Panama strives to become an important agricultural hub, thanks to the agropark law, this relatively new law is based on a comprehensive plan to attract international investment for Panama’s agricultural sector, as well as helping local farmers with technology and connect them with international buyers to sell their products. The government has enacted a law for the establishment of agropark companies, this law is meant to encourage investment and promote agricultural production for export through agroparks, which are physical spaces where a lot of different produces are farmed in a cluster like environment to minimize cost and maximize value, this law will also help local farmers with the technology needed to improve their businesses as well as promoting businesses between Panama’s local farmers and international buyers, overall it is a comprehensive law that will position Panama as an agricultural hub for the region. The agroparks are expected to attract international investors, and once this project reaches maturity it is expected that it will add about one billion dollars a year to Panama’s GDP, and generate over 100,000 direct jobs.

Agroparks are a genius idea for agricultural development, it essentially acts similar to an industrial park. In an agropark a lot of different produces are farmed clustered together, to minimize costs in an ideal environment and with the most up-to-date technology and farming techniques, as well as maximize value by producing a quality product that meets international standards. According to the government, it is expected that in 10 years this project will add 20,000 hectares of land, with an investment of 700 million dollars, which will eventually add 1 billion dollars to Panama’s economy.

Licensing

The Licenses for agroparks Operators and Developers will be extended for an indefinite period, however, if the land belongs to the government, the duration will be equal to the concession granted by the government. Companies that obtain this License will be entitled to have legal stability for their investment, for which they must present an investment plan of at least $2,000,000, this plan must be completed within three years from the moment the license is given.

Tax exemptions

According to this law, the companies holding an agropark Operating and Development Company License or companies authorized to establish within an agropark will enjoy these spectacular tax exemption

• Exemptions from any tax fees, related to construction materials, equipment, machinery, vehicles, and furniture, for a period of five years
• The benefit of 3% as import tax on raw materials, semi-processed or intermediate products, and other inputs used in the composition or manufacturing process of their products.
• Exemption from property tax on new commercial and industrial improvements for a term of twenty years
• The right to deduct the losses incurred by the companies benefited by this Law during the first two fiscal periods as from the beginning of their activities during the following five fiscal periods, at a rate of 20% per year.

Reasons to Invest in Panama

Panama is a unique country with a privileged location and many incentives for businesses and investors, here are some of the main reasons as to why you should invest in Panama.

• Constant economic growth and one of the largest growths in the entire Latin American region
• The use of the US dollar as legal currency
• A strong international banking center 
• Best logistic platform thanks to the Panama Canal and a privileged location
• strong phytosanitary system and regulations

With this new agropark law the Panamanian government will position Panama as a hub for agricultural exports that will greatly benefit its investors, the local farmers, and the country as a whole.