At the beginning of 2023, the Cabinet Council of Panama issued a favorable concept to the National Commission of Free Zones of the Ministry of Commerce and Industries.
To authorize the establishment and operation of two new free zones, Tech Valley Free Zone and Panama Digital Gateway, which seek to increase the strategic potential of Panama as a digital hub in the region.
Firstly, it is important to know that a free zone is a free enterprise area, specifically delimited, in which all the infrastructures, facilities, buildings, systems, and support services are developed, as well as operational organizations and administrative managements necessary to allow companies from all parts of the world to establish themselves, engaging in activities such as, the production of goods, services, high technology, scientific research, higher education, logistical, environmental, health and general services.
Tech Valley Free Trade Zone
Through Cabinet Resolution No. 7 of 2023, the Cabinet Council issued a favorable concept to authorize the establishment and operation of the free zone called Tech Valley Free Zone, which will be developed on a total land area of more than 75 hectares, contemplating an initial investment of US$50,000,000.00, but projecting a total investment of US$100,000,000.00, which includes the development of research centers, commercial areas, and data centers, among others.
Through incentives and special conditions, this new free zone will seek to attract and establish 120 companies aimed at the services, technology, and the creativity sector, estimating a minimum generation of 1140 direct jobs and 3570 indirect jobs.
Panama Digital Gateway
On the other hand, through Cabinet Resolution No. 8 of 2023, the Cabinet Council issued a favorable concept to authorize the establishment and operation of the free zone called Panama Digital Gateway. For its development, a total investment of US$19,500,000.00 is contemplated, with the figure of US$11,500,000.00 as an initial investment.
Due to the particularities of this ambitious project, which envisages to establish one of the largest data processing centers (data center) in the region, it will seek to attract the main content and telecommunications companies globally, because it will be developed in the Corozal area, where seven (7) submarine cables currently land. This represents an extremely important connectivity element for a data center, in turn that will allow the reduction of international traffic costs and latency, allowing these content companies to be closer to their end users.
Through the establishment of these two new free zones, Panama seeks to fully exploit its geographical position by consolidating itself as the digital hub of the region, thus seeking to attract companies that are at the forefront of technology and innovation, which will mean a significant improvement in the competitiveness and connectivity of the country.
The establishment of these new free zones is a novel and current topic, so additional information will emerge as the projects are developed and implemented.