Special Economic Area: Colon Free Zone

Created by means of Decree Law No. 18 of 1948, The Colon Free Zone is the first distribution center of the Western Hemisphere. For this reason, there is a constant construction and modernization of the stores, ports systems and the traffic for all types of merchandise, maintaining its position at the forefront of the modern technology and always ready for offering an ample range of excellent services.

Any person or company can set up operations in the Colon Free Zone by applying to the Administration and supplying commercial and bank references, a Panamanian Government tax clearance (paz y salvo) and the articles of incorporation in the case of a company. No commercial license is required and no minimum capital investment is stipulated. The only condition is that a minimum of five Panamanians be employed.

All enterprises or person that desire to establish in the Colon Free Zone, can do so under one of the following operational plans:

  • Subscribing with the Administration a Lot Rental Contract.
  • Subscribing with the Administration, a Locale Rental Contract.
  • Subscribing with the Administration, an Operations Permit Contract.
  • Utilizing the services of the Public Warehouse established in the Colon Free Zone.

Activities Permitted:

  • Exportation
  • Re-exportation
  • Importation
  • Manufacture
  • Sale, commercialization and distribution
  • Refining and transformation of merchandise
  • Other operations, transactions, negotiations or incidental activities appropriate to establishment and operation of international free trade zones.

Fiscal Incentives:

  • ¬†¬†¬†¬†¬†¬†¬† 0% of taxes on incomes from operations abroad.
  • ¬†¬†¬†¬†¬†¬†¬† 0% of taxes on the products imported for their re-exportation.
  • ¬†¬†¬†¬†¬†¬†¬† Exoneration of specific services that have effects abroad.
  • ¬†¬†¬†¬†¬†¬†¬† Highly competitive costs.

Migratory Incentives:

  • Migratory facilities are granted for foreign executives and investors.

Ways of Establishing Operations:

  • ¬†¬†¬†¬†¬†¬†¬† Operation Permit.
  • ¬†¬†¬†¬†¬†¬†¬† Representation Agreement.
  • ¬†¬†¬†¬†¬†¬†¬† Lease of Premises.
  • ¬†¬†¬†¬†¬†¬†¬† Lease of Lot (land).
  • ¬†¬†¬†¬†¬†¬†¬† Public Storage.

Benefits and advantages to operate in the colon free zone:

  • You may easily access the following continents: America, Europe, Asia, Africa and Oceania.
  • Shipping provisioning services.
  • Highly competitive prices.
  • Migration facilities for overseas executives.
  • Credit facilities.
  • 0% share on profits resulted from operations overseas.
  • Dispatch in less than 24 hours.
  • No commercial license is required or a minimum capital of investment.

Important: The Colon Free Zone is located a few kilometers from the Panama Canal in the Caribbean sector, Province of colon and it is considered the first Free zone in the Western hemisphere and the second largest worldwide.


José Agustin Preciado

Senior Partner

José Antonio Sierra

Senior Associate

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