Touristic Projects Investments

Tourism is another of the activities in which the investment offers tax benefits, with the purpose of encouraging those initiatives that promote the development of this sector of unique importance in Panama’s economy. This is why, people or companies that carry out projects or tourism programs in Panama and are registered in the National Tourism Registry, are granted the following tax exemptions:

1. Total exoneration from paying the real estate tax on lands and improvements that are of their property and that are used in tourism development activities for a period of 10 years.

2. Total exoneration from paying the income tax derived of the activity of the company for a period of 5 years.

3. Total exoneration of the import, contribution or levy tax, as well as the tax on transfer goods and services (ITBMS, for its acronym in Spanish) that fall on the import of materials, equipment, furniture, accessories and parts that are used in construction, restoring and equipping the establishment, provided that the merchandise is not produced in Panama or is not produced in sufficient quality and amount for a period of 15 years. By equipment, it is understood for purposes of the Panamanian Tourism Law, vehicles with a minimum capacity of 8 passengers, airplanes, helicopters, boats, ships or sport equipment, engaged exclusively to tourism activities.

4. A 15-year exoneration of taxes, contributions, levies or fees of any kind or denomination that fall on the use of ports or airports built by the company.

5. Exoneration of all tax or levy for the company on its capital, for a period of 5 years.

6. The loans granted to tourism investments will not be object of the retention established by Law 4 of 1994; in other words, it is the Special Interest Compensation Fund (FECI, for its acronym in Spanish).