Howard AFB becomes Panama Pacifico

Many vets formerly stationed in Panama remember Howard AFB, named after Maj. Charles H. Howard (1892–1936), who flew in Panama during the period 1926-1929 and who had been part of the crew on a flight of B-10 bombers to Alaska in 1934. With the decommissioning of the base in 1999, Panama realized that leaving it to private enterprise was better than having any government run it, so it has become a low-tax zone for service exporters called Panama Pacifico.

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The Panama Pacifico Special Economic Area is an area assigned for the production of goods and services with high added value and technology. It is located in the former Howard Air Station. Panama Pacifico governs its relations with the Panamanian State by means of Law 41 of 2004.

Incentives are granted for the following activities:

• Corporate Main Offices
• Back Office operations
• Call Centers
  
• Multimode and logistics services
• High technology products and manufacturing through processes
• Aircraft maintenance, repair and reconditioning
• Services transfer to the aviation industry
• Offshore services
• Movie-making industry
• Transmission of data, radio, television, audio and video
• Transfer of inventories between companies established in the area
• Transfer of goods and services to ships, airplanes and their passengers
• Sale of merchandise not manufactured in Panamá Pacífico, destined for export, when manufactured by multinationals or any other of its affiliates, subsidiaries or companies of the same economic group.

Fiscal Incentives:

• Exemption of any tax, fee, tariff, encumbrance or customs duties on any merchandise, product, equipment, service and other goods in general that are introduced in Panamá Pacífico.
  
• Exemption of Transfer Taxes of Real Estate transfer and Services Taxes (ITBMS).
  
• Exemption of any tax, customs duties, tariff, fee or charge with respect to the movement or storage of fuel or other hydrocarbon and its byproducts.
  
• Exemption on any commercial or industrial license or registration tax.
  
• Exemption of the Fiscal Stamp Tax.
  
• Exemption of the Real Estate Tax on lands and commercial/industrial improvements, as well as improvements as of Real Estate Transfer Tax.
  
• Exemption of the export/re-export tax of any other type of merchandise, product, equipment, goods or services.
  
• Exemption of any tax, fee, customs duties, encumbrance, retention or other charges of similar nature applied to foreign creditor payments, for the interest, commissions, royalties and other financial charges generated by the financing or re-financing granted to companies of Panama Pacifico and for the financial lease of the equipment necessary for the development of the activities, businesses and operations that take place within Panamá Pacífico.

Labor Incentives:

• Fixed tariffs for overtime (25%) and work in laborers holidays (50%).
• Flexibility for assigning holidays to the employees.
• The companies can open on Sundays and other holidays.
• Foreign laborers: possibility to exceed the percentage rule of the Labor Code. The companies can request additional expat employees in excess of 15% if local labor is unavailable.
• Higher Education Training Center.
• Justified cause for dismissal due to losses and/or market fluctuations.

Immigration Incentives:

• The one-stop-shops of the site handles all the procedures related to visas and labor permits for their employees.
• Special visas are available investors and laborers (3 to 5 years is the standard period of time).
• The visa benefit is extended to the immediate relatives of the laborer: spouse, dependant children up to 25 years of age, dependant parents over 62 years of age.
• Introduction, only once, and tax-free of any personal and domestic belonging (up to US $ 100,000).

Important: Panama Pacifico has a One-Stop-Shop, where the process is promptly attended for the establishment of a business in the Howard area. This process joins the coordination of 15 government offices within the one sole site, and includes the paperwork of the visas and labor benefits which saves time and money to the companies.

http://www.aaeepp.gob.pa/
www.panamapacifico.com

NEW COMMUNITY: Logistics hub in the making

Tuesday Jul 24 2007 07:10

By Adam Thomson

Think of Panama City and one of the first images is the crescent-shaped bay, defined on one cusp by the growing sky-rise residential area of Punta Paitilla and the picturesque old centre of 19th century pastel-shaded waterfront buildings on the other.

But if London and Regional, a UK-based construction company, gets its way, the city could soon outgrow its traditional boundaries to occupy a huge area of land just across the Bridge of the Americas spanning the Panama Canal: Howard, the former US Air Force base.

This month, the company, together with Jaime Gilinski, the Colombian banker and entrepreneur, signed an agreement with the Panamanian government to build what it hopes will become a new business and residential hub within just a few miles of the existing capital.

The company has three months to present its master plan for the 1,400ha site and, as yet, few details are known. But London and Regional has pledged a minimum investment of $405m during the first eight years of the 40-year concession. A further $300m will follow during the remaining years.

This month, after paying the government a one-off fee of $20m to seal the contract, Ian Livingstone, who heads the company said: "We hope to exceed the spending limits established with the government quite dramatically."

Indeed, Mr Livingstone and Mr Gilinski believe the value of the finished project could top $10bn, equivalent to more than half Panama's gross domestic product. The idea, they say, is to construct a large industrial park, a media village, a downtown area with plaza, restaurants and shops, a showcase building to mark the nearby entrance of the canal and a swathe of residential buildings – for both the wealthy and low-income segments of the population.

"Our intention is to create a community, and that won't work unless you have a representative mix of society and a critical mass to achieve a stable and permanent population," says Mr Livingstone.

That is a far cry from how the area looks today. Large white houses adorned with red-tiled roofs and built up on stilts line grassy streets named to make the US soldiers to feel right at home.

On one side of the area lie a 3.2km runway and four huge hangars which served as centres of aviation maintenance and storage up to 1999 when the US packed its bags and went home.

Economists and town planners say that one of the measures of success will be the amount of interest and the number of firm offers from companies looking to use Panama as its centre of regional operations.

Mr Livingstone says he has already initiated detailed talks with many multinationals. "We have had between 20 and 30 serious approaches from companies whose names everyone is very familiar with," he says.

If they end up moving to the site, it is likely to be for two main reasons. The first is Panama's increasing emergence as a logistics hub for the wider region. Since the government of Martín Torrijos came to power in 2004, it has set in motion a plan to encourage shipping and transport companies to use its strategic position as a centre of distribution.

The second could be a series of tax benefits. Officials say companies involved in industries such as aviation and related activities, and information technology, will not have to pay any taxes or import and export duties.

"What we want to generate is investment and employment," says one official, who estimates that the project could create between 20,000 and 25,000 new jobs.

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