Why Panama?

Why Panama?

Panama has a service economy with multiple tax advantages and incentives to certain productive activities.

Among the many advantages that Panama offers investors and exporters include:

  • The Registry of Industrial Property provides protection to their products and services from unauthorized use by third parties, and other fraudulent practices. The Health Registration is done in a short time allowing the rapid commercialization of its products.
  • In Panama governs the principle of territoriality, only tax the businesses that actually take place in Panama, outside the borders does not apply any tax, that is of enormous importance to the expansion of its export activity to any region.
  • Import tariffs in Panama many items have been reduced, providing more competition to their products.
  • Acquisition of U.S. $ dollar, the currency is legal tender in Panama, allowing transactions to be carried out with the motto.
  • Panama has an International Financial Centre, with over 80 banks globally recognized set, which provide all types of services you or your company can use, adding to this the “banking secrecy.”
  • The Colon Free Zone, the second global free zone, tax free.
  • Soon the Multimodal Transportation Center which integrates, rail, air, maritime and ports, streamlining the management of its load.

Another advantage is that Panama has its scheme of Corporations, internationally recognized legal instruments of great help to the foreign and domestic investors because of its extraordinary advantages which include:

  • Low cost and simplicity in processing the Constitution.
  • The Object of the company is large, a company may engage in any lawful business, from sales of any product to be financial institutions.
  • It does not take residence in Panama Panama or to form a corporation.
  • The Company can be formed without prior release of the Capital, no subscription required minimum capital.
  • Businesses can take place in Panama or anywhere in the world. As well as meetings of the Board may be conducted anywhere in the world.
  • If you wish to remain anonymous the Board issues a Power of Attorney that allows the company concerned manage without his name be entered in the Register.
  • The Company will only pay the income tax in Panama, the income from gainful activities carried out in territory outside the country do not cause tax (principle of territoriality).

Tax Incentives

Tax Incentives

In Panama, foreign and domestic investors can benefit from a series of tax incentives in various commercial areas within which we can mention the most relevant:
Colon Free Zone: Through Decree Law No. 18 of 17 June 1948, created the Colon Free Zone as an autonomous entity of the Panamanian State, within its own tax incentives in this region is important to refer business the following:

1. It is a zone free from paying any tax, contribution, tax, national, provincial.
2. All goods or other goods or negotiable entering free trade areas that owns or operates the Colon Free Zone, at all times be exempt from paying taxes, levies and other fiscal contributions, national, provincial or any other denomination, both by introducing them to such areas as their stay within them.

Export Processing Zones:
The scheme was established by Act 25 of 1992, it has lots of tax incentives such as:
1. Promoters and operators will be exempt from all national taxes.
2. Firms in export processing zones can be transferred free of liens and up to six months, semi processed raw materials to companies located outside the processing areas themselves.
3. Dividends and interest coming from securities issued by the promoters or operators in a processing zone for export are exempt from any kind of national duty.
4. On the other hand there is a special immigration regime joined the tax, which allows foreigners to be to work within a zone of this type, obtain a permanent resident visa, in that sense foreigners in this condition must be satisfied that have invested amount not to exceed B/.250.000.00 as a promoter or operator within a processing zone for export.

Call Centers:
Through Act No. 54 of 2001 provides that natural or legal persons that have a grant from the Regulatory Authority for Public Services for the provision of call center service for commercial use (Call Centers) for export may be eligible for the benefits granted by Law 25 of 1992, which establishes a special regime for the establishment and operation of export processing zones.
Special Conditions for the operation of Special Economic Area Panama-Pacific:
Law 41 of July 20, 2004 regulates the creation of this special area, which also enjoys a number of tax incentives to investors, those who went on to detail:
1. Exemption from any tax, contribution, levy or import duty on all types of goods, products, equipment, services and other general goods brought into the Panama-Pacific area, including, without limitation, raw materials, fuels and lubricants , artifacts, supplies and spare parts introduced into the Panama-Pacific area.
2. Tax exemption on the transfer of physical movable and Servicing of all types or classes of goods, products, equipment, goods, services and other general goods brought into the Panama-Pacific area, and any tax, fee or the right to provide services.
3. Exemption from payment of commercial or industrial license
4. Exemption from stamp duty
5. Exemption on commercial and industrial improvements, property tax on land and improvements.

