Impuestos, UncategorizedDecember 22, 20230 comments

Law 412: Relief for Companies in the Colón Free Trade Zone

In an effort to promote the financial well-being of businesses in the Colón Free Trade Zone and stimulate the economy, innovative legislation has emerged aiming to benefit and assist those who contribute significantly to the country’s growth, aligning this law with other existing tax regimes in Panama. Law 412 of November 21, 2023, has set a milestone in fiscal legislation, offering significant relief for those who are a vital driving force behind the economy on a daily basis.

This legislation stems from a deep recognition of the importance of the Colón Free Trade Zone. With the goal of supporting the economy of the Free Trade Zone, Law 412 has been conceived to alleviate the financial pressures that often burden those who contribute their effort and dedication to national progress.

If you work in the Colón Free Trade Zone, here are 5 benefits that might interest you:

1. Exoneration of real estate tax on commercial and industrial improvements, land real estate tax on improvements, and real estate transfer taxes

This provision aims to incentivize commercial and industrial development and facilitate the transfer of real estate by exempting or reducing certain taxes related to improvements, land, and real estate transfers.

2. Exoneration of any export or re-export tax on all types of goods, products, equipment, and services

The intention behind this exoneration could be to stimulate international trade, make products and services more competitive in international markets, and promote economic growth by facilitating commercial transactions beyond national borders.

3. Exoneration of the FECI (1%) payment on loans granted to finance operations of users of the Colón Free Trade Zone

This measure aims to incentivize and facilitate the financing of commercial operations within the Colón Free Trade Zone by exempting users in this area from the obligation to pay the surcharge on loans used to support their economic activities in this specific zone. This can contribute to making investment and commercial activities in this free zone more attractive.

4. Exoneration of the transfer or alienation tax on shares of user companies in the Colón Free Trade Zone

This measure seeks to promote investment and the development of companies within the Colón Free Trade Zone by exempting the tax that would normally apply to the transfer of shares. In doing so, a more attractive environment for investment and commercial transactions is created within this specific free zone.

5. Exoneration of income tax on capital gains generated from foreign sources

This measure may aim to encourage international investment, eliminate double taxation (payment of taxes in two different places on the same income), and make it more attractive for investors or companies to generate capital gains abroad without incurring additional taxes.

With a consolidated track record, Perez y Antebi has accumulated years of specialized experience in the specific laws and regulations affecting the Colón Free Trade Zone. From segregations of commercial premises and warehouses to customs and commercial regulatory issues, the team has efficiently navigated the legal landscape, ensuring compliance for its clients and optimizing their operations within this free zone, where we have been able to advise National, International, and Important Regional Banks.

For this and more, if you require advice, we are the leading option in the field, whether to explain in-depth the benefits of the new law or to assist you in specific cases.