Far from losing its vigor, the set of special regimes traditionally called free zones or free trade zones has gained strength as a tool to strengthen cooperation and boost its role as a catalyst for post-COVID-19 pandemic recovery. Panama is one of the countries that applies the regime and the number of zones has increased considerably in the last year, revealing an upward trend in attracting investments and facilitating foreign trade.
These are some of the conclusions that were given in the Webinar “Competitive advantages of Panama and the special regime of Free Trade Zones”, organized on Thursday (16.09.2021) by the Ministry of Commerce and Industry and the Embassy of Panama in Argentina. According to Minerva Lara Batista, a career diplomat recently accredited in Argentina, “Panama is the perfect destination for sustainable investment according to the opinion of global companies from abroad”. He noted that “The financial and banking center, broadband communications, and economic and political stability favor investors by providing them with a safe environment in which they can also take advantage of the free trade agreements that Panama has signed with various countries on different continents.”
Another point in favor of the country located on the isthmus that unites Central and South America to play an active role in the economic recovery is the good climate for doing business. The Ambassador said: “According to ECLAC, Panama is the country with the most growth in 2021 and with a double-digit projection in 2022. It has a global logistical reach through its ports and airports that make it the ideal place to invest and establish oneself.”
In that line, Winston Salterio, from PRO PANAMA, detailed the benefits offered for cooperation with Argentina and economic recovery, promoting energy transition, digital connectivity and regional integration. Also, the recovery of agroecology and agroforestry, among other sectors.
At the same time, in order to accurately understand the functioning and potential of free trade zones in Panama as tools for attracting investments, generating jobs and facilitating trade, Ambar Ruiz, General Director of Free Trade Zones, analyzed some of its dimensions in more detail.
"The Panamanian government is firm in promoting the free trade zone regime as a development strategy. The offer is wide and will depend on the commercial proposal that is to be developed.”, Dijo.
Advantages of free trade zones
Ruiz highlighted the advantages of areas of Panama such as the legal stability of investments (Law 32 of 2011), access to 1,5 billion consumers and Twenty-three free trade agreements signed that affect more than 60 countries around the world. In this line, Panama offers a Office of Commercial Intelligence (INTELCOM) -completely free of charge- through which the use of opportunities is promoted, according to tariff treatment, rules of origin and regulatory requirements in destination markets, among other matters.. “Panama is the hub of hubs: air, logistics, banking, humanitarian and integration of global value chains”, Agregó.
The Director also highlighted the three main trends of the strategy that is being seen among the Free Trade Zones, such as: relocation of companies within the region, the nearshoring (provision of these services from countries close to the contracting country) and E-commerce cross-border (more than 2.100 billion online consumers).
Today, there are a total of 17 free trade zones registered in Panama, of which Eleven are currently active. Within them, there are 113 registered companies. Most of the companies established in free zones are dedicated to foreign trade service activities. In addition, during 2021, the Government of Panama has approved the creation of six new ones free zones, in an attempt by the Executive to attract foreign investment to reactivate the economy. Ambar Ruiz explained that three of these «will be dedicated to agribusiness."
Likewise, the General Director highlighted the Free zones as important generators of employment and to this end, he outlined the regulations related to immigration and the respective incentives.
He said that the cross-cutting compliance model applied in these special areas within the territory of the National State of Panama (in which a different economic regulation applies to that of the rest of the country) contributes to the correct functioning of international trade and ensures the quality of the production processes.
Finally, the Director General of the Free Trade Zones pointed out Customs News a public policy aspect of this development tool: “As the Government of Panama, we are working responsibly and in coordination with Customs and other institutions to expedite and guarantee safe trade for the private sector.”
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.
