Wednesday, May 26, 2010

Is the Colon Free Trade Zone for you?

The Colon Free Zone was formed in 1948 with 10 companies in 38 hectares, after a 1946 feasibility study was made by U.S. free trade zone consultant Thomas E. Lyons.


About a year ago, the Management of the Colon Free Zone, together with the Inter-Oceanic Region Authority, the Directorate of Civil Aeronautics and the Maritime Authority of Panama, started an ambitious project to turn the Colon Free Zone into the largest Multimodal Logistics Center of the Americas. This project includes the development of multimodal transportation and logistics services for Free Zone in the Coco Solito, France Field and Telfers areas, covering the use of the adjacent cargo transportation centers such as the maritime ports of Manzanillo Internacional Terminal, Colon Ports Terminal, Colon Container Terminal, Panama Ports, the Panama Railroad and the Enrique A. Jimenez Airport at France Field.


At the beginning of the year 2000, representatives of each one of the entities involved in the project’s development gathered together in a meeting and approved the establishment of a technical commission to design and draw up the conceptual planning and development scheme of the areas making up the multimodal center. Apart from agreeing that there should be a conceptual plan for the reverted areas, the port, airport and railroad systems, and an integral segregated zone promoting the development of a logistics center for trade, services, transportation and industry, the project’s vision was defined, as well as the actual borders of the expansion area.

The Reasons behind the Project

The project was carried out, considering several factors that directly affected the efficiency of the center and consequently the internationalization of the production, the technological and regional economic changes. The search for an optimization of the efficiency in the means of transportation and the new modalities of world trade, are important to maintain the quality of the business undertaken in the Colon Free Zone.

The transfer of merchandise from our territory to the rest of the Americas and the rest of the world, together with strengths like our geographical position, the dollar as legal currency, the financial and insurance center, forces us to maximize all our other resources of the reverted areas, ports, highways, railroads and airports to ensure a site with excellent cargo services generated from this trade center.

The conjunction of all those indicated strengths make all users and customers of the Colon Free Zone to keep up the highest international competitive levels, reducing production, distribution, marketing and logistics costs in general and especially transportation efficiency. As a consequence, the reliability of delivery terms and the frequency of the services provided would also improve, so that this sector in the free trade, industry, transport, services and logistics zone would become the largest in the Hemisphere.

This would be an effort in enlarging and improving the currently existing facilities and infrastructure in the Colon Free Zone, by the private as well as the public sector in order to achieve a common benefit.

Other Reasons

The Colon Free Zone expansion and Multimodal Logistics Center Project is not only linked to transportation, but it is rather more of a strategy to improve the goods and services supply chain as well as looking to achieve an optimal competitive level towards the latest modalities and requirement of world trade, making the real difference between temporary users and permanent and satisfied customers.

Benefits Of The Multimodal Logistics Center
  • Development of multimodal transport for world trade.

  • Establishment of a customs storage and distribution center.

  • Installation of guard houses to check merchandise entering and leaving the Multimodal Center.

  • Establishment of Hi-Tech industries and, light manufacturing companies, taking advantage of a part of the reverted areas.

  • E-Commerce development opportunities.

  • Private investment for more than US $700 millions dollars.

  • Enhanced competitiveness upon becoming a logistical center for trade, service, industry and transport and its consequent positioning in every sphere world-wide.

  • Development of a new model strengthening international trade activities.

  • Improvement of public services and utilities.

  • Increase tourism.

  • Increase in national and foreign investment in the Colon region area.

  • Generation of thousands of jobs.


General Rules and Regulations

Pursuant to Law-Decree 18 of 1948, corporations operating in the Colon Free Zone must comply with the following requirements:

  • No minimum investment capital requirement

  • No business license required

  • The following documentary evidence is required:

Articles of Incorporation, Bank and Commercial references.

  • Employ at least five (5) local workers

  • Re-Export at least 60% of the imported merchandise

  • Pay rent in the first five days of every month.

Management will collect a surcharge at an annual rate of 10% on late payments. If the client is more than two months behinds, the Operating code, it will not be possible for the company or corporation to operate in the Colon Free Zone.

  • Report the commercial movements of all the merchandise entering and leaving the Free Zone, on the approved forms at the time of the operation.

Tax Benefits

  • 0% Tax on Export Profits

  • 0% Duties and Quotas on Imports and Exports

  • 0% Billing Duties

  • Very Competitive Costs

  • Immigration visas for executives

Importer Advantages

  • To be able purchase IN A SINGLE PLACE an excellent range of products

  • With Credit Facilities

  • With dispatching in less than 24 hours

Exporter Advantages

To have access from one site in the Heart of the Americas to consumers in:

  • The American Hemisphere

  • Europe

  • Asia

  • Africa

  • Australia

  • Ship Chandlering Services


Lease Agreement

Operating Costs:

A, C, D and E

Urbanized Areas

France Field $0.35 m2

Colon $0.50 m2

Non-Urbanized Areas

$0.20 m2

(The customer assumes the cost of urbanization. None available)

Building Lease Agreement

Operating Costs of a property in the Free Zone: A, C, D and E

Operating Costs of a private property:

A, B, C, D and E

Free Zone Property

Colon: $2.40

France Field $1.75

Coco Solo $1.65

Private Property

Rent agreed upon between the parties, authorized by the General Manager’s Office based on resolution Nº 04-92 dated 25 March 1992.

Operating Permit

Representation Agreement

Operating Costs:

A, C, D and E.


(For storage, handling, etc)

Agreed upon between the parties

Public Warehouse

Operating Costs:

Only A and E

0.5% of the merchandise’s F.O.B. value

(Freight on board)


A. Operating code (Annual) $200.00
Given to a Company in order to be able to make commercial transactions in the Free Zone

B. OPERATING LICENSE (Annual) $1,200.00
Given to a Company after its establishment in the Free Zone has been approved and all legal paperwork has been done.

C. RENT (Monthly)
Cost per square meter multiplied by the number of square meters, (depending on the area)

Minimum $ 30.00
Maximum $ 120.00

E. SECURITY (Monthly $ 30.00)

Source: Colon Free Zone

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