Bill 387.

Summary.

The bill establishes a productive and logistics relocation regime in the Republic of Panama, complementary to Law 41 of 2007, Law 159 of 2020, Law 32 of 2011 and Law 412 of 2023, concerning the Colón Free Zone. It sets principles of legal certainty, competitiveness, employment, sustainability, coordination and transparency. It covers domestic and foreign companies that move processes from countries outside the region or undertake light manufacturing, assembly, advanced logistics, refurbishment and value added services in Panama.

Participating companies could obtain a reduced income tax rate, ITBMS exemptions for transactions serving foreign markets, and exemptions from import charges and specified taxes relating to distributed profits, licenses and real property. The Directorate General of Revenue (Dirección General de Ingresos) would define economic substance criteria for the reduced rate. The same activity could not receive duplicate tax benefits under different regimes. The bill provides for an electronic single window coordinated by the National Customs Authority (Autoridad Nacional de Aduanas) and the Ministry of Commerce and Industries (MICI), priority customs clearance, special customs facilities, transit measures and priority in authorized economic operator certification.

On labor and immigration, it permits the hiring of specialized foreign personnel subject to the Labor Code and Panamanian workers’ preferential rights. It provides special work and residence permits, training programs coordinated with the National Institute for Professional Training and Human Development (Instituto Nacional de Formación Profesional y Capacitación para el Desarrollo Humano, INADEH), special schedules subject to labor limits, a special investor passport and permanent residence linked to a minimum investment of B/. 300,000.00 and the creation of jobs for nationals. The National Immigration Service (Servicio Nacional de Migración), the Ministry of Labor and Social Development (Ministerio de Trabajo y Desarrollo Social) and the Panama Passport Authority (Autoridad de Pasaporte de Panamá) would take part in these arrangements.

The bill also provides exemptions and deductions for digitization and environmental technologies, supervised pilot programs, environmental certification and preferential access to green credit. The Ministry of Environment (Ministerio de Ambiente) participates in the environmental incentives. The National Bank of Panama (Banco Nacional de Panamá) and the Savings Bank (Caja de Ahorros) would establish credit, guarantee, venture capital and SME support mechanisms, with responses within periods of no more than thirty (30) calendar days. It envisages financing cooperation with the Inter-American Development Bank (Banco Interamericano de Desarrollo, BID), CAF and the World Bank (Banco Mundial). Under Law 54 of 1998, registered benefits would remain stable for a minimum period of ten (10) years.

The bill creates the National Productive and Logistics Relocation Council (Consejo Nacional de Relocalización Productiva y Logística), chaired by the Ministry of Commerce and Industries (Ministerio de Comercio e Industrias), with participation by PROPANAMÁ, the Ministry of Economy and Finance (Ministerio de Economía y Finanzas), the Ministry of Labor and Labor Development (Ministerio de Trabajo y Desarrollo Laboral), the Council of Rectors of Panama (Consejo de Rectores de Panamá) and private representatives, among others. It assigns the council coordination, monitoring and annual reports to the Executive Branch (Órgano Ejecutivo) and the National Assembly (Asamblea Nacional). It also creates the Productive and Logistics Relocation Technical Secretariat (Secretaría Técnica de Relocalización Productiva y Logística) and the public, electronic and free National Nearshoring Registry (Registro Nacional de Nearshoring). PROPANAMÁ would prepare an annual international promotion plan.

Companies would have to register before seeking incentives, maintain economic substance, update their records and submit annual reports. The management report would be due within the first four (4) months of each fiscal year. The Technical Secretariat would supervise and audit alongside the Comptroller General of the Republic (Contraloría General de la República) and other authorities; it could impose warnings, fines, suspensions, exclusion and disqualification through administrative due process. Companies already registered under special regimes would retain their rights and join the registry within twelve (12) months. The bill calls for consistency with commitments under the World Trade Organization (Organización Mundial del Comercio) and standards of the Organisation for Economic Co-operation and Development (Organización para la Cooperación y el Desarrollo Económicos), with treaties prevailing under the Political Constitution (Constitución Política). The Executive Branch would issue regulations within six (6) months. Its provisions could concern customs, tax, labor and environmental agencies, as well as investors, manufacturers, logistics operators, suppliers and financial institutions.