During the period of 2010 – 2014, Panama was predicted by the Latin Business Chronicle to have the fastest growing economy in Latin America. When you take a closer look at Panama’s business development, you will see that this prediction came through.
Since 2014, Panama has remained in constant economic growth, with new companies, both local and international, being opened regularly. Therefore, if you plan on exporting to Panama, we are confident that you will make fair use of its growing economy. Discover all you need to know about Panama business opportunities, and familiarize yourself with export procedures in order to ensure your success!
Let us first go over the business opportunities that Panama has to offer. Due to its geographic location, most of Panama’s economy is based on a strong service sector, mainly eCommerce, international trade, and tourism. Continual development, along with sound business policies, have made it possible for Panama to become the largest regional financial center in the region.
Willing to find out what to export to Panama? According to the OEC, Panama has imported $29.5 billion in various goods in 2019. Among the top exports to Panama are:
Exporting to Panama is quite similar to exporting to any other developed country in Latin America, so there are no notable challenges to mention. The only things to consider are the few import restrictions and getting a commercial license. Also, it is recommended to find a Spanish speaking logistics partner, as you might run into a language barrier with local authorities and companies.
A good idea is to also consult with a Panama lawyer and/or customs broker before setting up any business or trading operations. You may run into some difficulties with documentation if you do not take care of it beforehand as Panama’s judicial system can be arduous to deal with. This is especially important to remember if you require patent protection for your intellectual property. All in all, do yourself a favor and find a good Panama representative ahead of time.
While Panama is relatively free when it comes to imports, there are certain items that are outright prohibited. Among them are:
The first thing to note about customs clearance in Panama is that all import duties are on an ad valorem basis. This means that the value of the tax is based on the transactional value of the property. In addition, all items imported to Panama have a 7% transfer or added tax, along with charges due to handling. Notable exceptions are:
If you are importing from the U.S., you may be able to import your items duty-free. This is due to the TPA (Trade Promotion Agreement) between Panama and the U.S., which makes over 87% of U.S. products duty-free for Panama import. It is advisable to study the customs info website and learn which items are currently under the duty-free exemption. Also, ensure that you state the country of origin on your products in order to avoid any trouble. Apart from that, you should know that Panama has adopted the Harmonized System of Tariff Nomenclature in 1995. This has made importing regulations and requirements similar to most countries that we have mentioned in previous articles.
If you have a commercial license, you can freely import goods into Panama without any additional import licenses. A commercial license is also mandatory if you wish to do business in Panama, which is the main reason to obtain it. Apart from it, you will need a special import permit for all types of ammunition, firearms, or fertilizers. Furthermore, if you plan on importing non-food agricultural products, you will need to get the necessary Phytosanitary permits. While not mandatory, we would also advise you to get cargo insurance, as it can be quite helpful if something unforeseen happens during the transportation journey,
Proper labeling is also crucial in Panama, and it is important to ensure that it has been done according to standard requirements. Here you simply need to adhere to the same regulations that are imposed in the U.S. You should also ensure that labels come in both English and Spanish in order to avoid any issues down the line. Every label should state:
If there are any safety warnings for your products, ensure that they are stated in Spanish and are clearly visible.
Due to various government initiatives and foreign investments, the traffic infrastructure in Panama is expanding. The most common way of international shipping to Panama is by ocean freight. This is mostly due to the Panama Canal that sees over $270 billion of cargo on a yearly basis. Ocean freight is also a common option for importing to Panama through five seaport areas:
The largest airport in Panama is the Tocumen International Airport, which you’ll you will probably use if you plan to ship by air.
For on-road transport, you will probably need to organize local transport services. Before you do that, keep in mind that the language barrier can be a problem and that you should think of getting a specialized freight forwarder that can handle all the coordinations on your behalf.
With all things considered, exporting to Panama can be a great idea. The infrastructure is sound, the economy is healthy, and the general tariffs and regulations are quite lenient. With a reliable freight forwarding partner, you can easily deal with shipping to Panama and ensure that your cargo arrives on time and safely.
As always, we would advise you to properly research the Panama market and its import/export procedures before you launch your project. Only then will you be ready to develop your export strategy and hopefully see terrific results.
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