Countries › Panama › Guide › 3. Investing › Panama Pacífico special economic area: registration, tax exemptions, the 5 percent office services rate and labor rules under Ley 41 de 2004

Panama Pacífico special economic area: registration, tax exemptions, the 5 percent office services rate and labor rules under Ley 41 de 2004

Last verified: 2026-10-29 · Status: Stable

Panama Pacífico is a special economic area run by an autonomous agency under Ley 41 de 2004, open to national and foreign companies that register with it. Operations inside the area are free of import duties, ITBMS, stamp and licence taxes, but income tax, dividend tax and withholding apply except for listed activities such as aviation services, high technology manufacturing, call centres and data services, logistics and transit sales, and office administration services pay 5 percent, all subject to substance tests since 2019. Flexible overtime and shift rules and a 10 and 15 percent foreign staff cap apply.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender (Ley 84 de 1904; see fx/dollarization-and-the-balboa). USD figures therefore equal the balboa figures.

Key facts

Income tax rate on office administration services in Panama Pacífico	5 %Ley 41 de 2004 art. 60 literal k, as of 2026-10-29 · in force
Annual capital tax for Panama Pacífico companies registered from 2017 (min B/.100, max B/.50,000)	0.5 %Ley 41 de 2004 art. 60 numeral 6, as of 2026-10-29 · in force
ITBMS on goods and services in Panama Pacífico	Exempt textLey 41 de 2004 art. 58 numeral 2, as of 2026-10-29 · in force
Overtime surcharge in Panama Pacífico	25 %Ley 41 de 2004 art. 84, as of 2026-10-29 · in force
Cap on foreign ordinary workers in Panama Pacífico	10 %Ley 41 de 2004 art. 91, as of 2026-10-29 · in force
Cap on specialised foreign staff in Panama Pacífico	15 %Ley 41 de 2004 art. 91, as of 2026-10-29 · in force

The rule

1. The Panama Pacífico Agency may register individuals and companies wishing to operate in the area; applicants provide identity or company details, a description of activities, jobs and initial and future investment, the articles and a recent good standing certificate. Activity in the area is open to nationals and foreigners on non discriminatory terms. Registration by resolution of the Administrator confers the status of Area Company and the right to the law's incentives, and no Ministry of Commerce commercial or industrial licence is needed.Ley 41 de 20 de julio de 2004, arts. 47, 48 and 49, 2004-07-20 official text · verified 2026-10-29

2. Area companies may carry on any activity not expressly prohibited by health, security and public order rules, but activities that in the Agency's view could upset contracts signed by the State may register without tax and labor incentives, and showrooms for goods traded wholesale in other free zones are not allowed.Ley 41 de 20 de julio de 2004, art. 49, 2004-07-20 official text · verified 2026-10-29

3. The area is free of all taxes for Area companies, the Operator and the Developer except as provided in arts. 60, 72 and 77: operations are 100 percent free of national direct and indirect taxes, fees and charges, including import duties on goods brought into the area, ITBMS on goods and on services provided by Area companies to persons inside or outside Panama and on services they receive (save Código Fiscal art. 1057-V parágrafo 27), taxes on fuel movement, commercial or industrial licence fees, stamp tax, export taxes and taxes on payments to foreign lenders for financing.Ley 41 de 20 de julio de 2004, art. 58 as worded by Ley 31 de 22 de junio de 2009 art. 4, numeral 2 as worded by Ley 66 de 13 de diciembre de 2018 art. 2, art. 58, 2018-12-13 official text · verified 2026-10-29

4. Area companies, the Developer and the Operator pay under general law: income tax on net taxable income from activities in the area; dividend and complementary tax; tax on remittances abroad for commissions, royalties and technical assistance; import tax and ITBMS for regulated professional services; property tax on land and improvements once thirty years pass for the Master Developer and ten years for companies buying property in the area, both counted from 1 January 2019; and an annual 0.5 percent tax on capital, minimum B/.100 and maximum B/.50,000, except companies registered by 31 December 2016.
Cost to do it: Annual capital tax 0.5 percent of capital, B/.100 to B/.50,000 (US$100 to US$50,000), for companies registered from 2017.
Example: A company with B/.2,000,000 of capital registered in 2020 pays B/.10,000 a year of capital tax; one with B/.20,000,000 pays the B/.50,000 cap. / US$10,000 and US$50,000.Ley 41 de 20 de julio de 2004, art. 60 as worded by Ley 66 de 2018 art. 3, art. 60 numerals 1 to 6, 2018-12-13 official text · verified 2026-10-29 · changed: Ley 66 de 2018 rewrote art. 60, dropping the general exemption for services to persons abroad that Ley 3 de 2015 had kept, adding the capital tax and the property tax schedule, and creating the 5 percent rate for office administration services.

