Panama: Panama’s first digital free trade zone
The Panamanian government recently gave the green light to the establishment and operation of BPO's Panama Free Zone. The new project constitutes not only the first digital free trade zone in the Republic of Panama, but it is also being promoted as the first of its kind in the Latin American region.
The BPO's Panama Free Zone will be established and operated under the Free Trade Zone's regime (Zonas Francas), which is regulated by Law No. 32, enacted in April 2011. This special and simplified regime seeks to promote and incentivise the development of delimited areas, comprised of appropriate infrastructures for the establishment of companies from all over the world engaged in – among others – high-end technology, superior education centres, a scientific research centre, and logistic services companies. The regime also provides for a series of attractive benefits in respect to importation duties, taxes, and labour/migratory matters, not only to the promoter and/or administrator of the free trade zone, but also to the companies carrying out commercial operations thereunder.
The BPO's Panama Free Zone is expected to allow for the establishment of up to 100 local and international high-tech companies looking to provide a wide range of specialised digital services in the area such as data centres, administrative outsourcing processes, operation of global e-commerce platforms, and digital management of global value-added chains, among others. It will also have complementary facilities for the establishment of a technical institute specialised in higher education and training on technology and telecommunications. The project will have a strategic location, which provides for interconnection to the country's main logistic centres.
The BPO's Panama Free Zone will have an initial investment of approximately $10 million, with a future expansion phase which would amount to an additional investment of approximately $28 million. It also expects to contribute approximately 1,500 medium to high-level jobs.