Table of Contents
Best Prospects for U.S. Exporters
Special Features: Panama Investment Opportunities
Listen to a Market Audio Brief about Panama featuring Commercial Officer Robert Jones
Introduction: Why Panama?
Due to its strategic location at the mouth of two oceans, and the meeting of two continents, Panama, has historically served as the crossroad of trade for the Americas. Today the country is not only a maritime shipping and air transport hub, but also an international trading, banking, and services center. Trade liberalization and privatization over the last several years, along with the hemispheric movement toward Free Trade Agreements, while still in progress, will inevitably increase Panama's global, regional and sub-regional prominence. Panama's dollar-based economy offers low inflation and zero foreign exchange risk. Its legal and regulatory regimes are business friendly. Its government is stable, democratic, and reform minded and actively seeks foreign investment in all sectors, especially services, tourism and retirement properties.
Panama's economy is based primarily on a well-developed services sector, accounting for about 80 percent of GDP. Services include the Panama Canal, banking, the Colon Free Zone, insurance, container ports, and flagship registry. Manufacturing and mining account for roughly 14 percent of GDP. In a national referendum in 2006, Panamanians approved the $5.25 billion project to expand the capacity of the Panama Canal to accommodate the new mega ships. This project, in conjunction with the expansion of its port capacities on both the Atlantic and Pacific coasts, will solidify Panama’s unique global logistical advantage. All of these initiatives will generate enormous requirements for technology, goods and services. Participation is expected to be global and competition fierce. Panama has potential for substantial growth in the areas of electric power generation, health care services, port services, land development, road construction, water distribution and purification, telecommunications, tourism, and many others.
The Colon Free Zone (CFZ), is the world largest free trade zone, importing and re-exporting over $14 billion worth of goods annually. It is a vital trading and transshipment center serving the region and the world. Goods arrive from all over the globe to be resold, repackaged, and reshipped. The CFZ offers U.S. exporters a unique entry point for the entire region. Firms sell their products to “traders” in the CFZ who then ship the products to a variety of other countries via their developed network of distributors.
Consumer attitudes and many brand preferences are similar to the U.S. American television, radio and U.S. magazines are all available and popular in Panama. Panamanians frequently travel to the U.S. for vacation, medical treatment, study and business. Their buying patterns and tastes are similar to ours.
U.S. goods and services enjoy a reputation for high quality and are highly competitive. Panama boasts the highest per capita GDP in the region at around US$ 4,300 (2006).
Panama is on record as being in favor of free trade agreements, and recently signed a bilateral Trade Promotion Agreement (TPA) with the U.S. The TPA has been ratified by the Panamanian congress and is expected to be submitted to the U.S. Congress for ratification before the end of 2007. Due to its open economy, Panama has no market access problems. One of the most common market entry options is to appoint an agent or distributor. Another option is to find a local partner who can provide market knowledge and contacts. Other businesses have been successful via licenses or franchises.
(Source: CIA World Fact book/U.S. Department of Commerce/ U.S. Census Bureau)
Total Area |
78,200 sq km (slightly smaller than South Carolina) |
Population |
3,242,173 (July 2007 est.) |
Commercial Center |
Panama City, Colon, David |
Languages |
Official: Spanish |
Government Type |
Republic; executive branch dominates government structure; unicameral legislature |
Natural Resources |
Gold, copper, hydropower, fishing |
Primary Industries |
Construction, brewing, cement, sugar milling, foods |
Work Force |
Total: 1,441 million Distribution: agriculture 7.2%, industry 16.4%, services 76.4% |
Imports |
Capital goods, foodstuffs, consumer goods, chemicals, wheat, paper, etc, etc. |
Exports |
Bananas, shrimp, sugar, coffee |
Main Imports from the U.S. |
Agriculture and industrial machinery; corn, wheat, soybeans, and organic chemicals, automotive parts, security, software, and electrical equipment, and aircraft and parts |
Main Exports to the U.S. |
Fish, bananas, coffee, fresh fruits, shrimp, sugar |
Best Prospects for U.S. Exporters
The U.S. is currently Panama’s main trading partner. The abundance of high quality, competitively priced products, afford U.S. exporters a competitive advantage over other trading partners, including European and Far East countries. This advantage will be enhanced by the proposed U.S./Panama Trade Promotion Agreement.
The following sectors have been identified as Panama’s Best Prospects for 2008:
1. Telecommunications Equipment
2. Construction Equipment & Supplies
3. Travel & Tourism
4. Material Handling Equipment
5. Environmental Equipment/Services
6. Medical Equipment & Supplies
7. Electric Power Systems
8. Hotel & Restaurant Equipment & Supplies
9. Security and Safety Equipment (Niche Markets)
10. Cosmetics and Toiletries (Colon Free Trade Zone)
Read more about Panama’s Best Prospects: http://www.buyusainfo.net/docs/x-3421748.pdf
According to Panama's constitution, nationals and foreigners are treated equally under the law. Both Panamanian and foreign companies must fulfill the same basic requirements to organize and operate most types of business activities in Panama. There are restrictions on foreigners participating in retail trade and practicing certain professions. In practice, however, there are legal ways to overcome these restrictions. U.S. firms interested in retailing should consult a local attorney.
