Free Zone in Dubai versus Free Zone in Panama: What Are The Differences?

Jun 14, 2013 by Emmanuel Besserve

Free zone refers to free economic zone or free trade zone, an area in which goods may be landed, handled, manufactured and re-exported without the intervention of customs authority.

Panama and Dubai have well established free zone operations but with some differences. The first difference between the Panama and Dubai free zones is that Colon free zone in Panama is the biggest in the world, comprising of more than 800 acres.

There are more differences between the Dubai and Panama free zone. Dubai provides further incentives to businesses to build up shops in the territory of Dubai. Those companies in free zone enjoys a special status that allows them to run their businesses with minimal struggling

Some benefits of Dubai free zone companies same are listed below:

  • Hundred percent foreign ownership is permitted
  • Repatriation of capital and profit is 100% and is permitted
  • There is very little rules on training labor
  • There is no bureaucratic red tape
  • There is state of the art infrastructure

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Those listed above are some of the benefit of free zone Company in Dubai while in Panama the benefits of Free Zone Company include:

  • The taxation for billing is zero percent
  • The quotas and duties of importation and exportation is zero percent
  • There is also no taxation on profit from re-exportations

The Panama Colon free zone receives above 300,000 visitors every year and provides a business home to some 2,500 companies. It produced exports and imports valued at over US $29 billion in the year 2011. Therefore the Colon progress do well and promote many thing, which harness the services and facilities that are given by free zone for importing, storing, repacking and exporting products all over the world. Therefore, it is referred as “trading showcase” of central and South America, and the Caribbean region.

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Imports into the Colon Free Zone come mainly from China, Japan, Korea, Mexico, Italy, United Kingdom, Malaysia and Germany. These countries supplied almost 87% of all Colon free zone imports. This makes the Colon to have a high rate of progress. On the other hand, the Dubai progress is slower and that makes a difference between the two. The UAE/Dubai governments and the related companies are doing all they can to pay debts and reassure the investors as the world market staggers and as the Euro Zone mulls its next move. Dubai government does not presently support the establishment of partnership and share-partnership companies.

In Dubai, when someone is employed in the Free zone, his/her sponsor will be the free trade zone and in most cases not the ministry of labor. Therefore, this speeds up the hiring process and the good thing is that even when one changes employers under the free trade zone, the sponsorship does not change. Perhaps this explains why Dubai has been a hotspot for expatriate labor for a long time.

Companies that are approved for operation in Jebeli Ali free zone are given one of the following licenses. Some of these licenses are:

  • A general trading license, which permits the holder to distribute, store and import items as per Jafza rule and restriction
  • An industrial license permits the holder to import raw materials, export the finished goods to any country.
  • Service license, which permits the holder to practice the services in the license in the free zone
  • National industrial license, which is made for the manufacturing companies with a shareholding of 51 percent Arabian Gulf co-operation council. If the company still holds a valid lease from the free zone authority, the license is renewable every year.

On the other hand, Panama introduced a new and compressive banking law. However, the pervious national banking commission that issued licenses has been replaced by” superintendence” with five members of board of directors and superintendent. Dubai provides more than five banking licenses and Panama provides only three of them, which are:

  • General license, which can be issued to foreign banks, they allow trading in and outside Panama.
  •  Representation licenses, this are issued to also foreign banks and they allows only local office and not local trading.
  •  International license which allows the offshore banking to be carried from Panama’s office

Colon free zone is the largest in America and the second largest in the world. The products mostly imported in the Colon free zone are clothing, perfumes, textiles, gold, jewelry, liquors and cigarettes as we saw earlier Colon free zone generate lots of benefit to the national economy. In this zone, wholesale apparel is one the most exported business lines.

From Colon in Panama City, you can have access to, the American hemisphere, Europe, Asia, Africa, Australia, and services from ship supply as an exporter and as an importer, you can only be at one place, there are credit facilities and there is less dispatching than 24 hours.

There are more differences between free trade zone in Dubai and in Colon, Panama. We just listed a few of them.

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Panama Tax free zones
About The Author
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Emmanuel Besserve

Our international team from Europe, Asia, United States, Canada, Central and South America know what trading is all about. Our team is able to communicate in many languages and we are driven by the idea of providing our members with the highest quality of service that it is available. Let’s make it simple: we want to help you!

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