Tourism Activity:
Law 8 June 14, 1994 regulates the promotion of tourism in Panama, in that sense, this standard gives a number of tax incentives that favor the investors in this activity, within which we can mention the following:

1. Those who invest in the construction, equipping, rehabilitation and development of public accommodation establishments, excluding land, for a minimum value of B /. 300.00.00 in the area of the city of Panama and B /. 50,000.00 in the rest of the country will enjoy the following exemptions:
a) Exemption from tax, business license
b) Tax charges for the use of docks, airports, heliports owned, built or rehabilitated by the company
c) Exemption of income tax caused by the interest earned by creditors in a loan for investment in tourist establishments.
d) Companies that invest in the development of construction activity, will be taxed at the income tax, with option to depreciate the property at a rate of 10% per year on improvements.
2. Those companies involved in tourism public transport at airports, docks and hotels, enjoy exemption from import tax for vehicles only introduced to develop such activities.
3. The yachts that visit the ports of Panama, shall enjoy an exemption on all taxes, fees and duties, provided their stay does not exceed 90 days.

Old Town:
This incentive was created by Decree Law No. 9 of 1997, a group that creates incentives for the restoration of Monumental Old Town of Panama City, in that sense, the main tax advantages in this type of activity are:
1.The investor may deduct as expenses on income tax to pay, any amounts invested in the construction, remodeling, improvement of parks, and other walls that are within the Monumental Heritage and treated.
2. The owners of buildings or buildings located in Old Town that have been rebuilt or restored, will be exempt from income tax for a period of ten years from the issuance of occupancy permit and based on profits derived lease or sell the same goods.
3. Both banks and other financial business company may grant loans under preferential interest rates to restore property located within the monuments of our city’s Old Town. In this sense, the lenders will receive a tax credit equal to the difference between the income which it received the bank or financial institution if it had granted the loan to the normal interest rate.

The incentive for reforestation activity is contained in Law 24 of November 23, 1992, regulated by Executive Decree No. 89 of June 8, 1993.
Reforestation is the planting of diverse species within an area in which there is no vegetation within its own tax benefits of this activity are the following:

1. Exemption from income tax
2. Tax credits derived from forest preferential loans
3. Property Tax Exemption
4. Import Tax Exemption.

City of Knowledge (Ciudad de Saber):
This area is a region composed of research groups and international technology, it was created by Act 6 of 1998, within the same we find the following incentives:

1. Tax exemption on the Transfer of Goods and Services Delivery (ITBMS) on inputs required for the implementation of scientific and technological activities.
2. Exemption import tax on machinery, machinery, equipment and other, which is required for the development of their activities.

Oil: The oil market is regulated by Law 8 of June 16, 1987, activity related to exploitation of hydrocarbons includes a series of tax incentives, which we shall elaborate below:

1. Companies that adopt the system of hydrocarbons, will be exempt from paying income tax on profits from their activities during the first five (5) years of production or until full recovery of initial investment, whichever occurs first.
2. Thereafter the contractor shall pay an income tax and in lieu of all other taxes on income which is subject to the contractor as a result of its operations under this type of contract, twenty-five (25%) of net production hydrocarbons.
3. Companies benefiting from the provisions of Act 8 of 1987 by the conclusion of refining, transportation or storage, may benefit from a special regime for the depreciation of their property by applying the annual depreciation percentage that the contractor deems appropriate, up to twelve and a half percent (12.5%) of the value of their machinery and equipment, as well as other depreciable real or personal property, not exceeding the residual value thereof.
4. Companies operating within the oil system may benefit from a special regime of drag losses for purposes of payment of income tax, which is that the losses incurred during any year of operation may be deducted from the taxable income of the three ( 3) years following the year in which they occurred. The deduction may be made during any of the three (3) years or averaged for the same.

Petroleum Free Zones
The Cabinet Decree No. 36 of September 17, 2003, regulates the activity of oil-free zones in Panama, within these areas there is a special tax treatment, which we mention:

1. Not cause any tax, fee, fees, levies and other fiscal contributions by reason of the entry, export or re-export of crude oil and its derivatives, as well as inputs, raw materials, additives or additives, machinery, equipment, materials, parts, containers, packaging, equipment and other property subject to enter the Free Zone Petroleum.
2. Not cause any tax, including income tax, duties, levies and other contributions, due to the sale or delivery of crude oil, semi-processed oil or who entered such areas free of oil.