Business practices in Panama are very similar to those in the United States. Business tends to be direct and straightforward. On average, Panama City accounts for 65% of total national sales of consumer goods. The remaining 35% is distributed among the principal cities of David, Colon, Santiago and Chitre.
Generally, the marketing channel structure in Panama is simple. Direct importers act as wholesalers and in many cases also as retailers. This situation is common in the case of apparel, automotive parts and hardware products. In the case of consumer goods, food and medicines, the retail operation is separate from the wholesale operation. For industrial goods, sales are normally handled by local exclusive agents or distributors. In other cases, local firms order directly from U.S. brokers or the manufacturer.
Some of Panama's major importers are also regional distributors for Central and/or South America, with warehousing facilities located in the Colon Free Zone (CFZ). Generally, CFZ importers/distributors have affiliated stores in Panama City for retail sale to the local market.
There is no law regulating the relationship between international suppliers and local agents and distributors. This relationship is only governed by the private agreements made between the parties involved. In cases of contract termination or disputes, the private contract clauses prevail over any other document or practice.
Individuals may engage in business activities in their own names or through legal entities. The most commonly adopted form of legal entity is the corporation (sociedad anonima). Other types of legal entities commonly used in Panama are: general partnerships, simple limited partnerships, joint stock partnerships and limited liability companies.
Key factors for market success in Panama are: high quality, customer service, brand-name recognition and attractive packaging. U.S. products targeting the middle to upper-middle income market are usually competitive. Panamanians have a penchant for high quality U.S. products.
Success among distributors is often decided by quality of the training, counseling and support they receive from their principals. U.S. companies should focus on providing U.S.-level training and technical assistance to their distributors and making sure they have the resources to provide after-sales support, including spare parts, service equipment, and quality service to the customers.
Establishing an office in Panama is a straightforward process. There is plenty of office space available with many options related to location and cost. Panama has one of the most modern and flexible corporate law frameworks in Latin America.
In order to engage in commercial or industrial activities, all corporations, partnerships or individual must obtain proper authorization from the Ministry of Commerce and Industry. The Government has implemented an Internet based registration system that facilitates obtaining commercial licenses.
Consumers with high disposable income follow sophisticated U.S. and European consumption patterns. Many high-end U.S. and foreign brand names are represented in Panama. An aggressive marketing strategy is usually necessary to succeed in this trend-conscious market.
Panama does not have a Central Procurement Office such as the U.S. General Services Administration (GSA). The National Assembly passed Law No. 22, dated June 27, 2006 which regulates government procurement and other related issues. One of the highlights of the new law is the establishment of an internet-based procurement systems (Panamacompra portal) which requires all purchases to be announced in this system, thus allowing for more flexibility, transparency and speed in government purchases.
The Panama Canal represents significant business opportunities for U.S. exporters with annual purchases ranging $200 - $300 million including port and marine equipment, building materials, industrial equipment and transportation materials and equipment. Procurement will now increase due to the Canal expansion project which has begun this year and is expected to be completed by 2014. All Canal procurements are announced on their website at: www.pancana.com. Despite being a government agency, the Canal is a unique organization that by constitutional law is autonomous, runs a profitable and efficient operation, has full control over its budget, and has an excellent payment record.
Panama Canal – Gatun Lokcs – Atlantic Side
Television and newspaper advertising are the promotion tools of choice for the majority of distributors of U.S. products. E-mail marketing is becoming increasingly popular, especially for services. Panama has a very competitive advertising market, with standard prices and very good production quality. Additionally, trade shows, specialized seminars and exhibitions are effective tools for trade promotion. Special sale prices during events such as mother’s and father’s day, back to school and Easter are usually advertised in newspapers during weekends.
Most foreign manufacturers of consumer products maintain a high profile presence in the country through newspaper ads, large billboards, sponsored sports events, and TV advertising. Radio advertising is mainly utilized outside of metropolitan Panama City.
You can obtain more information about Panama’s commercial and economic situation by accessing the following business web sites:
http://www.zonalibredecolon.com.pa
http://www.panamcham.com (Panama American Chamber of Commerce)
http://www.panacamara.com (Panama Chamber of Commerce)
http://www.capac.org (Construction Industry Chamber)
http://www.camaramaritima.org.pa (Maritime Industry Chamber)
The U.S. Commercial Service with its network of U.S. Export Assistance Centers in the U.S. and international offices located in U.S. Embassies and Consulates around the world is available to assist U.S. exporters doing business in unfamiliar markets.
Please read a Success Story from Panama:
Tampa Tank, a manufacturer of steel structures for the petrochemical industry, was one of the companies participating in the trade mission to Panama, organized by the Greater Tampa Chamber of Commerce (GTCC), with assistance from the Tampa/Clearwater USEAC, and supported by International Trade Specialist George Martinez (who helped in recruiting for this trade mission). CS Panama organized the trade mission's multi-faceted program in Panama.
