Panama has always recognized the importance of the Panama Canal and how, given the world’s reliance on logistics, transportation, and trade, it could be used to stimulate the economy by developing related but distinct economic drivers. In 1948, in response to World War II, the Colón Free Zone (ZLC) was created as a 600-acre exclusive area where goods could be stored and then redirected while enjoying economic benefits such as reduced tariffs and taxes. Today, it is one of Panama’s most profitable economic drivers and the largest of its kind in the Americas and the second largest in the world.

In an effort to stimulate the economy after the pandemic, the Panamanian government created a total of five additional Special Economic Zones (SEZs). These zones will provide additional benefits such as logistical efficiency, greater flexibility, and improved cash flow. For Panama, the SEZs are expected to create 10,000 jobs and represent a projected initial investment of $21.91 million.

The new Special Economic Zones (SEZs) will be located throughout the country, including one in Chiriquí on the border with Costa Rica, another in Herrera in the central region, one to be added to the existing Colón Free Zone, and two in Panama City.

The new zones will be primarily dedicated to fishing and agribusiness, along with necessary support businesses such as biomass processing, water management and treatment, and supply chain clusters. The two zones near the capital city will be the largest in the country, with infrastructure to support year-round agricultural production and the use of vertical gardens, resulting in a 95% reduction in water consumption. The zones will allow companies to collaborate, including in processing and manufacturing, while leveraging Panama’s capacity for easy global shipping.

It is expected that 93.7% of the new 10,000 jobs will be filled by Panamanians and 6.3% by foreigners, well below the 90-10% ratio required by law.

The five new Special Economic Zones (SEZs) represent the Panamanian government’s continued aggressive approach to mitigating the economic impact of the pandemic, attracting foreign investment, and ensuring Panama’s continued growth. To learn how you can be part of this exciting moment in Panama’s history by investing in local real estate, please contact one of our sales associates.