Page 194 - Caribbean-Central America Profile 2018

PANAMA

CARIBBEAN-CENTRAL AMERICA PROFILE 2018

COLON FREE ZONE • High technology products and manufacturing withholding or other charges applied to
The Colon Free Zone, created by Decree-Law processes foreign creditor payments including, interests,
No. 18 of 1948, is located a few kilometers • Aircraft maintenance, repair and commissions, royalties and other financial
from the Panama Canal in the Caribbean sector, reconditioning charges generated by the financing or re-
in the Colon Province and it is considered the • Transfer services to the aviation industry financing granted to companies of Panama
first Free zone in the Western hemisphere and • Offshore services Pacifico and for the financial lease of the
the second largest worldwide. • Movie-making industry equipment necessary for the development of
• Transmission of data, radio, television, the activities, businesses and operations that
Permitted Activities: audio and video take place within Panamá Pacífico.
• Exportation • Transfer of inventories between companies
• Re-exportation established in the area FREE ZONES
• Importation • Transfer of goods and services to ships, The Free Zones Law N° 32 was enacted on
• Manufacture airplanes and their passengers April 5th, 2011. This law allows zones of free
• Sale, distribution and Commercialization • Sale of merchandise destined for export not enterprise, specifically delimited, in which all
• Refining and processing of goods. manufactured in Panamá Pacífico, when infrastructures, installations, building, support
• Operations, Transactions, Negotiations or manufactured by multinationals or any other systems and services, are carried out under
Appropriate Activities incidental to establishment of its affiliates, subsidiaries or companies of criterion of maximum efficiency.
and operation of international free trade zones. the same economic group.
Permitted Activities:
Fiscal Incentives: Fiscal Incentives: • Manufacturing
• Zero taxes on Income from Operations • Exemption of any tax, levy, rate, • Assembly
abroad encumbrance or import duties on any • Processing of finished or semi-finished
• Zero taxes on the products imported for re- merchandise, product, equipment, service products
exportation or other goods in general that are introduced • Logistical services
• Highly Competitive costs into Panamá Pacífico. • Higher Education and Technology
• Exoneration of services that have effects • Exemption of Real Estate transfer Taxes and • Scientific research
abroad Services Taxes (ITBMS). • Environmental and Health services
• Exemption from any tax, duty, rate, levy • General services.
THE PANAMA PACIFICO SPECIAL or fee with regard to the movement or
ECONOMIC AREA storage of fuel or other hydrocarbon and its Fiscal Incentives:
The Panama Pacifico Special Economic Area is byproducts. • Raw materials, semi-finished products,
an area assigned for the production of goods and • Exemption on any commercial or industrial purchase and imports of equipment and
services with high added value and technology. license or registration tax. construction materials, machinery, spare
Panama Pacifico operates by means of Law 41 • Exemption from the Stamp Tax. parts, tools, accessories, consumables,
of 2004. • Exemption on the Real Estate Tax on lands packing materials and any property or
and commercial/industrial improvements, service required for their operations, will be
Permitted Activities: as well as Real Estate Transfer Tax. exempt from taxes and custom duties.
• Main Corporate Offices • Exemption of the export/re-export tax of • Income tax exemption in the lease and
• Back Office operations any merchandise, product, equipment, sublease for free zone promoters.
• Call Centers goods or services. • Service Companies, Business Logistics,
• Multimode and logistics services • Exemption of any tax, rate, duty, encumbrance, Business of High Technology, Scientific

Starting a Business - Registration Requirements:
No. Procedure Time to complete Costs
1 Hire a registered agent 1 day USD 200
2 Notarize articles of incorporation 1 day USD 75

The entry fees are the following (since July 2013):
Register at the Mercantile Division of the
3 Public Registry and pay Annual Franchise 2 days - USD 50.00 for the first USD 10,000.00 in capital stock
- 0.75 cents for each additional 1,000.00 or fraction.
Tax
The Annual Registration Tax of USD 250 must also be paid
Obtain a notice of operation (“aviso
4 de operación”) through the “Panama 1 day USD 55 for legal entities
emprende” website
Request an employers’ inscription number
5 1 day no charge
from the Social Security Administration
Source: The World Bank Group

C-36 Caribbean-Central American Action