Property Tax:
This tax is regulated by the Fiscal Code of Panama, in that sense there are some exemptions to this tax, which includes the Law 50 of September 30, 2004, which we will list:

1. The improvements which the building permit is issued from September 1, 2005, are exempt from paying property tax from the date of issuing the occupancy permit, according to the following table:
a) Improvements for residential use
Value of improvements exemption Year Dollars
Until B/.100, 000.00 15
Over B/100.000.00 to B/.250, 000.00 10
Over B/.250, 000.00 5
b) Other improvements:
Value of improvements Years waiver Dollars Whatever its value 10

The improvements which building permits were issued before September 1, 2005, shall be twenty years of exemption in the payment of land tax, calculated from the occupancy permit, provided that the inclusion of the improvements in the Public Register be made before August 31, 2006.
In that sense the Law 50 of 2004 defines the term upgrades and other improvements as well:

Improvements for residential use:

Those that are constructed and intended for residential use, either single family, duplexes, multifamily, condominium or any other type or form, provided that its purpose is to meet housing needs in any sector of the country.

Other improvements:
The buildings that are built and allocated to the development of commercial, industrial, agribusiness, among others.
Property Tax Payment: Our Tax Code provides that property tax for each year may be paid in three (3) installments, as follows:

1. First installment: We must make no later than April 30 of each year
2. Second installment: We must make no later than August 31 each year
3. Third Odds should be performed no later than December 31 of each year
The Tax Code provides benefits for the taxpayers of this tax, carrying out advance payments of this tax, let’s see what they are:

1. Any payments made within the first two months of the first semester or within the first month of the second and third quarter, will benefit a 10% discount.
2. This benefit will be offered to taxpayers whose property will serve as a residence.
3. In the same case referred to enjoy the discount if payment is made within three (3) months of the year when the payment is for annuities.
* First quarter: January through April
* Second Semester: May to August
* Third Semester: September to December

Panamanian Corporations

The advantages of the Republic of Panama, was established through several mechanisms, among these are:


A. Qualities

a) Simplicity in organization and administration.
b) Speed in your organization. A corporation can be organized into three or four days.
c) Low cost and maintenance organization.
d) Lack of governmental controls, except in the case of securities to be offered to public.
and) Stability of the Act The Act 32 has been amended a few times and this has been accepted in the international community.
f) allowed all kinds or types of actions, including bearer shares, which have no par value, the redeemable and those with special privileges.
g) No subscription required minimum capital.
h) They have flexible rules regarding the increase and reduction of capital.
i) registered offices are permitted without involving having to pay taxes (taxes).
j) They have flexible rules regarding the dissolution of the company.
k) are not audited change control.

B. Organization procedure.

Article 1: Two or more persons of legal age, of any nationality even though not domiciled in the Republic of Panama, may form a corporation.

These two people signed the Articles of Incorporation first private document, then be registered before a notary public of the republic, where the covenant is to a deed, to be finally registered in the Public Registry.

B.1 Incorporation.

No further demands on the Social Pact, which should contain the following information:

1 .- Name of society which can be written in any language.
2 .- General The object or objects: no need to be specific and list them exhaustively, ie, its purpose is unlimited, the company can focus on any lawful business.
3 .- The amount of share capital and the number and class of shares into which it divides. For example, if they are face value or not.
4 .- Duration of society which may be perpetual also the domicile of the corporation, which may be in Panama or any other country.
5. – The names and addresses of the Directors of the Company, who shall not be less than three, and who need not be shareholders and may be of any nationality and residents of any country (when the client demands, we can also provide directors and dignitaries nominal additional cost for a year.
6. – The names of the first officers of the Company who need not be directors and shareholders, and may be of any nationality and reside in any country. The law requires that companies have a President, a Treasurer and a Secretary, but only one person may hold more than one of those charges. Generally, managers are also dignitaries.
7. – Name and addresses of subscribers of Incorporation.

• The addresses of the subscribers and directors can be a single direction, usually the address of the lawyer, also for matters of confidentiality, the attorney with any person signs the Social Pact, and establishing a board of directors, and chiefs to meet only with formality.
• Happened this by private document before a notary public only, you give the shares to the rightful owner (ie the customer) and so this takes control of society, but without leaving his name to the public.

