Business-Friendly Incentives

With the passage of Law 41 in 2004, Panama created Panama Pacifico as a special economic zone (or ‘free zone’). Special benefits are granted to all companies relocating to the area including legal, customs, immigration and labor benefits, as well as specific fiscal incentives. For some business activities, this means freedom from fiscal taxes in Panama.

In the creation of Panama Pacifico, the government realized the opportunity to bring direct foreign investment into the country, and to create new jobs for Panamanians. For these reasons, the government and the Panamanian people welcome the development as a source of new commerce and economic generation.

Any type of business that is legal in Panama may locate to Panama Pacifico. However, Law 41 created special tax advantages for certain types of business activities particularly as it relates to fiscal incentives.

Law 41 grants Panama Pacifico
businesses the following benefits:

Streamlined Processing

• A single, onsite government office fast-tracks the processing of establishing a business in the area. The ‘one-stop shop’ streamlines coordination of 12 government offices into one location, including all visas and work permits for company employees. This availability saves considerable time and money for companies.

Labor Benefits

• Guaranteed fixed overtime rates, flexible off days, the ability to operate on weekends and exceptions granted for hiring international employees beyond the national standard
• Simplified immigration processing with three-to-five year visas for employees granted on-site, foreign worker allowances, tax-free importation of personal articles, and visas for spouses, children and parents

Legal Benefits

• Companies are automatically granted the benefits of Panama’s Investment Stability Law that guarantees no business impact from government changes for ten years after registering a company onsite, including changes in tax structure and benefits

Tax Incentives
Companies locating to Panama Pacifico fall into one of three categories for taxation purposes according to Law 41. These include:

Zero Fiscal Taxes:

• Certain business activities are exempt from fiscal taxes in the Republic of Panama, including multimodal and logistics services, high-tech product manufacturing, call centers, data transmission, maintenance and repair operations for aviation, office and back office operations, aviation services, and offshore services, and others as defined in Law 41.

Limited Taxation:

• All other companies not conducting one of the activities listed above may relocate to Panama Pacifico and still receive fiscal benefits. These benefits are that the company is only required to pay certain taxes in Panama, not all the taxes they might pay if they were located elsewhere in Panama.

Specific Taxation:

• Professional service firms and retailers have specific exemptions and requirements for locating onsite.

For more information and specifics on all the benefits available at Panama Pacifico, please download the Panama Pacifico Company Benefits Outline.