Exporting guide to

Panama

Overview

Panama offers regional as well as bilateral opportunities for UK companies. Its strategic geographical location, dollarised economy, and social, political and economic stability make Panama an excellent base from which to do business in the region. Panama's government actively promotes policies to attract foreign companies and stimulate innovation, through the creation of a series of Special Economic Zones (SEZs).

Trade statistics

£370.0 million total UK exports to Panama for the four quarters to the end of Q3 2023

(Source: ONS UK total trade: all countries, seasonally adjusted
Last updated: January 2024)

92nd largest UK export market

(Source: ONS UK total trade: all countries, seasonally adjusted
Last updated: January 2024)

less than 0.1% of total UK exports for the four quarters to the end of Q3 2023

(Source: ONS UK total trade: all countries, seasonally adjusted
Last updated: January 2024)

Political and economic stability

One of the most politically stable countries in Latin America, Panama has been 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; 13th 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).

Top five UK goods exported to Panama , in the four quarters to the end of Q3 2023

Goods Value (£ million )
Medicinal & pharmaceutical products 33.6
Miscellaneous electrical goods (capital) 15.0
Electric motors (capital) 12.9
Cars 12.7
Mechanical power generators (intermediate) 8.6

Source: ONS Trade in goods: country-by-commodity exports
Last updated: February 2024
Download the latest trade and investment factsheet for Panama.

Panama: at a glance

Economic growth

10.8%

Actual figure (IMF, 2022)
The UK is 4.1% (IMF, 2022, actual figure)

GDP per capita

$17,410

Actual figure (IMF, 2022)
The UK is $45,461 (IMF, 2022, projected figure)

Currency

US dollar

Business language

Spanish

You may need a translator

Time zone

GMT -5

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Opportunities for exporters

Panama's geographic position, its connectivity, and a sophisticated set of incentives has made the nation a hub to 181 multinational companies. They include British giants such as AstraZeneca, Polestar, Inmarsat, Haleon, GSK, Aggreko, Biwater, Diageo, JCB, G4S, BT and others.

Check for trade barriers

Trade barriers, such as tariffs or taxes, can raise costs, cause delays, or even stop you from exporting. Check for any issues that may impact your business when exporting.

See current trade barriers

See resolved trade barriers

Check duties and customs

Find information on how to export goods from the UK. View the duties, rules, restrictions, and the documents you need for your products.

See current duties and customs procedures

Doing business in Panama

Preparing to export

Taxation

The UK and Panama have signed a double taxation agreement, meaning the same income is not taxed twice.

Panama offers all available incentives equally to Panamanian and foreign investors.

VAT

If you are registered for VAT, it may be possible to zero-rate the goods you export to Panama, provided certain conditions are met.

All imports into Panama and some services are subject to 7% VAT (ITBMS). Certain items are exempt, including pharmaceuticals and food and school supplies.

Import duties

Duties are assessed and set in proportion to the cost, insurance and freight (CIF) value. The Panamanian government has reduced tariffs to meet the requirements of World Trade Organization (WTO) membership.

UK-Central America trade agreement

The UK and Central America have a free trade agreement that entered into force on 1 January 2021.

This agreement includes provisions on:

  • trade in goods - including provisions on preferential tariffs, tariff rate quotas, rules of origin and sanitary and phytosanitary measures
  • trade in services
  • intellectual property, including geographical indications
  • government procurement

Operating in Panama

Risks

There are some challenges to doing business in Panama. These include:

  • bureaucracy
  • lack of clarity and transparency in the public tendering process
  • slow judicial system

Read the overseas business risk for Panama for more guidance on the challenges of doing business there.

Using agents and distributors

You are advised to use a representative, distributor or commission agent with a commercial licence. Securing exclusivity for a buying agent can be hard due to the competitive conditions of the market.

You must have a local counterpart or direct presence to participate in any Panamanian government procurement bidding processes.

Tax free zones

Free trade zone parks in Panama are special economic zones which grant labour, migratory and tax benefits to the companies established within.

The Colon Free Zone (CFZ) is the largest free-trade zone in the Western Hemisphere and one of the most effective distribution channels for accessing Latin American and Caribbean markets. About 2,500 companies, including well-known brands, have operations in the CFZ. The CFZ focuses on B2B activities related to the import and re-exports of products without adding value.

Panama Pacifico follows a special economic regime offering tax incentives, import duty exemptions and immigration solutions for companies and investors. Companies established in this special economic zone operate distribution centres, conduct light manufacturing, and back-office and call centre services.

Language

The national language in Panama is Spanish. English is spoken by some people in government and business but is not universally spoken.

Most business documentation must be completed in Spanish.

Intellectual property

Intellectual property (IP) rights are territorial and rights granted in the UK do not provide protection elsewhere. You should consider getting IP protection abroad if you want to trade overseas or sell to overseas customers via the internet.

The Intellectual Property Office provides practical information to help you protect, manage and enforce your IP abroad. Further support for British businesses can be found through a network of IP attachés, based in key UK export markets.

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