B.2  Statutes.

A corporation, in addition to the social compact, can take, if desired, by-laws to regulate its internal organization, but it is not mandatory. Statutes were adopted, it is not necessary to register in Panama, but to register every change made must also be registered.

The bylaws may be adopted by both the board and the shareholders’ meeting may be changed to the same body that originally approved.

Just as easily a society is also very easily be reformed social pact. This can be reformed by agreement at a meeting of shareholders or by unanimous consent of all shareholders, in which case it is necessary to hold the shareholders meeting. If you have not subscribed shares, may amend the articles of incorporation granted the original subscribers to the document.

B.3 management bodies of a joint stock company hierarchy.

Board of Directors (Directors)
Officers (President, Treasurer, Secretary)

A person can accept a number of positions, ie, Director-President (at the same time a shareholder), or Director-Secretary, President-Treasurer, etc.

B.4 Social Capital.

Every society needs a social capital to operate. Law 32 requires no minimum capital and limited to only Article 2 to require stating the amount of authorized capital, the number and the nominal value of the shares into which it divides.

It really is a purely fictional figure and that the law, unlike other countries, does not require the issue or to subscribe, let alone pay all or part of the capital, at any time. This regulatory flexibility with regard to social capital has allowed the establishment of so-called paper, which are ideal for the implementation of tax shelter transactions.

2. Advantages of Corporations:

A) The purpose of the Company (as will devote) is broad, the Act enables society to engage in any lawful business but is not similar to any of the objects specified in the Articles of Incorporation or its amendments.

B) Business can be conducted in Panama or anywhere else in the world.

C) The Panamanian law does not require a certain number of shareholders as a single person may own all the shares and therefore the Company. The owner of the Company may have a broad general power, which lets you do all kinds of activities on behalf of the Company.

D) The Panamanian law requires no minimum capital is limited to require interested parties to indicate the total value of share capital, the number and face value of the shares into which it divides, and if the Company is to issue shares no par value.

E) The Company can be formed without the capital outlay. Consequently, the Company may act without following the disbursement of funds until such funds are necessary.

F) The Directors and Officers of the Company do not need to be Panamanian, can be of any nationality and reside in any country.

G) The Board, in accordance with the Act shall be composed of at least three members, without noticing, however, maximum.

H) The meetings of the Board of a Panamanian company, can take place anywhere in the world.

I) The Company will pay only income tax in Panama, the income from gainful activities carried out in the country.

J) The Government of Panama charges $ 300.00 one-time tax dollars as the Societies Registration, payable annually within three months from the end of the annuity.
This is the only Panamanian corporate taxes that operate outside the national territory and must be paid annually to the Company shall not be deemed delinquent and the Republic of Panama, etc.
h) When used as “Holding” holding companies “that are commonly in Panama are exempt from paying taxes because its activities are limited to dividends from shares of third companies.

3. TO ORDER A corporation:

In order to provide expedited service, the Company may order by Fax, E-mail (e-mail), telephone and, at an additional cost, we can provide the documents for “courier” international in cases of extreme urgency. For new customers, we will need transfer confirmation via fax by the company’s total cost.

If the Company is applied directly to us via Fax or e-mail (which is the most common way to save costs), we suggest using the following format which should be sent only numerals and the corresponding information.


1.-Please provide a company of various objects with the following name:
a )…..
b )….. or
c )…..
With $ ________________capital, divided into common _______________financial shares U.S. $____________ each. O__________ financial shares without par value.

2 .- Directors appointed as follows:
President :      ____________________

Treasurer: ________________________

Secretary: ________________________

3. – Directors appointed by your organization: ___________

4. “I am responsible for canceling fees for the incorporation of the company and my name, title, full address and references as follows:

a) ______________________________________

b) ______________________________________

c) ______________________________________
Postal address

d) ______________________________________
Permanent Address

e) ______________________________________
Phone number

f) ______________________________________

5. “Then he (the) name (s), title (s), etc. of (s) of person (s), besides myself, authorized to impart further instruction to the signature:

a) _______________________
b) _______________________
c) ________________________

* Please provide complete list.

