A group in Panama hopes to set up Latin America’s first fully functioning diamond exchange.

The proposed Panama Diamond Exchange would be based in Panama City, the country’s capital, and function as a gateway to the Latin American market, according to president and chief executive officer Charles Garavitt.

Garavitt said the Panamanian government is declaring the exchange a tax-free zone for 25 years. “You can bring and sell goods, free of tax,” he said. “This is the first time in the history of Panama the government has authorized a tax-free zone in the center of the capital.”

He noted that many Latin American diamond dealers used to do business with the Miami bourse, but that is harder now that U.S. officials have tightened up on visas. “The potential of the Latin American industry has never really been explored,” he added, noting it has 700 million consumers and 11,000-plus jewelry stores. “There is more money on that continent than people know.”

He said Panama is a good first outpost in Latin America because it is stable and sound economically. He also noted that Latin America is not only a consumer of diamonds but also a producer, with stones coming out of Brazil and Venezuela. He said he is working with Venezuela to increase its compliance with the Kimberley Process.

To house the exchange, which already has 250 members, Garavitt and associates hope to build a 50-story building that also will include a customs office, banks, and “state of the art security.” He also hopes to house a school and lab.

The exchange applied for membership in the World Federation of Diamond Bourses at its recent meeting in Amsterdam. The World Federation also received membership application from a new bourse in Australia.