Howard AFB becomes Panama Pacifico

Many vets formerly stationed in Panama remember Howard AFB, named after Maj. Charles H. Howard (1892–1936), who flew in Panama during the period 1926-1929 and who had been part of the crew on a flight of B-10 bombers to Alaska in 1934. With the decommissioning of the base in 1999, Panama realized that leaving it to private enterprise was better than having any government run it, so it has become a low-tax zone for service exporters called Panama Pacifico.

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The Panama Pacifico Special Economic Area is an area assigned for the production of goods and services with high added value and technology. It is located in the former Howard Air Station. Panama Pacifico governs its relations with the Panamanian State by means of Law 41 of 2004.

Incentives are granted for the following activities:

• Corporate Main Offices
• Back Office operations
• Call Centers
  
• Multimode and logistics services
• High technology products and manufacturing through processes
• Aircraft maintenance, repair and reconditioning
• Services transfer to the aviation industry
• Offshore services
• Movie-making industry
• Transmission of data, radio, television, audio and video
• Transfer of inventories between companies established in the area
• Transfer of goods and services to ships, airplanes and their passengers
• Sale of merchandise not manufactured in Panamá Pacífico, destined for export, when manufactured by multinationals or any other of its affiliates, subsidiaries or companies of the same economic group.

Fiscal Incentives:

• Exemption of any tax, fee, tariff, encumbrance or customs duties on any merchandise, product, equipment, service and other goods in general that are introduced in Panamá Pacífico.
  
• Exemption of Transfer Taxes of Real Estate transfer and Services Taxes (ITBMS).
  
• Exemption of any tax, customs duties, tariff, fee or charge with respect to the movement or storage of fuel or other hydrocarbon and its byproducts.
  
• Exemption on any commercial or industrial license or registration tax.
  
• Exemption of the Fiscal Stamp Tax.
  
• Exemption of the Real Estate Tax on lands and commercial/industrial improvements, as well as improvements as of Real Estate Transfer Tax.
  
• Exemption of the export/re-export tax of any other type of merchandise, product, equipment, goods or services.
  
• Exemption of any tax, fee, customs duties, encumbrance, retention or other charges of similar nature applied to foreign creditor payments, for the interest, commissions, royalties and other financial charges generated by the financing or re-financing granted to companies of Panama Pacifico and for the financial lease of the equipment necessary for the development of the activities, businesses and operations that take place within Panamá Pacífico.

Labor Incentives:

• Fixed tariffs for overtime (25%) and work in laborers holidays (50%).
• Flexibility for assigning holidays to the employees.
• The companies can open on Sundays and other holidays.
• Foreign laborers: possibility to exceed the percentage rule of the Labor Code. The companies can request additional expat employees in excess of 15% if local labor is unavailable.
• Higher Education Training Center.
• Justified cause for dismissal due to losses and/or market fluctuations.

Immigration Incentives:

• The one-stop-shops of the site handles all the procedures related to visas and labor permits for their employees.
• Special visas are available investors and laborers (3 to 5 years is the standard period of time).
• The visa benefit is extended to the immediate relatives of the laborer: spouse, dependant children up to 25 years of age, dependant parents over 62 years of age.
• Introduction, only once, and tax-free of any personal and domestic belonging (up to US $ 100,000).

Important: Panama Pacifico has a One-Stop-Shop, where the process is promptly attended for the establishment of a business in the Howard area. This process joins the coordination of 15 government offices within the one sole site, and includes the paperwork of the visas and labor benefits which saves time and money to the companies.

http://www.aaeepp.gob.pa/
www.panamapacifico.com

Is the Colon Free Trade Zone for you?

The Colon Free Zone was formed in 1948 with 10 companies in 38 hectares, after a 1946 feasibility study was made by U.S. free trade zone consultant Thomas E. Lyons.

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COLON FREE ZONE MULTIMODAL LOGISTICS CENTER OF THE AMERICAS

About a year ago, the Management of the Colon Free Zone, together with the Inter-Oceanic Region Authority, the Directorate of Civil Aeronautics and the Maritime Authority of Panama, started an ambitious project to turn the Colon Free Zone into the largest Multimodal Logistics Center of the Americas. This project includes the development of multimodal transportation and logistics services for Free Zone in the Coco Solito, France Field and Telfers areas, covering the use of the adjacent cargo transportation centers such as the maritime ports of Manzanillo Internacional Terminal, Colon Ports Terminal, Colon Container Terminal, Panama Ports, the Panama Railroad and the Enrique A. Jimenez Airport at France Field.

Background

At the beginning of the year 2000, representatives of each one of the entities involved in the project’s development gathered together in a meeting and approved the establishment of a technical commission to design and draw up the conceptual planning and development scheme of the areas making up the multimodal center. Apart from agreeing that there should be a conceptual plan for the reverted areas, the port, airport and railroad systems, and an integral segregated zone promoting the development of a logistics center for trade, services, transportation and industry, the project’s vision was defined, as well as the actual borders of the expansion area.

The Reasons behind the Project

The project was carried out, considering several factors that directly affected the efficiency of the center and consequently the internationalization of the production, the technological and regional economic changes. The search for an optimization of the efficiency in the means of transportation and the new modalities of world trade, are important to maintain the quality of the business undertaken in the Colon Free Zone.

The transfer of merchandise from our territory to the rest of the Americas and the rest of the world, together with strengths like our geographical position, the dollar as legal currency, the financial and insurance center, forces us to maximize all our other resources of the reverted areas, ports, highways, railroads and airports to ensure a site with excellent cargo services generated from this trade center.