6. “The name, title and address of the party responsible for payment of annual fees for the resident agent, license fees and directors of his firm.
a) ________________________
b) _________________________
c) _________________________
Postal Address
d) __________________________
Permanent Address

e) __________________________
Phone Number




One of the main reasons for the use of tax shelters is to achieve a reduction in tax burden. While it is true that not all tax shelter operations are necessarily the sole or primary purpose tax minimization most of these operations themselves primarily pursue this end.

The Tax Haven Encyclopedia, referring to tax shelters jurisdictions classified as:
a) Where there are no major taxes,
b) Where taxes are imposed only on facts and goods produced or located within the country, but not on foreign source income, or
c) Where are allowed certain tax privileges or certain types of persons or events.

Panama is a prime example of the second case, ie, taxes have only territorial.


We will discuss the income tax as this tax is the higher incidence of tax shelter transactions.

The income tax in Panama is governed primarily by Title I, Book IV of the Tax Code. (Arts. 694-762) and his Regulatory Decree No. 60 of 1965.
The tax is the tax that is considered more expensive globally and in many countries achieved rates exceeding 50%.
Most of the tax shelter transactions that are intended to decrease the tax burden, they are related to the minimization of the main income tax.

Panama’s income tax is an annual charge and only net income from Panamanian sources obtained by the taxpayer regardless of the nationality or domicile.
The income tax is levied on net taxable income and therefore it is important to know the difference between net income and gross income.

Gross, as its name implies, is the total revenue received by the taxpayer on a fiscal year, such as income generated by personal work whether in the form of wages, salaries, bonuses, commissions, pensions or honorary gains in the alienation of movable or immovable property, utilities, businesses, industries, etc.

It is important to note that the Tax Code in Article 708 and other laws exempt certain income from tax and therefore these are considered non-exempt income as gross income.
Among the income exempted by section 708, the most relevant are:
• The income of people under contract with the Nation.
• Income from international maritime commerce of merchant ships in Panama.
• Interest paid on deposits are kept in banks in Panama and
• The royalty charges due from persons located in the Colon Free Zone.

In conclusion, the gross income is the total nonexempt income received by the taxpayer.
Net or taxable income for its part, is the difference or balance is to be deducted from gross income, deductible expenses and expenditures under the Act
Article 697:
“Means expenses and deductible expenses, costs or expenses incurred in producing income and in the preservation of its source.”

Once you get the net income or taxable upon it applies the tax rate which varies depending on the type of taxpayer involved.

A.1 The Income Tax and the principle of territoriality.

There are several criteria for income or income tax. Among these we have:
a) Nationality.
b) Address.
c) Territoriality.

According to the first criterion of nationality the state has the right to tax the income of citizens irrespective of the country in which it was generated.
The criterion of residence: State are taxable by the income produced by persons domiciled or resident in its territory regardless of where income is produced.
The principle of territoriality provides that only the income generated or produced within the country are taxable with the income tax (the case of Panama.
United States applies the three criteria.
This principle of territoriality is referred to in Article 694 of the Internal Revenue Code of Panama:

Article 694: “The object of the tax, the taxable income that is produced from any source within the territory of the Republic of Panama whatever the place is perceived.”

“It Panamanian source income that is produced from any source within the territory of the Republic of Panama … regardless of nationality, domicile or residence of the taxpayer or the place of conclusion of contracts …”

That is, analyzing each of the cases that make up the income tax would mean the production of income (ie, the existence of income), the originating source that income (capital or labor), and finally , where income is produced.

Thus we have incurred a capital gain in case of a nonresident of the Republic with a contract out of Panama for the use of that capital in Panama, is an asset that gives rise to income not because they come from outside but precisely because the capital has been used in Panama and to be used in Panama gave birth to their income.

Importantly, Article 694 establishes two important exceptions to the principle of territoriality, which are aimed at promoting the use of Panama as a tax shelter.

According to the article does not consider the following Panamanian source income, although strictly it are:

The principle of territoriality provides that only the income generated or produced within the country are taxable with the income tax (the case of Panama.

Our system of income tax rests on the fact that any activity that runs in Panama and a gain arising therefrom is subject to income tax.
For this reason, the cases referred to in Article 694 paragraph 2, how to run an office established in Panama individual transactions, income does not mean that these transactions occur is Panamanian, since its completion, the consummation and effects are performed outside .

