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flag Panama Panama: Selling and Buying

In this page: Market Access Procedures | Reaching the Consumers | Distributing a Product | Organizing Goods Transport | Identifying a Supplier

 

Market Access Procedures

International Conventions
Party to the Montreal Protocol on Substances That Deplete the Ozone Layer
Main International Economic Cooperation
Panama joined the WTO in 1997. It made a free-exchange agreement with Taiwan (2004), Salvador (2003) and Canada (2009) on the elimination of tariffs in sectors of industry, agriculture, forestry and fishing. The country is currently negotiating with the United States. Panama has also shown interest in negotiating with MERCOSUR and has been invited to join the G3 (which unites Venezuela, Colombia and Mexico). Finally, Panama signed a Free Trade Agreement with Canada.
Non Tariff Barriers
There are few restrictions regarding import. The most important restrictions are set for products considered as dangerous for Health or which are against law and order. Certain goods require a license from the Ministry of Agriculture, or from the Department of Trade and Industry (weapons, plants, seeds and live animals). The non-tariff barriers considerably restrict the freedom of import (very strict quotas, reference prices and excessive sanitary standards).

Colon Free Trade Zone (FTZ) or Zona Libre de Colon (ZLC) on the Atlantic coast, created in 1948, ranks second in the world after Hong Kong. In the FTZ, some particular products can be imported, stored, modified and re-exported, without any need to go through customs whether on entrance or on exit, nor to pay for any special taxes. The strategic location, in the centre of America and near the Panama Canal, offers an important potential for the development of international trade. The most important products of the FTZ are: clothes, broadcasting devices, synthetic clothes, shoes, watches, perfume and fragrance, spirits, cigarettes and pharmaceutical products. The main suppliers of the FTZ are Hong-Kong, South Korea, Singapore, some European countries and the USA. The main customers are the Caribbean islands and the countries of Central America.

Customs Duties and Taxes on Imports
Duties are calculated "ad valorem" according to the CIF value ( Cost, Insurance and Freight), between 3% and 40%.


Customs Classification
About 50% of imports are exempt from duty.  There are 48 types of products which are subject to customs tariff equal or higher than 90%, such as agricultural and agro-industrial products (strawberries, potatoes, tomatoes and tropical fruits, amongst others ).

Imports on products that do not exist in the country are subject to duty of less than 27%. Imports are also subject to the equivalent of VAT, transfer of movable property tax and also a tax that is paid on the documents which  varies between 2 to 5% of the FOB (merchandise subject to custom duty) and from 5 to 8% (free merchandise).

Import Procedures
It is not necessary to obtain a license in order to import in Panama.  In actual fact, all companies with a trading license can freely import into Panama any product whatsoever that is unregulated.  A sanitary-zoo or phyto-sanitary permit is nevertheless required to import certain agricultural products.

 

In general, food products and beverages should be registered with the Panamanian food security authorities and should respect the requirements regarding hygiene and quality control.  Importing food products into Panamanian territory is forbidden if the products in question are not freely on sale in their country of origin.  It is the duty of the executive organ, on the request of the Ministry of Health to establish the sanitary rules relating to the fabrication, storage, importation and sale of medicines and subsidiary products.  It is forbidden to manufacture or to import into Panama these products without  them being analyzed or registered beforehand.

Main documents required by the Panamanian Customs authorities for import purposes:
-Import declaration (prepared by the Customs agent)
-commercial invoice (in English or Spanish to be provided in 4 copies)
-airline transport letter
-bill of lading (three copies)
-business permit number
-health or phyto-sanitary permit (in the case of animal or vegetable agricultural products)
-certificate showing that product are sold freely (in the case of products meant for human consumption including for example body lotion).

Importing Samples
Samples are not subject to customs duty as long as they are perforated or are marked not for sale.  Temporary importation is authorized for a 3 month period renewable 3 times for the same length.  A guarantee for the amount of the duty which would have been payable had it been a normal import has to be deposited in form of a certified cheque made out to the Public Treasury.  It is also possible to provide as deposit in the form of insurance.  Exemption can be partial or total.
 
 
For Further Information
Panama Customs General Management

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Reaching the Consumers

Marketing Opportunities

Consumer Behavior
Panama claims the highest GDP in the region; however only a minority of the population (20%) has a high purchasing power and the "price" factor is the most important issue for the majority of Panamanian consumers.
The well-to-do have similar consumption trends (goods and services) as those of the United States.  They appreciate quality or brand name products and the "price" factor is of secondary consideration when deciding whether to buy or not.
Consumer Profile and Purchasing Power
The consumption of Panamanian households is mainly basic needs and education.
Consumers Associations
IPADECU , Panamanian Institute for the Rights of the Consumer (Spanish only)
Authority for the Protection of the Consumer and of Competition , Spanish only
Main Advertising Agencies
PUMER advertizing agency (Spanish only)
Directory of advertizing agencies in Panama

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Distributing a Product

Market Shares
The distribution channels are simple; the direct importers either sell their merchandise in bulk or retail. With regard to massive consumption products (food and medicines), bulk and retail sales are done separately.  With regard to industrial products, sales are usually conducted by exclusive local agents or distributors and sometimes the local firms buy directly through brokers or producers.

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Organizing Goods Transport

Main Useful Means of Transport
With its canal, Panama is considered as one of the major transport logistics centers.  The country also has modern harbors on two oceans which are linked by a railway network, highways and international airports which  have equipment capable of catering for all sorts of cargo transport.
The railroad network is made up of one 47 mile-track and joins Balboa to Colon.  Transport capacity is on average 500,000 containers per year.
The road network comprises of 11,643 km of road, of which 4,028 are tarmac.
Ports
Colon container terminal
List of Panamanian harbors
Airports
TOCUMEN Interneational Airport Panama
Sea Transport Organizations
Panama Maritime Authority
Air Transport Organizations
Panama Civil Aviation Authority (Spanish only)
Road Transport Organizations
Transport and Traffic authority (Spanish only)

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Identifying a Supplier

Type of Production
Industry accounts for 13% of the GDP, the service industry is much more significant and accounts for some 81.1% of the GDP in Panama and provides approximately 70% of employment.  The main industries are construction, breweries, cement and other building materials as well as sugar grinding.

Business Directories

Multi-sector Directories
Catálogo de Alimentos y Bebidas - Food and beverage business directory in Panama.
Inpanamacity - Panama's business directory.
Paginas Amarillas - Panama's Yellow Pages.
Yellow Pages - Find a business in Panama.
 
 
Manufacturers Associations of the Main Industries
2 professional associations listed for Panama.
 
Trade Agencies and Their Representations Abroad
Panama Chamber of Commerce, Industry and Agriculture. (Spanish only)
Enterprises Federation
User Companies Association of the Colon free zone
Panamanian association of Entrepreneurs. (Spanish only)
 
 

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Last Updates: October 2014