That is what the Colon
Free Zone is all about!
Founded in 1947 with 50
hectares of land of the City of Colon, at the entrance of the Atlantic side of
the Panama Colon, today is an emporium of 500 hectares with over 1800 companies
that operate from it, where over 14,000 people are employed.
The Colon Free Zone's
activities represent about 10% of Panama's GNP.It was created to offset the
lack of economic activity of the Atlantic City after World War II taking
advantage of the maritime route.
The Colon Free Zone is
served by three ports in the Atlantic entrance of the Panama Canal, Manzanillo
International Terminal "MIT", one of the most modern and competitive
ports in the area; The Colon Container Terminal, and the Panama Ports Company, S.
A. On the Pacific side, there is another port run by Panama Ports Company. In
terms of air transportation, the Airport of Tocumen is 80 miles from the Free
Zone where international carriers have a hub.
Finished goods arrive
from industrialized countries in the Far East, Europe and North America, mainly
by ship.
They are then
re-exported to countries in Latin America and the Caribbean. Sales amounted to
US$ 6 billion a year before the crises in Colombia, Ecuador and Venezuela.
The goods imported by
the Colon Free Zone Users (companies authorized to operate there) come into the
area free of any duties and/or tariffs. When re-exported, the buyers have the
responsibility of paying the taxes in their respective countries.
0% TAXES means that all
profits earned from re-exporting (that is sending merchandise to other
countries) are totally free of tax. Only profits made to sales to the fiscal
territory of the Republic of Panama, are subject to Income Tax.
100% OPPORTUNITIES means
that, the fiscal advantage, coupled with the strategic position of the Colon
Free Zone allows companies to store merchandise at a closer distance to their
market. As merchandise comes in containerized form and in bulk, the freight
costs are considerably cheaper.
Since the Colon Free
Zone Users serve a market of 500,000,000 consumers in the Latin America and
Caribbean markets, buyers can be served with smaller quantities, according to
their own particular markets, making a better use of their working capital.
The best example of this
symbiosis is explained the example of some medicine manufacturers, who import
medicine in bulk from two or three factories, and re-ships, after repackaging
and re-labeling in full compliance with Health Authorities, in more than 5
languages, re-exported in smaller parcels as the markets need.
There are three types of
companies that operate in the Colon Free Zone. These are Distributors, who have
a distribution contract from manufacturers to distribute their goods in certain
or all markets served.
The other one is the
Multinationals who have established their own companies in the Colon Free Zone
as logistics center serving their distributors in the region. Some of them,
such as the electronic companies, have also parts warehouses as well as
training centers for their clients.
The last one are those
companies, which offer third party logistics, service to multinationals
companies. They store, label, repack; re-ship goods according to the requests
made by the company who contracts their services.
As part of anyone's travel
in the Republic of Panama, the Colon Free Zone is a must see place!