From Panama: New Incentives Regime for Financing Operations of the Local and International Maritime Sector
Cesar Rivera and Irene Bolivar - RBC Attorneys at Law in Panama, a Member Firm of Andersen Global
By Act No.51 of June 28, 2017, published in the Official Gazette No. 28311-B, the National Assembly approved a package of incentives for the promotion of the development and growth of the maritime sector. This package of incentives will be in effect for a term of 20 years beginning on December 30, 2017.
The rule aims to encourage the financing in sectors such as the construction of ships, shipyards, construction and repair of containers, and the construction of sea farms, as well as a package of incentives of migratory and labor type for these activities.
This law not only provides faculty to banks and local financial institutions to offer financing mechanisms for maritime operations, but also to companies engaged in leasing activities and maritime financing entities, as well as the Joint Venture between the Panamanian State and individuals.
Among the main tax benefits established by the law are:
- Settlement in a 3% import tax and other fees on the introduction to the country, machinery, marine equipment, mobile industry, materials, tools and other elements necessary for the construction of ships or the exclusive use of the shipyards.
- Exemption from the payment of the income tax rent on the financing for the construction and purchase of National Merchant Navy ships. To do so, the creditor bank or financial institution shall establish a separate account reflecting the characteristics of the lending operation.
- Exemption from the payment of tax on income, earnings received by companies established in Panama to operate shipyards, financial companies to finance maritime projects, income from interest and commissions accrued to banks or financing entities maritime, revenues from insurance and reinsurance ensuring credits duly certified maritime financing entities and/or sea projects bankable.
- Exemption from the payment of the income tax on the profits obtained by companies that engage in leasing of merchant ships engaged in international maritime trade.