Colon Free Zone

About the Colon Free Zone

Panama is considered as an attractive place for investments thanks to its special regimes areas. Such zones have established laws and regulations allowing local and foreign investors to establish companies enjoying unique fiscal, migratory and labor incentives.

The Zona Libre de Colon is the main distribution center of the Western hemisphere. For this reason, warehouses, port and traffic systems for all types of merchandise are constantly being built and modernized, keeping abreast of modern technology and always ready to offer a wide range of excellent services and a great variety of products.

The zone is highly connected to multimodal platforms. There are four container seaports in Colon, and one in Panama City on the Pacific Ocean which are interconnected by a modern railroad network providing maritime connectivity to the global market. This multimodal platform is interconnected with a road network of highways and corridors between both metropolitan cities.

Air transport connectivity is provided by Tocumen International Airport, a regional hub for major airlines covering the Americas, Europe and Asia. A new terminal has been constructed at Enrique Adolfo Jimenez Airport in Colon which aims to increase cargo movement as well as the flow of tourists and visitors.

Fiscal benefits of the Colon Free Zone

  • Exemption from taxes on imports and exports
  • Exemption from taxes on earnings from re exports
  • Income and sales tax incentives
  • Tax exemption on capital investment
  • Tax exemption on profit from operations abroad
  • 5% capital gains tax
  • 5% tax on dividends regardless of the source of income

Labor and immigration benefits of the Colon Free Zone

  • Executives, foreign investors and dependents can be granted special immigration rights (such as visas up to a maximum of 6 years)
  • Flexibility to exceed the 10% limit of foreign workers as a percentage of a company’s total workforce
  • High quality infrastructure

Requirements to operate in the Colon Free Zone

There are three options to acquire a permit to operate in the free zone, which on average takes no more than 60 days to obtain.

  • Operation License: In case of acquiring a galley or premises within the free zone, a permit may be requested to start the company’s operations. To do so, you must fill out and comply with the requirements established in this form. This option has an annual cost of US$ 2,400.00
  • Leasing premises: A 20-year lease can be purchased with the Free Zone Administration, either for a lot to build your own facilities (according to the rules established by the Free Zone Administration), or by renting an existing facility. You must fill out and comply with this form.This option has an annual cost of US$2,500
  • Represented company: An established business (generally logistics companies), is used as a representative, making arrangements for transportation, packaging, re-export, billing, storage of goods, distribution, or logistics in general. In order to establish itself under this option, the approval of the Free Zone Administration is needed, which will require the export of 60% of the goods. You must not have a lease contract to be able to opt for this option, and it is not necessary to have a physical presence in the free zone. You must fill out and comply with this form. This option has an annual cost of US$2,500

Do you need help to operate in the Colon Free Zone?

If you want to learn more about the benefits and requirements to establish your company Zona Libre de Colon, contact us today or send us a note to info@kraemerlaw.com and our team will be glad to assist you and guide you through the process.

Learn More