Exporting guide to Panama
Political and economic stability
One of the most politically stable countries in Latin America, Panama is a dollarized economy since 1904. There is no central bank and limited levels of inflation are registered. Panama has one of highest GDP per capita in Latin America.
Regional hub and strategic location
The Panama Canal makes the country a regional logistic hub. According to the World Economic Forum, Panama ranks seventh in the world for the efficiency of its port infrastructure; thirteenth in the world for the efficiency of its air transport services and first in Latin America for the sophistication of its financial services (World Economic Forum, 2019).
Generous tax incentives
Panama has one of the lowest corporate tax rates in Latin America (25%), as well as the lowest sales tax in the region (7%) (World Bank, 2019). Withholding on dividends are 5% or 10% depending on the source. Interest is subject to withholding of 12.5%.
Opportunities for exporters
Panama's geographic position, its connectivity, and a sophisticated set of incentives has made the nation a hub to 157 multinational companies - including British giants such as GSK, Aggreko, Biwater, Diageo, JCB, G4S, BT and others.
Demand for OTC and prescription medicines
The strength of Panama’s economy has allowed public funding for healthcare services and medicines, currently worth over U$3 billion (UNIDO). There is growing demand in the pharmaceuticals and healthcare sector for over-the-counter (OTC) and prescription medicines. Therefore, there are opportunities for UK manufacturers of drugs - particularly for chronic disease treatment
Regional pharmaceutical hub
Panama aims to develop its manufacturing of finished pharmaceutical products, and research and development of new, innovative medicines. Panama aims to capitalise on its existing geographic and market access advantages related to its sophisticated logistic platform.
The UK’s strong reputation
Between 2015 and 2019 1,221 teachers from Panama’s public sector were trained in the UK. Suppliers from the UK have worked with Panama’s government in areas such as vocational training, curriculum development, methodology and certification.
Incentives and thriving regional academic institutions
Panama’s City of Knowledge initiative provides tax exemptions and immigration benefits for affiliated entities such as companies, academic programs, scientific and R&D institutes, creative industry related companies and international organisations. At present, the City of Knowledge project has 200 affiliated entities, and more than 180 entrepreneurs.
Major infrastructure projects
The government’s infrastructure portfolio comprises several transportation projects, including the construction of a cable car system connected to the Panama Metro, a 24 km coastal highway, and road rehabilitation works. Panama’s public-private partnership framework creates opportunities for UK businesses to take part in infrastructure projects.
Panama has been working for a decade to create a business-friendly regulatory framework. This includes legal and tax incentives to attract further investments as it continues to expand its transport and logistics hubs.
As part of the Paris Accords, Panama has committed to having 30% of energy consumption come from new renewable energy sources. Panama has the largest wind farm in the region and is making attractive incentives for auto consumption of solar energy. Currently only 8% of the energy consumption in Panama is generated from these sources.
Energy Hub for the region
With the Panama Canal expansion there are new terminals for LNG gas storage and the capacity of regasification. Panama has a privileged geographical position and is looking at interconnection with neighbouring countries like Colombia, as well as improving the Central America grid network.
Promoting electrical mobility
The government is proposing a new regulatory frame to incentivise electrical mobility in Panama. Currently there are almost 1 million vehicles in the country. The government wants to renovate its fleet, as well as public buses, with electric vehicle alternatives.
Supply of equipment
There are opportunities for UK businesses in areas such as secure cities with high demand for CCTV technology, surveillance systems, security screening, and satellite communications. Panama offers a wide range of opportunities for British firms that provide technological solutions such as tracking technology and command control, among others.
Panama is in the top 10 countries with the most cyber attacks in Latin America. Panama is an international financial centre, and consequently there’s increasing demand for cyber security to prevent loss of confidence in the system.