Tag Archives: Free Trade

Panama – City of Knowledge offers no taxes for research and high tech corporations

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Panama has established City of Knowledge in order to attract research and high tech corporations. This includes internet commerce, bio and nano tech corporations. Only 15 minutes drive from down town Panama City it also offer great life style possibilities.

 

Panama City, Republic of Panama     Picture courtesy of Photoatlas

City of Knowledge

Being part of the City of Knowledge implies a commitment to innovation and sustainable development, but it also involves a broad range of benefits designed to make your operations more effective.

Here are some of the direct benefits for affiliates and users recognized by the City of Knowledge:

  1. Tax and immigration benefits through affiliation to the City of Knowledge Foundation project.
  2. Telecommunications, IT and educational technology services, including an intelligent high-tech center with the required capacity for teleconferences, distance learning, fast internet connections, and other services.
  1. A Point of Presence -POP- with direct access to the land portion of 5 International Fiber Optic cables that go across Panama (PAC, SAC, ARCOS, Pan-American and MAYA).
  2. Infrastructure and buildings in good maintenance condition, easily adaptable to various uses.
  3. Technical, administrative and consulting services. Constant electricity flow (99.9%) with redundant power supply from the Panama Canal thermal plant located 300 m (328 yards) away in the Miraflores locks.
  4. Complementary accommodation and catering service.
  5. Sports and recreation facilities.
  6. Access to the major higher learning and scientific research centers in the country.
  7. Access to the Panama Canal Basin, a living laboratory for scientific research and technological innovation on advanced tropical ecosystem management.
  8. Central location: next to the Panama Canal, 15 minutes from downtown Panama City, 5 minutes from Amador resort and 45 minutes from Colón city, located on the Atlantic entrance to the Panama Canal.

Here are the incentives for those participating in the project under Executive Order # 6 of February 10, 1998, which states the basis for the Panamanian State’s support to the City of Knowledge Foundation.

Tax Benefits

  1. Exemption from all taxes, levies, fees or import duties on machines, equipment, furniture, vehicles, appliances or materials necessary for the operation of companies accepted into the City of Knowledge Technopark.
  2. Exemption from Service and Personal Tangible Asset Transfer Tax (ITBMS) on machinery, equipment, vehicles, appliances and materials purchased or necessary for the operation of companies accepted into the City of Knowledge Technopark.
  3. Exemption from any taxes, fees, duties or levies on overseas money remittance when such money remittance or transfer is done for the purposes of companies accepted into the City of Knowledge Technopark.
  4. Innovating companies producing, assembling or processing high-tech goods or rendering similar services for sale in the local or international market at the International Technopark of Panama (ITP) will have the following benefits:
    1. Their activities, operations, transactions, procedures and transfers of personal and real property, purchase and import of equipment and construction material, raw materials, machinery, tools, accessories and supplies will be a hundred percent free of direct taxes, levies, fees, duties and national taxes. This includes income tax exemption for companies.
    2. Their capital will be free from direct national taxes, including patent or license tax.

Immigration Benefits

The State will grant special visas to foreign staff entering the country to contribute to the development of the City of Knowledge project. For further information, see the Immigration and Naturalization Bureau website.

Labor Benefits

Companies affiliated to the City of Knowledge are authorized to hire any international staff necessary for their operation.

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Malta reduce taxes for both local citizens and foreign investors

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Malta’s Minister of Finance, Economy and Investment Tonio Fenech has announced numerous tax measures in the territory’s budget for 2012, many of which reduce the tax burden on islanders and enhance the island’s appeal to international investors.

Among the latest changes, royalties income derived from copyright-protected books, film scripts, music and art will now be tax exempt in Malta. The announcement follows the decision in the 2010 Budget that royalties on patents would receive an exemption.

To further promote Malta as a hub for innovation and product development, the 15% personal income tax scheme – aimed at attracting skilled persons engaged in certain fields to Malta – is to be extended to include international professionals specializing in the development of digital games.

In addition, Maltese companies which commission educational digital games will be given a tax credit up to a maximum of EUR 15,000 (USD 20,000).

The government has also announced significant tax cuts for parents with the introduction of a new ‘parent computation’ in addition to the current single and joint computation. This will apply to taxpayers who are a parent of at least one child under the age of 18 (or 21 if the child is in tertiary education) and entitle claimants to a 0% income tax rate on the first EUR 9,300 of income. A taxpayer newly transferring to parental computation and with an income of EUR 21,200 would for instance see a reduction in income tax payable of EUR 420 per annum compared to the single computation system, according to Fenech.

In addition, tax allowances for parents sending their children to private, fee-paying schools will be significantly increased.

