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Advantages of Panama Pacifico’s Special Economic Area

Panama Pacifico is part of a special economic area – or ‘free zone’ – with specific benefits that ensure the viability and success of companies that build or relocate on the site.

Advantages of the special economic area created by Tax Law 41 include:

Streamlined Process:

A single, onsite government office fast-tracks the process of establishing a business in the area. This ‘one-stop-shop’ streamlines coordination of 15 government offices into one location, including all visas and work benefits. This saves considerable time and money for companies.

Tax Benefits as listed in Tax Law 41:

Exempt from import duties (unless goods are sold within Panama)
Income tax exemption for specific business activities (see Tax Law 41 comparison download to the right)
VAT/ITMBS (sales tax) exemption for specific business activities
Dividend tax exemption for specific business activities
Exempt from withholding tax on interest income for companies in the area, and on payments made to foreign creditors
Exempt from license tax
Exempt from real estate property tax
Municipal tax stability guaranteed for 10 years from date of registry
Exempt from withholding tax on royalties paid to foreigners for specific business activities
Exempt from capital gains tax on company stock transfer
Exempt from stamp tax
Exempt from special interests compensation fund (FECI), if the loan is for foreign operations financing.

Labor Benefits

25 percent fixed surcharge for overtime
Negotiable weekly resting day
Companies may remain open on Sundays and holidays
Vacations are negotiable with employees
Fluctuation in market conditions or demand are cause for labor contract terminations
Allowance for foreign workforce of 15 percent, with exemptions made for additional hires that train Panamanians

Immigration