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Panama – Colón Free Trade Zone benefits and requirements

Updated time: Jul 28, 2018 , 12:39 (UTC+08:00)

Benefits and requirements for establishment

The Colón Free Trade Zone in Panama offers monetary, fiscal and corporate advantages to companies established in the commercial area. These benefits are as follows.

  • Tax exemption on imports, re-exports and manufacturing of goods
  • Tax exemption on re-export incomes
  • Tax exemption on invoicing
  • Tax exemption on other national or provincial taxes
  • The use of US dollars as legal currency
  • Low cost on the rent of land, buildings or any required spaces
  • The establishment of companies with licences for Multinational Companies Headquarters (MHQ*) or those authorised to operate under the special regime of City of Knowledge or Call Centres for commercial use
  • Automated trade operations
  • Migratory facilities for foreign executives
  • Digitalised security system
  • A large financial network of national and international banks
  • Office of Intellectual Property and Systems for prevention of money-laundering
  • Sale through e-commerce
  • Institution certified under ISO 9001: 2008

Any company or person that desires to be located in the Colón Free Zone can do so under one or more of the following operational plans.

  • Subscribing with the Administration under a Lot Rental Contract
  • Subscribing with the Administration under a Locale Rental Contract
  • Subscribing with the Administration under an Operations Permit Contract
  • Utilising the services of the Public Warehouse established in the Colón Free Zone

MHQ definition

An MHQ is the headquarters of a multinational company that, from Panama, carries out operations or services for their main office, subsidiary or affiliate in other countries. An MHQ can operate as a foreign company registered in Panama or as a Panamanian company, property of the transnational company.

The Law No. 41 of 2007 defines an MHQ as: “A multinational company that from Panama carries out operations that are directed to offer the services defined in this Law to their Main Office or to their subsidiaries or to their affiliates or associate companies, or if they establish their Main Office in Panama, and furthermore Business Groups. The Headquarters will always be part of multinational companies with international or regional or important operations in their origin country.”