A.2 Scheme Dividends: if several shareholders.

In Panama there is a tax of 10% dividend or distribute shares of participation of legal persons. The tax is paid by the company, so that the shareholder or partner is not required to include amounts received as dividends on your personal statement of income.

Under Article 733 of the Tax Code, branches of legal persons should always pay 10% on the balance of profits after paying the income tax, regardless of whether or not distributed dividends.

For the purposes of tax shelter transactions, it is important to know that as provided by Article 694 of the Tax Code, are not considered as a source Panamanian and therefore are not subject to income tax, dividend distributions of legal persons when such dividends are from non-Panamanian source income. Thus, a corporation engaged in tax shelter operations, whose income is earned outside Panama is not taxed or with the income tax or the tax on dividends.


Colon Free Zone is a segregated area, no resident population, located five kilometers from the Port of Cristobal, where you can import, store, modify, repackage and re-export the goods without customs control application.

Colon Free Zone, located on the Atlantic coast to the entrance of the Panama Canal, provides manufacturers, exporters and distributors in North and South America, Europe and the Far East, an area for the mobilization of their products to other markets Western Hemisphere.

The magnificent geographical position of the Free Zone offers the possibility of easy distribution of goods and products of all kinds. When operating in the Free Zone, foreign companies often cut in one more months, the delivery of goods to countries of America, which means faster service and additional revenue and that operating on the basis of economies of scale are reduced operating costs.

The growth and development of the Colon Free Zone has been steady since opening to international trade is the largest free zone in the western hemisphere and second in the world, surpassed only by Hong Kong.

A. Activities allowed in the Colon Free Zone. 

According to the 40th article of the Decree-Law 18 of 1948 in the Free Zone users can “… store, display, pack, unpack, manufacture, package, assemble, assembling, refining, purifying, mixing, transforming, and generally operate and manipulate all sorts of goods, products, raw materials, packaging and other effects of trade with the sole exception of items whose importation is prohibited under the laws of the Republic. ”

In recent years there has been emphasis on the development of the maquiladora assembly industry and in the Colon Free Zone, is the reflection of this Decree 5 of 1979 which gives incentives to the industry.

B. Requirements and ways of operating in the Colon Free Zone.

In harmony with the generosity of Panamanian law on commercial, natural or legal person, whether natural or foreign, can operate in the Colon Free Zone, and therefore does not need commercial or industrial license or a minimum of capital to invest, these facilities are, of course, ways to encourage and attract both domestic enterprises and international to be established in the Free Zone.

One of the few limitations imposed by law on the Free Zone is to require that any company operating there must guarantee employment Panamanian least ten workers on the other hand the Panamanian legislation provides the necessary conditions for entry and stay of executives of foreign companies operating in the Free Zone.

In order to operate in the Free Zone is required only the approval of the institution, for which the individual must submit to the Administration an application must be accompanied by the following tests:

a) Document that proves the case of a natural person or legal entity.
b) Corporate Social Compact and its subsequent amendments.
c) Letters of bank and business references.
d) National Peace and except in the case of a Panamanian company.

After the submission of documents, the Free Zone administration studies the request and decide whether or not you are allowed to the person seeking to settle in the Free Zone.

If approved there are four different ways of operating:
1) Rental of land
2) Direct method.
3) By the representation.
4) Public Storage.

1) Rent of land: With the rent of land of the Free Zone, the company can build warehouses or buildings for private use. These contracts are awarded for a period of 20 years, but the rent is paid monthly. The company is obliged to re not less than 60% of the goods.

2) Hire a local institution: companies choosing this form are committed to keeping the premises open during business hours and re-export at least 60% of its goods.

3) Representation: this mode of operation is through arrangements with a company based in the Free Zone, for this act as a representative of the other.
This form is conditional on the company representative shall act only as custodian of the goods that it can, among other things, make the transportation of goods, prepare, process documentation of receipt and dispatch, billing and accounts receivable on behalf of represented company.

The company represented in this way keeps the title to the goods. The cost of representation is fixed by agreement between the parties, and in some cases is determined based on agreements on volume or weight of goods entered or cleared.
Representation agreements must have the authorization of the administration of the Free Zone, since they were also applies the requirement of at least 60% of export.

