| City of
Knowledge Inaugurates High-Tech Business Incubator In Panama |
| The Panama
Canal Silicon Valley - page 2 |
| by Dr. Juan Francisco
Pardini |
| PANAMA'S
CONTINENTAL FIBER-OPTIC NETWORK LINK
he MAYA-1 and
ARCOS-1 ring systems will link the continental Americas and the Caribbean
Basin, when completed in December of 2000.
Total investment
for the two fiber--optic trunk systems is targeted at $217 million, and
is to be divided between a mainly 14-member consortium, including world-class
carriers such as AT&T, CTC Mundo, France Telecom, MCI, SPRINT, Star
Telecom, Swisscom, TelMex WorldExchange and Cable & Wireless. |
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| The MAYA-1
ring will feature relays in Florida, Mexico, Guatemala, Costa Rica, Panama,
Colombia, Puerto Rico, Jamaica and Grand Cayman Island and, in addition
to its own communications structure, will provide a restoration path for
the Pan-American cable.
The ARCOS-1
trunk spans Florida, Mexico, Belize, Guatemala, Honduras, Nicaragua, Costa
Rica, Panama, Colombia, Aruba, Puerto Rico, the Dominican Republic and
the Bahamas. These submarine networks will give Panama two international
connections via high-bandwidth, fiber-optical trunk routes, superseding
the current satellite link--feed system that is now in operation. This
in turn will enable fast and reliable connections for B2B, banking, ecommerce
and other businesses as well as additional high-speed consumer-activity
units.
The OXYGEN
network links the US Caribbean, goes through the Panama Canal, and connects
to the Pacific ocean within Colombia, Perú, Ecuador, Chile, Brazil
and Europe.
The GLOBAL
CROSSING project connects Asia, the US, goes through the Panama Canal,
the Caribbean countries, and Europe. |
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| Ultimately,
the main benefit of MAYA, GLOBAL CROSSING, OXYGEN, PANAMERICAN and
ARCOS will be lower international prices for consumers.
In addition,
these new cables will incorporate New Wave Division Multiplexing Technology
that will allow extraordinary ultra high speed bandwidth applications,
such as multimedia and digital video.
The MAYA –1,
GLOBAL CROSSING, OXYGEN and ARCOS-1 projects represent yet another building
block in Panama’s quest to become Latin America’s Telecom Hub, which the
United Nations Education, Science and Culture Organization (UNESCO) has
predicted will occur within the next few years.
INFRASTRUCTURE
and INCENTIVES |
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Offshore Resources Gallery
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International
Technopark of Panama
The Technopark
is a mixture of commercial space, offices, technical facilities and ancillary
residential properties. The government is supplying 20 hectares of
land with complete infrastructure and buildings worth an estimated $50
MM. Since the Technopark project was unveiled in August 1999, 20 companies
have signed up as tenants and more than 40 have expressed interest including:
Oracle, Cisco, Microsoft, and C&W. Panama is a country with a long
list of advantages such as low cost of living, good quality of life, no
pollution, to name a few.
The Technopark
opened in January 2000 and is located on what was once the US Army Base
at Fort Clayton along the Pacific side of the Panama Canal, five kilometers
from downtown Panama City and a few hundred meters from the fiber optic
submarine cables crossing the Panama Canal. Other participants include
the Smithsonian Tropical Research Institute (STRI), and a special Technical
Cooperation Agreement has been negotiated with the European Union, through
which the organization has assisted in Technopark project development,
strategic plan definition and in identifying those niches in which Panama
has a “comparative advantage." |
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Additionally,
a growing number of companies are signing up for the "Hi-Tech Incubator"
program which has been established with the intention of accommodating
and stimulating the creation of technology start-ups. The new entrepreneurs
would receive seminars and workshops covering the development of business
plans, thus attracting venture capitalists to finance their operations.
The Technopark is attracting interest from a diverse group of businesses
which may be divided into three separate, but inter-connected areas:
1.
Biotechnology, Marine Resources, Reforestation, Tropical Medicine and Aquaculture.
2. Information
Technology, Telecommunications, Geographic Research and Data Transfer.