Other measures include the introduction of a new car scrapple scheme, worth 15.25% of the value of the new car when trading in an older model, with the benefit capped at EUR 2,000. Registration taxes for older vehicles will be hiked from January 1, 2012.

Tax concessions are also to be introduced for property owners for the restoration of certain buildings.

Excise duty on cigarettes and tobacco will increase by 5.8% and 8.5%, respectively, and tax on bunker fuel and cement is also due to rise.

The government also intends in the new year to merge the Inland Revenue Department and value-added tax department, and to hold a VAT amnesty to allow taxpayers to regularize their tax affairs.

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Barbados to tap Latin American trade opportunites

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Barbados Minister of Tourism, Richard Sealy has welcomed the ‘highly productive’ meetings held with officials and business leaders in Panama aimed at enhancing bilateral trade and boosting tourism receipts for both countries.

Both countries committed during the five-day trip to enhance bilateral trade and look at opportunities for exporters in Barbados to tap the Latin American market using existing infrastructure and trade arrangements, including through Panama’s Colon Free Trade Zone.

The Colón Free Trade Zone is situated at the Atlantic gateway to the Panama Canal and acts as a tax-free re-export hub. More than 2,500 companies are established there, shipping more than USD 16bn of goods annually.

Representatives of the Chambers of Commerce from the Organisation of Eastern Caribbean States have praised the initiative, stating that the Caribbean needs “to work together to realise tangible trade benefits and the mission was a good start”. They urged Caribbean territories to work together on international trade issues rather than competing with one another.

Talks were also held for the first time with Copa Airlines on establishing air links between Barbados and Panama.

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Hong Kong Tops Economic Freedom Index

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Hong Kong has once again topped the Fraser Institute’s Economic Freedom Index, which measures the degree to which the policies and institutions of countries are supportive of economic freedom.

According to the report, Hong Kong scored highly across all of the five categories which are used to calculate index scores, including size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labor, and business.

Hong Kong has topped the Fraser Institute’s 141-country ranking every year for the past three decades. This year, Singapore, New Zealand, Switzerland, and Australia were placed after Hong Kong in the top five.

The United States experienced one of the largest drops in economic freedom, according to the report, falling to 10th place overall from sixth in 2010. Much of this decline is attributed to higher spending and borrowing on the part of the US government, and lower scores for legal structure and property rights.

“The link between economic freedom and prosperity is undeniable: the countries that score highly in terms of economic freedom also offer their people the best quality of life,” said Fred McMahon, vice-president of international policy research at the Fraser Institute, a Canadian public policy think tank.

Commenting on this year’s index results, Hong Kong Chief Executive Donald Tsang remarked that economic freedom was “part of Hong Kong’s DNA”.

“In such testing times, it is important for an externally oriented economy such as Hong Kong to remain true to our philosophy. That means strong fiscal discipline, low taxes, open markets, free flow of information, goods and capital, clean government and a level playing field for business,” Tsang said in a speech September 20.

“The fact that we have held true to these beliefs for decades is no doubt one reason why Hong Kong has consistently ranked so highly in the league tables of economic freedom. As the old saying goes: ‘If it ain’t broke, don’t fix it.'”

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Ukraine – Trade at a crossroad

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As Russia attempts to lure the Ukraine into joining a proposed four-country economic bloc with promises of cut-price oil, Ukrainian authorities must decide whether to forgo an EU-Ukraine trade pact, being negotiated currently, or look to Russia, Kazakhstan and Belarus, for future economic and trade cooperation.

Speaking to parliament on April 7, Ukrainian President Viktor Yanukovych indicated that the nation would throw its lot in with the EU because the Ukraine would be unable to do both.

Under the terms of the Ukraine-EU free trade agreement, disclosed by the European Union in February 2010, the EU said that Ukraine is free to conclude other free trade agreements, but warned that it “would be difficult to negotiate a free trade area with the EU if [the Ukraine] was to join a customs union with other countries with which the EU’s trade is not liberalized and which apply a common customs tariff to their imports from countries outside that customs union,” as the case would be in the four-party bloc.

Yanukovych said Ukraine would welcome ‘a 3+1 agreement, which would provide preferential tariffs with the three nations, but would preserve greater national and economic sovereignty and crucially would enable the nation to continue the ongoing trade liberalization agenda with Europe.

In an almost immediate response to the President’s comments, Gazprom, Russia’s gas exporter, said that membership of the customs union would enable the Ukraine, which is largely dependent on Russian gas, to benefit from Russian domestic gas prices, rather than the European price (for Russian gas) it currently pays. Gazprom surmised that such an agreement could benefit Ukraine to the tune of USD 8 bn annually in cut-price gas.

Russian Prime Minister Vladimir Putin is expected to take up this issue during his visit to the Ukraine on 12th April 2011.

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