legally constituted physical facilities, whether public or private. This requires creating a corporation in Panama and performing a lease or purchasing premises within the zone.
- Request A key operation that allows you to perform commercial activities directly dispatching the goods to your local ports.
- Possess bank and trade references.
- 60 % re-export the imported goods using a minimum of 5 Panamanian citizens.
Our law firm Delvalle & Delvalle provides comprehensive advice for you to establish your business in the Colon Free Trade Zone in order to enjoy the geographical, economic and fiscal benefits Panama has to offer.