4) Public Storage: it is through the use of public deposits which handles the administration. With these deposits the merchant receives, stores, and operates its goods in the same way as any other company stores established in the Free Zone, having to pay only a base rate established in the space used.

a. Step Marketing:

Four different types of commercial transactions:
1. Import: allowed the entry of any non-restricted import goods in Panama. Goods brought into the Free Zone are not subject to import tax, and is not necessary either to present the consular invoice issued by the Panamanian Consul in the port of entry. Simply the filing of the bill of lading and commercial invoice. In order for the goods can be introduced to the Free Zone, it must be consigned to a house or her legally established company.
2. Re-export the goods leave the Free Zone, as a rule, are not subject to export taxes, exports are made through the form of “exit” of the Free Zone Administration. Not require copies of invoices or shipping documents of the goods, and exports are not subject to special licenses.
3. Transfer: Transfers are permitted goods lawfully within the Free Zone between persons or companies established in the area.
4. Symbolic Output: This allows billed from the Free Zone a product that comes straight from the factory or the importer wholesalers, without the product physically pass through the Zona Libre, using the input and output documents symbolic , What is known as Transfer Pricing.


The expansion of transnational companies which occurred after the second world war, created a significant demand for money, which originated from the need to finance business growth.

The banks of developed countries was and is the one with the ability to meet these demands massive capital, was, at that time, limited in their efforts to meet this need, and that strict controls on it weighed and reservations about the transfer of their currencies to foreign markets.

To meet these demands frequent global financial capital, traditional banks in developed countries have set up branches in other countries with more favorable laws, thus creating the so-called International Financial Centers, whose primary function is to serve geographical extension centers traditional banking such as New York and London.

Deposits held at these financial centers known generically as Eurodollars, and these have facilitated the creation of international currency markets not subject to strict exchange controls.

In most cases, these financial centers have emerged in countries considered tax havens, since they offer flexible lax laws that allow freedom of operation and reducing operating costs.

Among the more tax shelters used by international banks have to Bahamas, Cayman Islands, Panama, Singapore and Hong Kong.
A study by the Internal Revenue Administration of the United States, referring to the use of tax havens by U.S. banks was expressed as follows:

“Today, most major banks have branches in the Bahamas, and Cayman Islands. They are there primarily to participate in the Eurodollar market free from any control by the United States. Regularly, these foreign branches taking deposits and providing in turn to international and multinational clients.
These transactions could be made in the United States, but the deposits would be subject to reserve requirements imposed by the Federal Reserve. According to these requirements, a portion of the deposits should be held without being able to be provided and consequently, on this portion will produce income. Thus, it is more advantageous to operate in international financial centers in that there can be provided the percentage of deposits that you want … ”

The Panamanian banking legislation offers great facilities and incentives for the establishment of foreign banks in our country.

What does that Panama is considered an International Financial Center?

1) Liberal legislation regarding the treatment of productive factors (capital and labor) of foreign origin.
2) Special legislation on the formation of limited liability companies in particular.
3) Existence of the Colon Free Zone.
4) Monetary and banking system.
5) Tax legislation.
As for the treatment of factors of production (point 1) is enshrined even in the Constitution, to the extent that there is no discrimination was formalized in the capital untimely and foreign labor on capital and domestic labor.
Articles 20, 68,242,244 and 253 of the Constitution are explicit provisions to ratify the above statement.
In this regard, Article 244 of the Constitution allows the creation of private utilities with majority of the Panamanian capital, allowing the same article the possibility of exceptions to this general rule itself, as long as the Act defines it.

Article 252 of the Constitution, the exercise allows foreign wholesale trade without any restrictions.
As for the retail provides that it is reserved for Panamanian-born and naturalized citizens, but allows it to exercise foreign natural and legal persons not authorized to engage in retail trade, a stake in companies that sell products manufactured for themselves.

The banking law, monetary and banking system of Panama is very broad, allowing the existence of banks in very flexible and a wide possibility of operations in Panama.

Its general scheme established by Cabinet Decree 238 of July 2, 1970 which among other things created the National Banking Commission, composed of seven members, three private banks.

This decree gives the Banking Commission of some monetary policy instruments tailored to the special nature of the Panamanian banking system, characterized in particular by the absence of a central bank.

These instruments are essentially variable fit him, he contingency credit system and the power to regulate the interest rate applicable to certain operations of banks.