Law 32 of 2011 created a special, comprehensive and simplified regime for the establishment and operation of free trade zones in Panama. Unlike traditional special economic zones (Colon, Panama Pacifico), this regime allows private investors to establish free zones in any location in the country. Companies in free zones enjoy 0% income tax on external operations and exports, with labor flexibility including 25% overtime (vs. 50% standard). The promoter requires a minimum investment of B/.250,000 and at least 2 hectares of land.
Benefits
Tax Benefits
External Operations Income Tax
0%100% Income Tax exemption for external operations and transactions between free zone companies.
Dividend Tax
5%5% dividend tax regardless of operation source.
Complementary Tax
2%2% complementary tax if no dividend distribution.
Capital Tax
1%1% annual on business capital (minimum B/.100, maximum B/.50,000).
Equipment Import
0%Import tax exemption for equipment, materials and raw materials.
Labor Flexibility
Overtime
25%25% surcharge on overtime (vs. 50% standard Labor Code rate).
Weekend Work
50%50% surcharge for weekend work.
Immigration Benefits
Investor Visa
Permanent residency for investors with minimum B/.250,000 investment.
Employee Visa
Temporary residence permits for free zone company personnel.
Requirements
Promoter Requirements
- Minimum investment of B/.250,000
- Minimum land of 2 hectares
- Begin investment within 1 year of registration
- Implement worker training programs
- Comply with environmental regulations
Company Requirements
- Invest per application specifications within 1 year
- Begin operations within 2 years of registration
- Hire Panamanian workers (except foreign technical/executive staff)
- Provide technological training
- Comply with environmental and safety standards
- Submit annual statistical reports
Requirements
- Manufacturing and assembly
- Processing
- High-tech production
- Scientific research centers
- Higher education institutions
- Logistics services
- Environmental services
- Health services
- Specialized training centers
- General services
- Aviation services
Application Process
License Application
Submit application to the National Free Trade Zones Commission through the MICI Technical Secretariat.
Evaluation
The Commission evaluates compliance with all requirements established in Law 32 of 2011.
License Granting
If requirements are met, the free zone license is granted and registered in the system.
Legal Disclaimer
The information provided is for guidance only and does not constitute legal or tax advice. Consult with legal and tax advisors for your specific case. Rates and requirements may change. Source: Law 32 of 2011 and Executive Decree 62 of 2017.
Official Source
Apply NowLegal Basis
Ley 32 de 5 de abril de 2011
2011-04-05
Cited Articles
External Operations Income Tax
Overtime
Investor Visa
Equipment Import