Free Zone

The Colon Free Zone (CFZ) is located at the north end of the Panama Canal, on the Caribbean. It commenced operations in 1948 and has been operating continuously since then and has become one of the main elements in the Panamanian economy contributing about 8% of the GDP. Merchants in the Free Zone qualify for residency based on those operations, and there are many tax incentives and income tax incentives to encourage investors to consider setting up businesses here.

Businesses in the Free Zone pay no sales tax, no income tax on thier CFZ operations so long as they export 60% or more of the goods they import. Goods come into the CFZ without attracting any duty and leave without attracting any duty. There are no restrictions on becoming a merchant in the CFZ and you can do it in your personal name or in the name of a corporation.

If you don’t want to get involved in the import/export business you can still mae an investment here in a show room or an office building or warehouse and rent it out to the merchants as they need it.

Lack of room for all those seeking to set up businesses here is one of the biggest problems and although the CFZ is being expanded again, there is still not enough room.

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