"Duty Free" is the key phrase to nearly all the commercial operations in the Colon Free Zone, which is an autonomous institution of the Panamanian government. It has been operating since 1953, and is now completely developed, covering an area of 144 hectares.
Currently, the Colon Free Zone is increasing its physical space by approximately 61 hectares for commercial operations and 45 hectares destined for a new industrial zone.
Companies operating in the Colon Free Zone are engaged in three types of sales operations:
1. Foreign trade operations, consisting in the re-exportation of goods from the Colon Free Zone warehouses.
2. Internal trade operations, consisting on the sales from Colon Free Zone warehouses to clients located within Panama's customs territory.
3. Direct sales, those made to foreign clients on which goods are shipped directly from the source to the interested party, without physically entering Panama.
The Colon Free Zone offers free movement of goods and complete tax exemption on imports and exports. Furthermore, firms located in the Colon Free Zone are exempt from import duties as well as from guarantees, licensing, and other requirements and limitations on imports. Due to its geographical location, the Colon Free Zone is a major factor in facilitating the supply of goods from large industrialized countries to the consumer markets in Latin America.