Panama

Panama’s dollarised economy rests primarily on a well-developed services sector that accounts for three-quarters of GDP. Services include operating the Panama Canal, banking, the Colon Free Zone (CFZ), insurance, container ports, flagship registry, and tourism.

The CFZ is the largest in the western hemisphere and the second largest in the world. Created in 1948, the free zone houses 1751 merchants, has more than 250,000 visitors yearly and generates exports and re-exports valued at more than $11bn annually.

For international firms that wish to improve their Latin American presence, the CFZ offers key advantages, including Panama’s ideal location for forwarding goods to Central America, South America and the Caribbean. Also, the establishment of a warehouse in the CFZ allows reception of goods and the filling of buyers’ orders from a single point and under one invoice. In addition, the presence of three main ports at both ends of the Panama Canal, a modern airport, and surface transportation to Central America – with excellent frequencies and international connections – allow orders to be shipped quickly.

The movement of funds in and out of Panama is not restricted and occurs mainly in US dollars. The net earnings on the re-export operations are exempt from income tax, as well as the dividends declared on such earnings.