5. Exempt from those taxes are the income from: sales of shares of Area companies, the Operator or the Developer, directly or indirectly; the Developer's activities under its contract; sales to visitors and travellers in transit or bound abroad, to ships transiting the Canal or sailing to foreign ports and to aircraft flying abroad (not sales by the manufacturer itself or its group); aviation and airport services including cargo handling, aircraft maintenance and conversion and parts; high technology manufacturing; call centres, data capture, processing, storage and transmission, signal linking and digital applications R&D; imports, exports and re exports and sales abroad of goods not made in the area; and logistics and multimodal services. Office administration services (shared services) pay income tax at 5 percent on net taxable income, with a 2 percent floor when foreign tax credits apply and 5 percent withholding by Panamanian payers who deduct them.
Example: A shared services centre in the area with B/.1,000,000 of net taxable income pays B/.50,000 of income tax at 5 percent. / US$1,000,000 of net income, US$50,000 of tax.Ley 41 de 20 de julio de 2004, art. 60 literals a to k as worded by Ley 66 de 2018 art. 3, art. 60 literals a to k, 2018-12-13 official text · verified 2026-10-29

6. Companies doing the activities in literals i (trade and re export) and j (logistics) pay only dividend or complementary tax at the rates of Código Fiscal art. 733 literals b and g, which do not apply to companies registered by 31 December 2016. The exemptions do not apply where the income is taxed abroad with a credit for Panamanian tax, and Area companies must keep accounts in Panama separating exempt and taxable operations; retail fuel stations for land vehicles get no special tax treatment.Ley 41 de 20 de julio de 2004, art. 60 as worded by Ley 66 de 2018 art. 3, art. 60 literals i and j and final paragraphs, 2018-12-13 official text · verified 2026-10-29

7. From fiscal year 2019, the exemption for call centre and data services (literal h) and logistics (literal j) and the 5 percent rate for office administration services (literal k) apply only if in that year the company keeps an adequate number of qualified full time staff for its principal income generating activities and incurs adequate operating expenses in Panama directly related to them, and files the annual report: a sworn statement by the legal representative and an accountant on activities, expenses and staff, with audited financial statements, filed with the Agency within six months of the fiscal year end. Otherwise that income is taxed at the general rate.Ley 41 de 20 de julio de 2004, arts. 60-A and 60-B as added by Ley 66 de 2018 arts. 4 and 5, arts. 60-A and 60-B, 2018-12-13 official text · verified 2026-10-29

8. Goods manufactured, processed or assembled in the area can enter Panama's customs territory paying duties only on the foreign raw materials and components incorporated, with an input output sheet approved by the customs authority; national components, value added in the area and inputs duty free under treaties are excluded, and finished goods that are duty free under treaties enter with no duty. Inputs may leave temporarily for processing in the customs territory for up to six months, extendable once.Ley 41 de 20 de julio de 2004, art. 68 as worded by Ley 3 de 10 de febrero de 2015 art. 4, art. 68, 2015-02-10 official text · verified 2026-10-29

9. Overtime in the area carries a 25 percent surcharge and night and mixed shifts are paid only for hours actually worked or on call; employers and workers may agree rotating shifts and the weekly rest day. Employers may keep foreign staff up to 10 percent of ordinary workers and specialised foreign staff up to 15 percent of the workforce; companies that only run offices directing transactions abroad and companies with fewer than ten workers follow the Labor Code.Ley 41 de 20 de julio de 2004, arts. 82, 84, 85, 86 and 91, 2004-07-20 official text · verified 2026-10-29

Activity	Income tax	Substance test
Aviation and airport services	Exempt	No
High technology manufacturing	Exempt	No
Call centres, data and digital services	Exempt	Yes (art. 60-A)
Imports, re exports, sales abroad of goods not made in the area	Exempt	No
Logistics and multimodal services	Exempt	Yes (art. 60-A)
Office administration (shared) services	5 percent	Yes (art. 60-A)
Sales of shares of Area companies	Exempt	No
Sales into Panama's customs territory and other activities	General rate	Not applicable

Income tax treatment by activity in Panama Pacífico (art. 60 as worded by Ley 66 de 2018).

Worked example

A European airline group registers an aircraft maintenance company in Panama Pacífico.
It imports hangar equipment and parts free of import duty and ITBMS, and its maintenance income is exempt from income tax under art. 60 literal f.
Registered in 2025 with B/.5,000,000 (US$5,000,000) of capital, it pays the 0.5 percent capital tax of B/.25,000 (US$25,000) a year.
A sister company in the area providing group accounting services pays 5 percent on its net taxable income, provided it meets the yearly staff and spending test.

Step by step

Confirm the activity is allowed and identify which art. 60 treatment applies.
Incorporate the company or register the foreign company in the Public Registry.
Apply to the Agency for registration with activity, jobs and investment details, articles and good standing certificate.
Obtain work permits and visas through the Agency's labor and migration office, within the 10 and 15 percent caps.
Keep separate accounts for exempt and taxable operations and, for literals h, j and k, file the annual sworn report and audited statements within six months of year end.

Common traps

Services to persons abroad are no longer exempt as such since Ley 66 de 2018; only the listed activities are.
Companies registered from 2017 pay the 0.5 percent capital tax and the special dividend rules for trade and logistics companies.
Property bought in the area becomes subject to property tax ten years after 1 January 2019 for buyers.
An EMMA licensee located in the area gets only the EMMA tax regime, not art. 60.
Sales into Panama's customs territory are taxable and pay duties on foreign components.

Sources

← EMMA licence in Panama: manufacturing, assembly, repair and logistics services for a multinational group at 5 percent under Ley 159 de 2020Public private partnerships in Panama under Ley 93 de 2019: B/.15 million floor, public initiative only, 30 year terms and arbitration in Panama →

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