The conjunction of all those indicated strengths make all users and customers of the Colon Free Zone to keep up the highest international competitive levels, reducing production, distribution, marketing and logistics costs in general and especially transportation efficiency. As a consequence, the reliability of delivery terms and the frequency of the services provided would also improve, so that this sector in the free trade, industry, transport, services and logistics zone would become the largest in the Hemisphere.

This would be an effort in enlarging and improving the currently existing facilities and infrastructure in the Colon Free Zone, by the private as well as the public sector in order to achieve a common benefit.

Other Reasons

The Colon Free Zone expansion and Multimodal Logistics Center Project is not only linked to transportation, but it is rather more of a strategy to improve the goods and services supply chain as well as looking to achieve an optimal competitive level towards the latest modalities and requirement of world trade, making the real difference between temporary users and permanent and satisfied customers.

Benefits Of The Multimodal Logistics Center

• Development of multimodal transport for world trade.

• Establishment of a customs storage and distribution center.

• Installation of guard houses to check merchandise entering and leaving the Multimodal Center.

• Establishment of Hi-Tech industries and, light manufacturing companies, taking advantage of a part of the reverted areas.

• E-Commerce development opportunities.

• Private investment for more than US $700 millions dollars.

• Enhanced competitiveness upon becoming a logistical center for trade, service, industry and transport and its consequent positioning in every sphere world-wide.

• Development of a new model strengthening international trade activities.

• Improvement of public services and utilities.

• Increase tourism.

• Increase in national and foreign investment in the Colon region area.

• Generation of thousands of jobs.

REQUIREMENTS TO OPERATE IN THE COLON FREE ZONE

General Rules and Regulations

Pursuant to Law-Decree 18 of 1948, corporations operating in the Colon Free Zone must comply with the following requirements:

• No minimum investment capital requirement

• No business license required

• The following documentary evidence is required:

Articles of Incorporation, Bank and Commercial references.

• Employ at least five (5) local workers

• Re-Export at least 60% of the imported merchandise

• Pay rent in the first five days of every month.

Management will collect a surcharge at an annual rate of 10% on late payments. If the client is more than two months behinds, the Operating code, it will not be possible for the company or corporation to operate in the Colon Free Zone.

• Report the commercial movements of all the merchandise entering and leaving the Free Zone, on the approved forms at the time of the operation.

Tax Benefits

• 0% Tax on Export Profits

• 0% Duties and Quotas on Imports and Exports

• 0% Billing Duties

• Very Competitive Costs

• Immigration visas for executives

Importer Advantages

• To be able purchase IN A SINGLE PLACE an excellent range of products

• With Credit Facilities

• With dispatching in less than 24 hours

Exporter Advantages

To have access from one site in the Heart of the Americas to consumers in:

• The American Hemisphere

• Europe

• Asia

• Africa

• Australia

• Ship Chandlering Services

WAYS TO SET UP OPERATIONS IN THE COLON FREE ZONE
Lease Agreement Operating Costs: A, C, D and E	Urbanized Areas France Field $0.35 m2 Colon $0.50 m2 Non-Urbanized Areas $0.20 m2 (The customer assumes the cost of urbanization. None available)
Building Lease Agreement Operating Costs of a property in the Free Zone: A, C, D and E Operating Costs of a private property: A, B, C, D and E	Free Zone Property Colon: $2.40 France Field $1.75 Coco Solo $1.65 Private Property Rent agreed upon between the parties, authorized by the General Manager’s Office based on resolution Nº 04-92 dated 25 March 1992. Operating Permit
Representation Agreement Operating Costs: A, C, D and E.	Percentage (For storage, handling, etc) Agreed upon between the parties
Public Warehouse Operating Costs: Only A and E	0.5% of the merchandise’s F.O.B. value (Freight on board)

OPERATING COSTS

A. Operating code (Annual) $200.00
Given to a Company in order to be able to make commercial transactions in the Free Zone

B. OPERATING LICENSE (Annual) $1,200.00
Given to a Company after its establishment in the Free Zone has been approved and all legal paperwork has been done.

C. RENT (Monthly)
Cost per square meter multiplied by the number of square meters, (depending on the area)

D. GARBAGE COLLECTION (Monthly)
Minimum $ 30.00
Maximum $ 120.00

E. SECURITY (Monthly $ 30.00)

Source: Colon Free Zone

For more information, contact www.laglex.com

Processing Zones and City of Knowledge provide business opportunities

Panama hopes processing zones mimic maquiladoras' export success

BY LARRY LUXNER
JOURNAL OF COMMERCE STAFF

WASHINGTON -- When people talk about free- trade zones in Panama, they usually mean the Colon Free Zone -- a heavily guarded, merchandise-packed city within a city, which last year imported and re-exported $10.6 billion worth of electronics, clothing, liquor and other luxury goods.

But now, Panamanian officials are promoting a different animal, called Export Processing Zones. These sprawling industrial parks -- housed in former U.S. military buildings now being turned over to the Panamanian government -- hope to copy the success of Mexico's border-area maquiladoras, nurtured by preferential tax and duty treatment.

Speaking Wednesday to 100 potential investors at a conference in Washington, Nicolas Ardito-Barletta, administrator of Panama's Interoceanic Regional Authority, outlined his government's plans to boost the relative importance of manufacturing in Panama's service-oriented economy.

Alvaro Aguilar, a Panama City attorney attending the conference, said EPZs could also offer data-processing and database maintenance services under a draft law that Panama's Ministry of Foreign Affairs is preparing.

"It's not just apparel and sweatshops. Under this law, they'll get all the same incentives and benefits as if they were doing apparel," he said, noting that "now, with Y2K (Year 2000 computer) problems, they're hiring tons of programmers from India. Our idea is that Panama can do that, too."

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