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As of November 2008 it has contributed 77.9 million dollars to the economy. While commercial activities generated up to $ 1.938.9 million in transactions from January to September 2008, business operations developed as follows: 6 million 443 thousand U.S. dollars in imports, and 6 million 652 thousand in re-exports. In the year 2007 the CFZ generated $607.6 million in imports and $ 534.7 million in re-exports. The Colon Free Trade Zone registered transactions for $ 13,095 million, showing an increase of 12.1% in the first nine months of the year compared to those of 2007, which totaled 11.685.5 million. Imports amounted to 6 thousand 43.2 million dollars, an increase of 15.9% while exports amounted to 6 thousand 652.2 million dollars, an increase of 8.5% during the period under analysis. 19.1% of Panamanian exports are shipped to the United States. Venezuela and Colombia are the main export countries in the region, representing about 1,800 million dollars in transactions. Business at the CFZ has increased as a result of increased volume of re-ported goods, generating more income in both the wholesaler and the retailer internal trade. The CFZ, world trade leader, is located at the Caribbean entrance of the Panama Canal, with access to three ports in the Atlantic and one in the Pacific. The products most often imported in the CFZ are electric appliances, clothing, watches, perfumes and cosmetics, textiles, gold jewelry, liquors, and cigarettes. According to statistics, the country noted as its best clients Venezuela and Colombia due to its high purchase index. The largest importer is still Hong Kong. The CFZ generates many benefits to the national economy. The intense commercial activity that develops in this emporium has an enormous impact in the local economy, which is reflected in the contribution to the national internal product of 7.5%, reason why it is considered one of the largest pillars in the Panamanian economy. The CFZ success is due to a combination of factors such as the geographical location of Panama at the crossroads of the world, the Panama Canal, the fact that the US dollar is legal tender, a large banking center on its doorstep, a developed insurance and reinsurance industry, several state-of-the-art container ports and not very onerous business requirements. Most Free Zone merchandise is transshipped from Panama to other parts of the Western Hemisphere and Europe. Imports into the CFZ come mainly from the Far East. The largest individual supplier of the CFZ is Hong Kong (China) followed by Taiwan, United States, Japan, Korea, France, Mexico, Italy, Puerto Rico, Switzerland, United Kingdom, Malaysia and Germany. These countries supplied nearly 87 percent of all CFZ imports. Colombia is the largest buyer of merchandise, buying nearly 16 percent of all CFZ exports. Other principal buyers are Venezuela, Panama (domestic market), Guatemala, Ecuador, Costa Rica, Dominican Republic, the United States, Chile, Cuba, Honduras, Peru, Brazil, Nicaragua and El Salvador. These countries buy approximately 83% of all exports from the CFZ. The CFZ is administered as an autonomous institution of the Panamanian government. Today it is completely developed, and covers approximately 400 hectares, including 45 hectares designated as an industrial zone. The CFZ offers free movement of goods and complete exemption from tax on imports and re exports. There are no taxes on the export of capital or the payment: of dividends. In addition, there are reduced income tax rates on earnings from re-export sales. Furthermore, firms located in the CFZ are exempt from import duties as well as from guarantees, licensing, and other requirements and limitations on imports. Due to its geographic location, the CFZ is a major factor in channeling goods from large industrialized countries to consumer markets in Latin America. To view our Services in the Colon Free Zone, please Click Here The CFZ Administration is operated and managed by its Board of Directors, an Executive Committee and the General Manager of the institution. Corporations or individuals of any nationality may establish operations in the CFZ without obtaining a commercial license or investing any minimum amount of capital. Firms interested in operating in the CFZ must file an application and provide a copy of the articles of incorporation and bank references. Companies operating in the CFZ can be engaged in four types of sales operations:
Companies operating from the CFZ enjoy many trade advantages along with special tax incentives such as tax credits, depending on the number of Panamanian employees, and special income tax rates on foreign trade operations. Companies in the free zone do not pay corporate income tax. Dividends paid on profits from foreign trade operations and from direct sales are not subject to the dividend tax. Merchandise arriving at, stored in, or leaving the CFZ destined for a foreign country is exempt from taxes, charges or any type of tariff. Also, CFZ companies are not subject to any type of federal or municipal tax. There are four basic ways of doing business in the CFZ:
Projections for 2008 This increase has brought new commercial projects, such as the Colon Free Zone expansion plans. One of its most important points is the creation of a modern international airport (commercial and cargo) which will improve the old terminal at France Field. In addition, water supply system will be renewed in the City of Colon and the Free Zone. New galleys are under construction at the Free Zone in lots measuring between 2 and 13 hectares. Meanwhile, the construction of the Panama International Merchandise Mart (PIMM), a Mall with over 6,800 stores, four hotels, and a building of 600 apartments in the City of Colon will become the largest structure in Latin America. This infrastructure will be a complement to the CFZ. The Board of Directors of the Colon Free Zone approved a new procedure for the application of regulations on the prevention of money laundering and terrorism financing. Regulations / Resolution By means of Resolution of May 10, 2008 the CFZ General Management modified the implementation of the revised figure of Investment Appreciation or Lease Back, created in 1993 and regulated by Resolution No. 02-97 of March 12, 1997. This change increases the amount, forms to acknowledge construction of infrastructure investment over one million dollars, transferability of the investment credit and inclusion of the expiration figure. The General Management recommends allowing application of credit to the legal person who executes the investment in a different site other than that were infrastructure was built, provided that it is the same person, and shall keep the same monthly installments amount that corresponds according to construction area. The Business Panama Group has an alliance partner in the Colon Free Zone that is a well-known and fully licensed company with complete warehouses and logistic services in the Colon Free Zone. Our Colon Free Zone Alliance Partner will act as the representative of your corporation. We will receive the merchandise, send it to its distributors, invoice it and send you a detailed report. Together, the Business Panama Group and its alliance partner in the Colon Free Zone can provide you full services to your proposed operation in the CFZ. If you want to set up operations in the Colon Free Zone, please Click Here. For more information, please contact us at
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Most photos are courtesy of IPAT and Alfredo Maíquez |
Colon Free Trade Zone (“CFZ”) is the largest free zone in the Americas and the second largest in the world. Created in 1948, the free zone houses 1,751 merchants, receives yearly more than 250,000 visitors from all parts of the World, mainly from countries such as Haiti, Jamaica, Costa Rica, Venezuela, Colombia, United States, Ecuador, and others.