In 1992, Panama enacted Law Nº.25, by means of which it approved the establishment and development of export processing zones for the Export within the Republic of Panama.
The Export Processing Zones are defined as Frank Zones or Free Trade Zones, specifically delimited, where all the infrastructures, facilities, systems and services of support are developed, as well as the necessary administrative and operational organization, for the establishment of companies from around the world whose business is the production of goods and services for the export.
The Export Processing Zones aim to attract light manufacturing firms engaged in processing or assembling products. dedicated to the transformation of products or the assembly, mainly, of electronic products.
Although Panama faces a great competition in this sector Dominican Republic, Costa Rica and Mexico; it offers other significant incentives to the foreign investors that they allow it to compete in this sector such as the nonexistence of quotas of import quotas to the United States, besides other fiscal and labor benefits.
Fiscal advantages as:
- Total exemption from income tax.
- Total exemption from import duties on goods required for the operation of the company.
- Total exemption of tax on goods produced by the company for export .
- Total exemption of property tax.
Migratory advantages:
- Right to Temporary Resident Visa, for the term of the contract, for foreigners executive hired as staff of confidence, expert or/and experts technical executives by promoter companies or by companies established within the export processing zones.
- Right to Trader Resident Visa valid for one year, foreigners traveling to Panama to make transactions in the Export Processing Zones established or to establish in the future.
- Visas described also will be granted to the spouse and minor children and elderly dependants of the principal applicant