# Colon Free Zone

> The Colon Free Zone is the second largest free zone in the world. It offers complete exemption from import/export taxes, income from re-exports, dividends, and capital gains. Legal framework updated by Law 412 of 2023.

[Canonical page](https://investpanama.biz/en/zones/colon)

Founded in 1948, the Colon Free Zone is the second largest free zone in the world after Hong Kong. Strategically located at the Atlantic entrance of the Panama Canal, it offers privileged access to markets in the Americas, Europe, and Asia. Law 412 of 2023 modernized the regime with new benefits and legal stability.

## Key figures

- **1948** — Founded _(Source: US State Dept 2025)_
- **1,064 ha** — Total Area _(Source: US State Dept 2025)_
- **1,800+** — Companies _(Source: US State Dept 2025)_

## Benefits

- **Complete Tax Exemption** — 0% tax on import, export, re-export and operations within the zone.
- **No Capital Gains Tax** — Exemption from capital gains tax on sale of shares of user companies.