The Colon Free Zone
With sales in excess of US$20.0 billion at the Panama free trade zone in 2010, generated by more than 2000 companies, The Colon Free Zone's (CFZ) high growth rate is a phenomenon that started 45 years ago.
Created in 1948, the free zone houses more than 2000 merchants, receives more than 250,000 visitors yearly and generates exports and re-exports valued at more than US$12.0 billion in 2010. Just minutes away from the principal port on the Caribbean side of the isthmus, the CFZ provides local manufacturers with an international market for their goods.
The CFZ success is due to a combination of factors such as the geographical location of Panama at the crossroads of the world, the Panama Canal, the fact that the US dollar is legal tender, a large banking center on its doorstep, a developed insurance and reinsurance industry, several state-of-the-art container ports and not very onerous business requirements.
Most Free Zone merchandise is transshipped from Panama to other parts of the Western Hemisphere and Europe.
Imports into the CFZ come mainly from the Far East. The largest individual supplier of the CFZ in 2010 was Hong Kong (China) followed by Taiwan, United States, Japan, Korea, France, Mexico, Italia, Puerto Rico, Switzerland, United Kingdom, Malaysia and Germany. These countries supplied nearly 87 percent of all CFZ imports in 2010. Colombia is the largest buyer of merchandise, buying nearly 16 percent of all CFZ exports.
Other principal buyers are Venezuela, Panama (domestic market), Guatemala, Ecuador, Costa Rica, Dominican Republic, the United States, Chile, Cuba, Honduras, Peru, Brazil, Nicaragua and El Salvador. These countries buy approximately 83% of all exports from the CFZ.
A commercial license is not required and there is no minimum investment required. Keeping in pace with modern times, gigantic steps are presently being taken in order to further expand operational patterns at the CFZ introducing manufacturing and assembly activities. It covers approximately 400 hectares, including 45 hectares designated as an industrial zone.
The CFZ offers free movement of goods and complete exemption from tax on imports and re-exports. There are no taxes on the export of capital or the payment of dividends. In addition, there are reduced income tax rates on earnings from re-export sales. Furthermore, firms located in the CFZ are exempt from import duties as well as from guarantees, licensing, and other requirements and limitations on imports.
For shoppers’ goods are sent in bond from the Colon Free Zone to Tocumen International Airport, where they are delivered to departing passengers. Normally they can get it there for a flight the following day.
FPB gives its clients a fast and flexible service, using a variety of instruments to access the markets.
FPB can accept many types of collaterals for a loan; from cash or real estate to securities or receivables.
