The Colón Free Zone is a free trade zone in Panama and one of the most important commercial and logistics centers in the Western Hemisphere. Located on the Atlantic entry point of the Panama Canal, the Colón Free Zone has been serving as a center for international trade, distribution, and re-export for over 70 years. The free zone connects markets from the Americas, Europe, and Asia.
A Strategic Hub for Regional Commerce
Currently, the Free Zone continues to consolidate its position as a regional logistics powerhouse by presenting major benefits to companies interested in penetrating the Latin American market. Dovi Eisenman, president of the Colón Free Zone Users Association (AUZLC), indicated that this free trade zone is consolidating itself as a strategic point for regional commerce and as an engine for economic growth for Panama.
“Colón Free Zone continues to be a preferred destination for foreign investment and an important economic engine for Panama,” Eisenman said. He added that “many foreign companies are coming to Panama to locate themselves in the Colón Free Zone by the benefits and incentives that we have in Panama to attract foreign investment.”
Global Connectivity and Business Diversity
The businessman explained that the Colón Free Zone “is a strategic point for the development and generation of trade in the region, in addition to being a door to the Atlantic and Pacific oceans and having access to more than 1,400 ports in the world through the Panama Canal.”
There are currently 2,800 registered companies in the Colón Free Zone, “representing various areas such as logistics, pharmaceuticals, textiles, electronics, and automotive parts. These companies take advantage of the excellent infrastructure and world-class connectivity that the Free Zone has, as well as its efficient customs regime to operate their international supply chains and regional distribution,” Eisenman stated.
Competitive Advantages for Companies
Eisenman explained that companies have multiple competitive advantages in the Colón Free Zone. These include: “The benefits of operating in the United States dollar, a stable and dollarized economy, and a very favorable geostrategic location between two continents. In addition, Panama is a country with a long-standing tradition of being a business-friendly environment with a solid and growing financial services sector, which makes Panama an attractive option for multinational companies that are interested in establishing a presence in Latin America.”
Fiscal and Customs Benefits
The businessman noted that Colón Free Zone companies operate under a special fiscal and customs regime, which includes the free importation, storage, and re-exportation of goods. For this reason, the Colón Free Zone is “one of the largest free trade zones in the world, after Hong Kong.”
The Colón Free Zone’s close proximity to the largest ports, modern warehouses, and multimodal transport links—including the Panama Canal Railway—offers a streamlined and efficient logistics ecosystem for companies looking to move their goods throughout the Americas, which reduces costs and optimizes delivery times.
Economic Contribution and Local Impact
The Colón Free Zone president also indicated that “last year, we generated more than 50 million dollars per year as a result of the commercial activity that is carried out by all the users of the Free Zone. Of those $50 million, we deliver about $30 million to the Central Government, and then it is the Central Government that takes care of distributing it among the municipalities,” Eisenman explained.
The businessman’s statements were in response to a controversy generated by statements made by Colón’s mayor, Diógenes Galván, who had indicated that in the Colón Free Zone, “businesses are not paying taxes and that is what slows down the district.”
Clarifying Misconceptions About Taxation
Eisenman responded to the comments by stating that “the mayor from the start should have clarified, because the story was completely inverted, as if the businessmen were to blame for what is happening.”
Eisenman indicated that “what I can tell the mayor is that he should be very well informed because by what he said, he confused not only the general public but also every one of us. We, as Free Zone businessmen, don’t understand what he means by ‘not paying taxes.’”
According to the president of the AUZLC, “people in general, including the mayor of Colón, do not understand the way our free zones work in Panama, because our Free Zones have special regimes, which I will briefly explain.”
Fees, Permits, and Local Obligations
“It’s important to know that the free zone companies pay all the fees, permits, security, sanitation, taxes on local sales, social security, and all operational costs. All services that a city hall or municipality normally collects are the services that are paid to the administration of the Colón Free Zone,” Eisenman said.
In addition, he noted that beyond these fees, companies pay other operational fees for operating in the jurisdiction of Colón. “We also pay for other services for operating within the Colón area, and that costs $5,000 per year, being $2,500 for operation and $2,500 for representation,” the businessman stated.
He went on to clarify that “we also pay by the square meter of the space that we occupy, because all the land in there is rented, it is not privately owned; it is rented for 20 years.”
Strengthening Understanding of Free Zone Operations
In light of these explanations, the president of the AUZLC stated that “we are active taxpayers, our companies pay rent, permit taxes, and everything within the law and the regulations that we have.” The businessman said that this contributes to a more accurate understanding of how free zones contribute to economic development and challenges common misconceptions about tax exemptions.
The Colón Free Zone Users Association (AUZLC)
The Colón Free Zone Users Association (AUZLC) was founded on November 5, 1979. The Association was created by a group of entrepreneurs who decided to take the initiative to unite in defense of the rights of the Free Zone users and to strengthen the competitiveness of this important Panamanian institution.
Since then, the AUZLC has been working day by day to promote greater collaboration between the private sector and the public authorities, in order to make the Free Zone more efficient and attractive as a platform for global commerce. The Association promotes the continuous improvement of policies, supports business development initiatives, and also seeks to promote sustained and sustainable growth in the Colón region.
Who Is Dovi Eisenman?
Dovi Eisenman is the current president of the Colón Free Zone Users Association (AUZLC). In addition, Eisenman is the CEO of Grupo FCI, a Panama-based company that provides transportation, e-commerce, distribution, customs management, and third-party logistics (3PL) services.
He is also the president of Fundación Voluntad Panamá. He has a Master’s degree in Administration and Transportation Logistics Management. Eisenman is a professional in the area of international maritime transport, and he has worked closely with ship captains, which has allowed him to establish connections with a large number of global shipping agents.
Looking Ahead: The Future of the Colón Free Zone
The Colón Free Zone is one of Panama’s most resilient economic institutions, and it represents the country’s commitment to trade, openness, and free markets. Despite the challenges the free zone has faced over the last decade, it has continued to evolve and adapt to changes in the global economy.
For instance, the Colón Free Zone has embraced digitization and is implementing sustainable business practices to remain competitive in the changing global market.
A Catalyst for Panama’s Economic Growth
In the future, with continued support from the authorities and with the leadership of the current president of the AUZLC, Dovi Eisenman, and active participation of the organization’s members, the Colón Free Zone has an opportunity to increase its influence as a regional logistics hub, attract new investment, and continue to contribute to the long-term prosperity of Panama.
As Eisenman stated: “The Colón Free Zone is not just a place of business, it’s a catalyst for economic growth and international cooperation, which strengthens Panama’s role as the commercial bridge of the Americas.”