Law 29 of December 30, 1992, amended by Law 7 of April 4, 2016, and Law 60 of November 5, 2018, which modified the previous ones through the Ministry of Commerce and Industries (MICI), materializes a desire of the people of Colon to offer tax and customs incentives in the 16 streets of the Old Quarter of the City of Colon and in Colon 2000. It seeks to allow Panamanians, tourists, and foreign residents in Panama, through the special regime, to make tax-free purchases in the Old Quarter of Colon at Colon Free Zone prices; excluding the collection of both the Tax on the Transfer of Movable Tangible Property and the Provision of Services (ITBMS) and the Selective Consumption Tax (ISC), in addition to granting tax credits to encourage commercial investment.
Advantages of Colon Free Port
Among the benefits of the Colon Free Port laws are:
- For tourists or transit passengers, 0% import tax and ITBMS on unlimited purchases of a wide range of products
- For Panamanians and Resident Foreigners, 0% import tax on purchases up to 1,000 dollars per semester on a wide range of products
- Attract the commercial flow of national and foreign people to the City of Colon
- Offer zero percent taxes on unlimited purchases to Tourists and zero percent import tax to nationals purchasing in Free Port businesses
- Encourage private investment in infrastructure through incentives such as preferential mortgage rates
- Strengthen job creation through the commitment to hire labor from Colon
- Rescue the culture and preserve the native aspects of the City of Colon, homologating what happened in the Old Quarter (Casco Antiguo) of Panama, both by replicating its tax incentives and in the boom it has experienced since those incentives were applied
What products can I acquire under the special regime?
Currently, there are more than 50 investors between merchants and infrastructure. Among the product categories available under the special regime are Technology, Clothing, Baby items, Bags and Purses, Footwear, Jewelry, Perfumery, Cosmetics, Shavers and Hair Clippers, Toys, Office Supplies, Home Goods, and Confectionery.
Requirements for Registration as an Investor or Merchant
Currently, Investors and Entrepreneurs must register their companies at the Colon Free Zone offices, which has a cost of $250.
- Form provided by the Executive Secretariat of Colon Free Port
- Notice of Operation
- Valid National Tax Clearance Certificate (Paz y Salvo)
- Photocopy of the personal identification card or passport, as applicable, of the company’s Legal Representative
- Public Registry Certificate (original or authenticated copy) valid for no more than three (3) months. In the case of a legal entity
- Sworn Statement by the legal representative of the company, according to the form issued by the Legal Advisory of the Colon Free Zone
- Proposal of Commitment to hire national labor from the Province of Colon, in a substantial percentage of its workers, authenticated by an Authorized Notary Public
What are the incentives for investors?
Among the benefits granted to Merchants and Importers and to Infrastructure Investors are:
Merchants and Importers
[TS_VCSC_Fancy_List list_type=»icon» marker_icon=»fas fa-angle-right» marker_position=»middle» marker_color=»#00ffee» marker_size=»18″ content_color=»#ffffff» content_align=»justify» content_size=»16″ conditionals=»eyJ2aWV3ZXJzdGF0dXMiOiJldmVyeWJvZHkiLCJyZXN0cmljdGlvbiI6Im5vbmUiLCJ1c2Vycm9sZXMiOiIiLCJ1c2Vyc2NvcGUiOiJhbnkiLCJ1c2VyY2FwcyI6IiIsIm90aGVyc2NvcGUiOiJhbnkiLCJvdGhlcnRhZ3MiOiIiLCJkZXZpY2V0eXBlcyI6IiJ9″]- Exemption from import tax for equipment and material used for their operations
- Exemption from capital tax or notice of operation
Infrastructure Investors
[TS_VCSC_Fancy_List list_type=»icon» marker_icon=»fas fa-angle-right» marker_position=»middle» marker_color=»#00ffee» marker_size=»18″ content_color=»#ffffff» content_align=»justify» content_size=»16″ conditionals=»eyJ2aWV3ZXJzdGF0dXMiOiJldmVyeWJvZHkiLCJyZXN0cmljdGlvbiI6Im5vbmUiLCJ1c2Vycm9sZXMiOiIiLCJ1c2Vyc2NvcGUiOiJhbnkiLCJ1c2VyY2FwcyI6IiIsIm90aGVyc2NvcGUiOiJhbnkiLCJvdGhlcnRhZ3MiOiIiLCJkZXZpY2V0eXBlcyI6IiJ9″]- 0% import tax on equipment and materials used to remodel or restore properties
- 0% real estate transfer tax for 2 years
- 0% property tax for 30 years
- 0% income tax for 10 years on profits
- Tax credits for financing
Where is the Secretariat of the Special System of Colon Free Port located?
Its offices are located at Local D-209, Millenium Plaza, Ahmad «Miguel» Waked Avenue in Colon City, or at its office on the 3rd Floor, Edison Plaza, Ricardo J. Alfaro Avenue in Panama City. The opening hours are Monday to Friday from 8:00 AM to 4:00 PM. The phone numbers are +507 475 4878 | +507 475-4879, Email: colonpuertolibre@mici.gob.pa