Colon free zone

Introduction

The Zona Libre de Colón (ZLC) is the main free zone in America. Created in June 1948, the ZLC has functioned for more than 69 years as the main business center of Latin America and the Caribbean. Its operations began in 35 hectares of a special zone near the City of Colón, with 10 companies. Currently, the ZLC is made up of nine sectors that total some 1,064 hectares and include more than 1,800 companies.

The fundamental objective of the ZLC is the promotion of international trade, protected by a framework of tax benefits where the bulk of the operations are oriented to wholesale trade, with the support of other logistics and banking activities within the area of commercial interest.

The ZLC is located at the entrance of the Panama Canal facing the Atlantic Ocean, specifically in the vicinity of the city of Colón, which makes it a focal distribution center, which supports the regional markets of Central America, South America and the Caribbean. It is supported by four ports specialized in container cargo, two cruise terminals, a railway terminal and an international airport.

Legal frame

Law 8 of April 4, 2016, which reforms the Colon Free Zone and establishes other provisions

Law 7 of April 4, 2016 which transforms and in turn adds articles to Law 29 of 1992, which adopts a special system of free port for the province of Colon in order to have a positive implementation and operation

To learn more about the laws and decrees, see: Colon Free Zone

Infrastructure

Since the Free Zone is an entity of the Panamanian state, it offers a platform for the development of commercial and logistic activities through facilities in the storage and warehouse of merchandise, lots for the construction of new infrastructures, as well as other associated services.

Expansion plans

Within the ZLC expansion plan is the project for the construction of a multipurpose logistics center. With an investment of $15 million, it would consist of an entrance with 12 access lanes and a 760-square-meter building for the entry and exit of vehicles, which would facilitate the union of the different customs, facilitating cargo transit and contributing the reduction of times and costs for entrepreneurs.

Services

The companies established in the ZLC have as their fundamental purpose the purchase and sale of merchandise at an international level, functioning as a distribution center from Asia to South America, Central America and the Caribbean. These goods can be grouped into the following categories:

Food, drinks, cigarettes and agricultural materials
Textiles, clothing and shoes
Home's products
Building materials, heavy equipment and plumbing
Machinery and other related equipment
Motor vehicles and motorcycles, their spare parts and accessories

Goods shipped from the production centers are received in large volumes duty-free, and are then repackaged, labeled, assembled, manufactured, and reshipped in small quantities to the respective customers.

There are a large number of accessible logistics services for merchants, investors and tourists:

Shipping and airline lines
Freight forwarders (cargo agents) and consolidators
Logistics operations services
Customs agents
Haulage and ground transportation
A banking platform made up of local and international banks
All necessary government services, among others.

The new modification to the law included the legal ordering of the provision of aeronautical services, which includes the storage of cargo in general, as well as services and activities associated with the repair and maintenance of aircraft.

Benefits and requirements for the establishment

The ZLC presents a set of tax, immigration, labor and corporate advantages for all companies that settle in any of its spaces. Benefits include:

Exemption from taxes on imports, re-exports and manufacturing of goods, on re-export income, on billing, and on other national and provincial taxes.
The use of the United States dollar as legal tender.
Reduced costs in renting land, buildings or other spaces.
The guarantee for the establishment of companies with a Multinational Company Headquarters License (SEM) or those authorized to operate under the special regime of the City of Knowledge or Call Centers for commercial use.
The endorsement for the establishment of Higher Education Centers and Scientific Research Centers.
The development of automated commercial operations.
Migration facilities for foreign executives.
Development of a digitized security system.
A financial network made up of a large number of national and international banks.
The support of an Intellectual Property and Money Laundering Office.
The guarantee for international sales through electronic commerce.
Institution certified under the ISO 9001 standard