3. Multimodal
Transport, Automobile, Aviation and Marine Technology
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Offshore
Resources Gallery
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| A special
legislation applies to all businesses operating within the Technopark.
This legislation includes significant fiscal benefits, immigration advantages,
and an established infrastructure requiring reduced start-up investment.
However, it is important to present the specific benefits that the Technopark
offer.
The Panamanian
Government granted the Technopark and all entities established therein,
the following benefits for an extendable 25 year period:
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Exemption of all
taxes, contributions, duties or import fees on all machinery, equipment,
furniture, vehicles, appliances, or materials necessary for the development
of the project.
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Exemption of the
movable property transfer tax (VAT) on machinery, equipment, vehicles,
appliances and material acquired and necessary for the development of the
project.
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Exemption of any
tax duty, or lien imposed on the remittance of money abroad, when such
remittance or transfer of funds takes place in relation to the purposes
of the project.
In addition, special
immigration rules are in place to promote the installation of hi-tech business
in the Technopark. Special visas will be granted to expatriates who
may enter the country with the purpose of participating in the development
of listed projects.
Export Processing
Zones
By means of
Law 25 of 1992, the Export Processing Zones (“EPZ’s”) were created to promote
foreign investment by establishing a special regime to those companies
exporting goods or services produced or processed within said zones. EPZ’s
can be created as Private Hi-Tech Parks to host an array of diverse companies.
One important highlight is the granting of exclusive rights to EPZ developers
to provide their own telecom and energy allowing the possibility of 24
hours redundancy and related services.
The most relevant
incentives granted to Export Processing Zones are:
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Exemption of all
taxes, contributions, duties or import fees on all machinery, equipment,
furniture, vehicles, appliances, or materials necessary for the development
of the project.
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Exemption of any
national direct tax on capital.
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Exemption of income
taxes.
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Exemption of any
national direct tax on dividends and interests originated from securities
issued by the company and traded in local or international markets.
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Special immigration
and labor regime.
Panama Taxation
The Republic
of Panama is especially attractive to foreign investors for its tax benefits,
particularly those referring to income tax.
Income tax
is levied on all revenues produced within the territory of the Republic
of Panama, with the exceptions that the law establishes. This concept of
territoriality is one of the determining factors making Panama a center
of international operations.
For ecommerce,
this is extremely important for companies planning where to set up a permanent
establishment for their sales and payments for future tax planning.
The following
income is not deemed to be produced in Panama, consequently, it is not
subject to income tax:
a)
Billing, from an office established in Panama, the sale of merchandise
or goods for an amount higher than the amount at which said merchandise
or goods were billed to the office established in Panama, provided said
merchandise or goods move exclusively abroad;
b) Conducting,
from an office established in Panama, transactions perfected, consummated
or having effects abroad; and
c) Distributing
dividends or partners’ participations, when such dividends or participations
originate from income not produced within the territory of the Republic
of Panama, including income not produced within the territory of the Republic
of Panama, including income arising from the activities mentioned in (a)
and (b) above.
CONCLUSIONS
Panama motivates
potential investors to base their ecommerce operations in Panama
as a virtual nation with an environment where international business is
welcomed. Panama continues to encourage foreign capital to enter its domain.
Of course, this imperviousness to change cannot be attributed to accident
or chance, and there are, indeed, several most solid reasons on which
the extraordinary stability of Panama as ideal basis for foreign investment
continues to rest.
For example,
a company can have its headquarters in the US, its manufacturing facility
in Mexico, its distribution from the Colon Free Zone of Panama; its ecommerce
and payment transactions out of Panama and its customers in North and South
America, Europe, and Asia.
The extraordinary
facilities afforded to any foreign investor in various hi-tech industries
and immigration of technical and professional people, as well as in a wide
variety of other activities from high-tech parks to continental fiber optic
networks can be envisaged under investment incentives designed to prevail
in a very competitive regional environment.
This, together
with the strong recuperation of its international banking center, can be
seen as heralds of a second Singapore in the middle of the American continent,
a point of reference not to be ignored in the conceptions of the new economy
of the 21st century. |
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Article
Index ~ Panama
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