Panama - Performance Requirements and Investment IncentivesPanama - Performance Requirements
Investment Incentives
There are Special Economic Areas as the City of Knowledge, the Panama Pacifico Special Economic Area, Free Zones and the Colon Free Zone – which have special tax and other incentives for manufacturers, back office operations and call centers.
Official support for investment and business activity is especially strong for the Colon Free Zone (CFZ), the banking sector, the tourism sector, and the free zones. Companies in the CFZ pay basic user fees and a 5 percent dividend tax (or 2 percent of net profits if there are no dividends). Banks and individuals in Panama pay no tax on interest or other income earned outside Panama. No taxes are withheld on savings or fixed time deposits in Panama. Individual depositors do not pay taxes on time deposits. Free zones offer tax-free status, special immigration privileges, and license and customs exemptions to manufacturers who locate there. Investment incentives offered by the GOP are available equally to Panamanian and foreign investors. The incentives do not discriminate or distinguish between Panamanians and foreign investors.
Research and Development
The Instituto de Investigaciones Cientificas y Servicios de Alta Tecnologia (INDICASAT) is a publically and privately funded research institution that funds research in biodiversity, drug development, neuroscience, molecular and cellular biology, and clinical research.
Performance Requirements
There are no legal performance requirements such as minimum export percentages, significant local requirements of local equity interest, or mandatory technology transfer. There are no established general requirements that foreign investors invest in local companies, purchase goods or services from local vendors or invest in R&D or other facilities. Companies are required to have 90 percent Panamanian employees. Exceptions to this policy are available, but must be approved by the government on a case by case basis. Fields dominated by strong unions, such as construction, have opposed issuing work permits to foreign laborers and some investors have struggled to fully staff large projects. Foreign workers are common in Panama. Visas are available and the procedures to obtain work permits are generally not considered onerous.
Data Storage
As part of its effort to be recognized as a hub for finances, logistics, and communications in the region, Panama has committed to establishing itself as a center for data storage. According to the Panamanian Authority for Government Innovation (AIG), the majority of these firms offer services to banking and telephone companies in Central America and the Caribbean.
Panama boasts exceptional international connectivity, with five sets of undersea fiber optic cables and two more under development.
General laws addressing protection of personally identifiable information can be found in the Constitution, the Criminal Code and the Electronic Commerce legislation. The concept of the personal privacy of communications and documents is provided for in the Panamanian Constitution as a fundamental right (Political Constitution, article 29). The Constitution also provides for a right to keep personal data confidential (article 44). The Criminal Code imposes an obligation on businesses to maintain the confidentiality of information stored in databases or elsewhere, and establishes several crimes for the misuse of such information (Criminal Code, articles 164, 283, 284, 285, 286). Panama’s electronic commerce legislation also states that providers of electronic document storage must guarantee the protection, reliability and proper use of information and data stored on behalf of their customers (Law 51, July 22, 2008, article 55). Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
There are Special Economic Areas as the City of Knowledge, the Panama Pacifico Special Economic Area, Free Zones and the Colon Free Zone – which have special tax and other incentives for manufacturers, back office operations and call centers.
Official support for investment and business activity is especially strong for the Colon Free Zone (CFZ), the banking sector, the tourism sector, and the free zones. Companies in the CFZ pay basic user fees and a 5 percent dividend tax (or 2 percent of net profits if there are no dividends). Banks and individuals in Panama pay no tax on interest or other income earned outside Panama. No taxes are withheld on savings or fixed time deposits in Panama. Individual depositors do not pay taxes on time deposits. Free zones offer tax-free status, special immigration privileges, and license and customs exemptions to manufacturers who locate there. Investment incentives offered by the GOP are available equally to Panamanian and foreign investors. The incentives do not discriminate or distinguish between Panamanians and foreign investors.
Research and Development
The Instituto de Investigaciones Cientificas y Servicios de Alta Tecnologia (INDICASAT) is a publically and privately funded research institution that funds research in biodiversity, drug development, neuroscience, molecular and cellular biology, and clinical research.
Performance Requirements
There are no legal performance requirements such as minimum export percentages, significant local requirements of local equity interest, or mandatory technology transfer. There are no established general requirements that foreign investors invest in local companies, purchase goods or services from local vendors or invest in R&D or other facilities. Companies are required to have 90 percent Panamanian employees. Exceptions to this policy are available, but must be approved by the government on a case by case basis. Fields dominated by strong unions, such as construction, have opposed issuing work permits to foreign laborers and some investors have struggled to fully staff large projects. Foreign workers are common in Panama. Visas are available and the procedures to obtain work permits are generally not considered onerous.
Data Storage
As part of its effort to be recognized as a hub for finances, logistics, and communications in the region, Panama has committed to establishing itself as a center for data storage. According to the Panamanian Authority for Government Innovation (AIG), the majority of these firms offer services to banking and telephone companies in Central America and the Caribbean.
Panama boasts exceptional international connectivity, with five sets of undersea fiber optic cables and two more under development.
General laws addressing protection of personally identifiable information can be found in the Constitution, the Criminal Code and the Electronic Commerce legislation. The concept of the personal privacy of communications and documents is provided for in the Panamanian Constitution as a fundamental right (Political Constitution, article 29). The Constitution also provides for a right to keep personal data confidential (article 44). The Criminal Code imposes an obligation on businesses to maintain the confidentiality of information stored in databases or elsewhere, and establishes several crimes for the misuse of such information (Criminal Code, articles 164, 283, 284, 285, 286). Panama’s electronic commerce legislation also states that providers of electronic document storage must guarantee the protection, reliability and proper use of information and data stored on behalf of their customers (Law 51, July 22, 2008, article 55). Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.