FREE TRADE ZONES
The Second Largest in the World. Open for Business.
Panama operates 16 active free trade zones offering complete exemption from import and export duties, zero corporate tax on foreign operations, and expedited immigration procedures for foreign executives. For companies involved in international trade, distribution, logistics, and technology services, Panama's free trade zones are among the most powerful business structures available anywhere in the Americas.
Panama's Free Trade Zone Landscape
As of 2026, Panama has 16 active free trade zones and 6 under development, all governed by Law 32 of 2011. The two most significant are the Colon Free Zone on the Atlantic coast and Panama Pacifico on the Pacific, each serving distinct business profiles.
The Colon Free Zone
Panama Pacifico
The Colon Free Trade Zone is the largest free port in the Americas and the second largest in the world. It started operations in 1948 and occupies about 2.4 square kilometers, strategically located at the Atlantic entrance to the Panama Canal.
With over 3,000 companies either represented or operating on its complex and a massive turnover of USD 19 billion per year of imports and exports, the Colon Free Zone hosts everything from electronics from Japan, silks from Italy, and designer goods from France to clothing, jewelry, computers, and appliances from around the world.
Between 2024 and 2025, the system recorded the entry of 241 new Colon Free Zone companies, marking a milestone for management authorities. Economic activity achieved growth of 13.3% during the first quarter of 2025.
Key benefits of the Colon Free Zone:
Businesses in the Colon Free Zone are exempt from paying import duties and re-export fees. They also benefit from not having to pay income taxes on profits from foreign operations, significantly reducing taxes for companies operating in the zone.
Access to major markets across North, Central, and South America, the Caribbean, Europe, and Asia. Cost-effective operations with reduced costs for renting space and infrastructure. Expedited immigration procedures for foreign executives and investors.
Panama Pacifico Special Economic Zone, located on Panama's Pacific side at the former Howard Air Force Base, covers an area of 1,400 hectares. Companies established here operate distribution centers, conduct light manufacturing, and provide back-office and call center services. Over 160 companies, including eight Fortune 500 companies, operate in Panama Pacifico, including 3M, Dell, and BASF.
Panama Pacifico offers varied benefits including exemption from all direct and indirect taxes, an increase in the maximum number of foreign employees to 15% of the workforce, and availability of five-year investor visas rather than the usual two years available elsewhere.
Advisory No.9 acts as a coordination servicae and is not authorised to practise law or provide legal, tax, or financial advice. The contents of this website are for informational purposes only and do not constitute advice of any kind.