Since colonial times, Panama has been a very important place for trading of goods from all over the world. It started in the town of Portobelo in 1597, where most of the gold from South America was shipped to Spain and all merchandise from Spain was transported to the colonies in the New World.
With the construction of the first transcontinental railroad (1855), the Panama Canal (1914) and the Colon Free Trade Zone (1948), Panama has evolved into an important transshipment center of the Americas, nowadays, serving mainly the Latin America and Caribbean region.
As an open economy, Panama enjoys low import taxes, and in the case of transshipment of merchandise and offshore operations, there is no tax imposed on companies established in our territory. It is due to the fact that Panama applies the fiscal principle of territoriality whereby the country only imposes taxes on income generated inside the territory of Panama.
Panama has five container terminals privately operated in the Pacific and Atlantic sides, which handled 6.8 millions containers in 2012, positioning Panama as the number one hub of containers of the region.
In view of the strategic location, well-known multinational corporations from Asia, Europe and America have chosen Panama as a headquarter for their regional operations.
In view of its trade liberalization policy, Panama has negotiated free trade agreements with the following countries :
In the Americas: United States, Canada, Colombia, Peru, Chile, Costa Rica, El Salvador, Guatemala, Nicaragua, Honduras, Dominican Republic, Cuba (partial agreement), Trinidad and Tobago (partial agreement). Panama is currently negotiating with Mexico and in pre-negotiation phase with member countries of the Caribbean Community (CARICOM).
In Europe: The member countries of the European Union countries as well as the member countries of the European Free Trade Association-EFTA (Iceland, Liechtenstein, Switzerland and Norway).
In Asia: Taiwan and Singapore. It is currently in pre-negotiation phase with South Korea and India.
Panama is currently a member observer of the trade bloc known as the Pacific Alliance integrated by Mexico, Colombia, Chile and Peru. After completing free trade negotiations with Mexico, Panama aims at becoming full member of this important trade agreement, which seeks to expand trade with the region of Asia Pacific.
Sources : Panama trade & Investment Agency (PROINVEX) (English & Spanish)