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Why US Companies are Doing Business in Panama

Why US Companies are Doing Business in Panama

Doing business in Panama can be a smart option for US companies due to strong international relations between these two countries, benefits for foreign investment and the US-Panama free trade agreement.  Panama has the lead in economic growth in Central America, with an estimated GDP growth of 3.7% in 2019 and a GDP per capita of US$15,642. Furthermore, the country is expected to grow by 3.8% in 2020, promising stability and growth for investors. Doing business in Panama: Attractiveness for US investors With attractive benefits for US investors such as currency pegged to the US dollar, easier immigration access, regulations favoring the protection of the company’s information and low fiscal duties, foreign direct investment (FDI) has increased. In fact, c Doing business in Panama is attractive to US companies due to the wealth of business opportunities. The Panama Canal strongly supports import and export activities to Latin America, the Caribbean, and Europe. In addition, financial services, construction, tourism, real estate amongst other ventures are profitable in the country.  1. Free trade agreement with the US The US has a trade agreement with Panama called the United States - Panama trade promotion agreement (TPA). This agreement removes duties for 87% of US consumer and industrial products in Panama, with remaining tariffs to be phased out over the period of 10  years.   The list of consumer and industrial products with duty-free access includes: information technology equipment agricultural and construction equipment aircraft and parts...

Uruguay Revamps its Free Trade Zone Regulations

Uruguay Revamps its Free Trade Zone Regulations

Free trade zones have been the catalyst for multinational expansions across the world. By benefiting from the competitive tax and customs exemptions, businesses are able to reinvest profit and grow faster.  Uruguay is home to 12 free trade zones in total. Within these zones, all forms of business activities are permitted: from manufacturing and warehousing, to services and trade. As such, these special economic areas play a key role in attracting foreign investment to Uruguay. Benefits of Uruguay’s Free Trade Zones Free trade zones (FTZs) are put in place by nations in order to draw foreign investment into their countries. Through the mediums of rent, employment, and other secondary spending from large companies, nations are able to generate large income streams.  Well-known companies such as PepsiCo and Sony base operations within two of Uruguay’s zones and, as such, have profited greatly over the last decade. Out of the 12 FTZs, 11 are privately owned whilst one remains owned by the state in the city of Nueva Palmira. Despite private ownership, all zones are monitored by the Free Zone Area which reports to the General Trade Bureau of the Ministry of Economy and Finance. In order to draw attention from foreign investors, Uruguay has set a number of incentives for companies to benefit from when setting up operations in these areas. The most appealing of these is zero tax.  Tax exemptions Tax exemptions are probably the most beneficial part of operating from an FTZ. Operators working in these zones are exempted from all national taxes except social security for their...

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