With the Canal as the driving force of the economic activity, Panama is rapidly becoming a first class transshipment center, transporting goods to and from every possible destination worldwide.
New regional dimension has been added to our service-based economy, through the success of the Colon Free Zone, the international financial service center, and the Panama Canal.
With the reversion of the Panama Canal and all the land and buildings that surround it, new commercial and investment opportunities became available. Already 14,000 vessels transit the Canal each year, moving some 190 million tons per year of cargo and transporting some 700,000 passengers and crew.
There is opportunity in shipyards and maintenance facilities, container ports, cruise ships terminals, and maritime services in general.
In terms of our existing infrastructure, we have 22 ports, 10 of which are managed by the Panama Maritime Authority, through the General Directorate of Ports and Maritime Ancillary Industries, fundamentally small ports that service international and coastal navigation. The remaining 12 ports are managed and operated through private entities that develop their activities under the supervision of this General Directorate , through Harbor Masters’ Offices located on the Atlantic and Pacific. Five container ports, four on the Atlantic and one on the Pacific entrance to the Panama Canal, are operated by some of the world’s largest port operators such as Hutchinson Wampoa, Evergreen and Stevedoring Services of America. With a total investment of over $670 million dollars, we are moving annually some 2.4 million TEUs containers.
To complete the system of multimodal transportation on the Isthmus, the Transcontinental Railroad, which runs parallel to the Panama Canal, has also been privatized and is run by Kansas City Southern Rail and Mi-Jack Products, both U.S. companies, which have invested over US$ 50 million in its modernization. The Transcontinental Railroad moves about 95,000 passengers and has the capacity to move 500,000 containers per year, becoming an important alternative to cargo movement in the continent.
In the industrial sector, Panama offers special tax and fiscal incentives for export processing zones under Law No. 25 to promote investments in manufacturing. For companies operating in an export processing zone, there are no direct or indirect income taxes, no tariffs on the purchase of equipment or raw materials and no taxes on the repatriation of profits.
The Colon Free Zone, another important element of our service economy is becoming, more than a traditional trade zone, a global logistics center for the world. It is the second biggest free trade zone in the world after Hong Kong, and it is the most important one in the Americas. Annual trade activity is more than US$12 billion dollars in transactions.
Today, a large number of companies benefit from all the services and facilities offered by the Colon Free Zone, under a special tax system where profits earned abroad or derived from offshore operations are exempt from tax. Please notice that in order to set up a company in Panama, the services of a licensed attorney residing in Panama are required. For lawyers’s references, please contact the National Association of Law Attorneys in Panama.
The Colon Free Zone has 400 hectares and more than 2,000 established and represented businesses with 19,000 employees, and 250,000 annual visitors, which reflects its success after almost 60 years of experience and leadership in international trade. In 2005 for example, the import activity was US$ 5,807.9 million while the re-export activity amounted to US$ 6,473.3 million.
Regarding foreign trade, in 1997 Panama became a member of the World Trade Organization (WTO). Current negotiations are taking place with U.S. and several Central American countries over free trade agreements, and we have negotiated trade agreements with El Salvador, Taiwan, Singapore and Chile. In addition, we are actively participating in the hemispheric negotiation process towards a Free Trade Area of the Americas (FTAA) for which Panama served as the headquarters for the administrative offices between the years 2001 and 2003.
To see Foreign Trade Economic Indicators, please click here.
Panamanian companies’ directory
Directory of Panamanian Exporters (English)
Members of Panamanian Association of Exporters (APEX) (Only Spanish)