How can you establish an offshore company in Panama, using Panama as a gateway to export your products to Central America, the Caribbe, Latin America and beyond… paying the least amount of taxes for importing and exporting?

Panama offers a broad range of tax incentives for local and foreign investment,  seldom seen in other countries. Combined with its geographic position, and its use of the US dollar as national currency, this makes Panama a very attractive center for companies that seek to carry out commercial activities, using Panama as a ‘bridge.’

The Free Trade Zones in Panama offer incentives that might benefit your business. The most well known is the Colon Free Zone, although the various Export Processing Zones amongst others are also considered Free Trade Zones.

The Export Processing Zones were created by Law No. November 25th 1992. These zones are specifically set for export processing, within which all of the infrastructure, facilities, buildings, systems and support services are developed as well as operative organizations and administrative management. These zones are home to Companies from all over the World. Export Processing Zones may be Private or Government Owned, or Mixed ownership.

Amongst the incentives provided by the Export Processing Zones are the following:

1. One hundred percent (100%) tax exemption and importing rights on raw materials, semi-manufactured products, purchase and importing of construction materials and equipment, machinery, refractions, tools, accessories, supplies, packaging materials and any goods or services required for its operations.
2. Income Tax Exemption
3. Patent or license tax exemption
4. Asset or Capital Asset tax exemption
5. Movable goods transfer tax exemption on local purchases.
6. Exemption on the taxes generated by dividends or interest generated by stocks, bonds and other titles and assets issued by the companies that are included in the processing zone law and that are placed in the local or international market.
7. Export tax exemption

Aside from all of the advantages mentionedabove, legislation provides the executives and investors with immigration advantages so that they may reside legally in Panama; amongst which we can mention the Export Processing Zone Investor Visa.

This visa may be requested by foreigners that have proven to have invested a minimum of two hundred and fifty thousand dollars ($250,000.00) from abroad in a company that is duly authorized as a promoter or operator of an Export Processing Zone or in companies that have been established in any such areas.

There is also the Visa for Personnel hired for Management Positions, Executives, Experts and/or Technicians in Companies within the Export Processing Zones;  foreigners hired by the company within the Export Processing Zones may request this permit and last but not least there is the Short Stay Visa for executives of the Export Processing Zones who do not wish to remain in the country for a period over 9 months.