This 40-member Trade Mission, one of the largest to visit Panama in recent years, had a very productive schedule, including one-on-one business appointments; visits to the Free Trade Zone in the city of Colon, the Panama Canal, the "City of Knowledge" (a research and education center); meetings with government and private sector organizations; and a reception at the U.S. Ambassador's residence.
Prior to the mission, with CS Panama's support Tampa Tank had been able to contact Stephen Walling, a Director of the Panamanian firm Colon Oil and Services. Colon Oil & Services specializes in the storage and sales of oil products. The Panamanian company needed to increase its fuel storage capacity in its facilities in Colon.
During the Trade Mission, Tampa Tank representatives continued talks with Colon Oil & Services, and after evaluating the Tampa Tank proposal for building new storage facilities, the Panamanian company decided to accept the $4.2 million proposal, including $3.7 million in U.S. components.
The contract was signed during the reception that U.S. Ambassador William Eaton hosted in honor of the Tampa Trade Mission, with the presence of Tampa's Mayor Palm Iorio, the Chairman of the GTCC, the Director of the Tampa Port, and the Chairman of the Tampa Port Authority.
This export success was a major highlight of the Tampa visit, and the rest of the mission members were also very successful in developing new opportunities.
Industry/Market Research Reports are structured market overviews and updates produced by the Commercial Service in Panama City, Panama. These reports provide succinct industry-specific information that can help determine market potential, market size and competitors for U.S. products and services. Market research briefs produced by the U.S. Commercial Service in Panama are currently available on the following sectors:
![]() | Insurance Services |
![]() | Financial Services |
![]() | Electric Power Generation Equipment |
![]() | Safety and Security Equipment |
![]() | Computer Software |
![]() | Computer Equipment |
![]() | Telecommunications Services |
![]() | Telecommunications Equipment |
![]() | Air conditioning |
![]() | Cosmetics and Toiletries |
![]() | Franchising |
![]() | Hotel and Restaurant Equipment |
![]() | Health Services |
![]() | Port Equipment |
![]() | Water and Wastwater Equipment |
![]() | General Services (Warehousing/Wholesaling) |
![]() | Travel & Tourism |
![]() | Electronic Commerce |
![]() | Gaming Equipment |
![]() | Architectural/Construction/Engineering |
Industry/Market Research Reports are available through the U.S. Government’s Export Portal:
http://www.export.gov/mrkresearch/index/asp. Otherwise, prospective exporters may send requests to our Panama City office via e-mail: Panama.City.office.box@mail.doc.gov
EXPOCOMER - Sponsored by the Chamber of Commerce, Industry and Agriculture of Panama, in Panama City, at the Convention Center ATLAPA, annually. It is held in the month of March, and is the largest annual international exhibition in the country, and occupies all of the ATLAPA’s 6,000 square meters of interior space, as well as some exterior space. The U.S. has traditionally featured one of the largest pavilions in the show. Next show is March 3-8, 2008. The American Chamber of Commerce and Industry of Panama will manage the U.S. Pavilion.
Contact: David Hunt, Executive Director AmCham, Tel. (507) 301-3881, Fax (507) 301-3882
E-mail: dhunt@panamcham.com. Website: www.panamcham.com
Contact: Madelene Lopez, Executive Director, Expocomer, Tel. (507) 207-3433, Fax (507) 227-0115. E-Mail: expo@expocomer.com. Web site: www.expocomer.com
PANAMA INVESTMENT OPPORTUNITIES
Panama has recorded one of the highest economic growth rates in the region (above eight percent during the last two years). The following are the major projects expected to continue fueling the growth of the economy during the next few years.
MARITIME OPPORTUNITIES
The Panama Canal Expansion
![]() | One of the largest and most ambitious projects in the region |
![]() | In the last four years demand for Post Panamax vessels has increased significantly due to efficiencies gained with containerized cargo (50 percent of ships currently being ordered by the largest shipping lines are post-panamax) |
![]() | Cost of the project was estimated at $5,250 million |
![]() | A new set of locks to accommodate post Panamax vessels will be built |
![]() | Tremendous commercial opportunities for U.S. firms, including maritime equipment, construction equipment, heavy machinery, engineering and architectural services. |
Port Expansion
The main port operators have announced new investments amounting to US$350 million during the next few years. Panama Ports Company (PPC) intends to implement the third stage of the expansion of the Port of Balboa at a cost of US$200 million, after investing US$120 million in the previous stages. Manzanillo International Terminal (MIT) is planning to invest an additional US$35 million in dock expansion to service feeder vessels. The Colon Container Terminal (CCT), announced a US$55 million investment to implement the second stage of an expansion program to increase its service capability and container storage area. There are other port projects intended to increase cruise ship handling capability as well as expand fishing and general cargo ports in other parts of the country.
New Port on the Pacific Ocean
The Panamanian Maritime Authority (AMP) has targeted the construction of a new port to be located in the Canal entrance of the Pacific Ocean. It is intended to have an extension of 200 has/494.18 acres, with 1800 lineal meter of container port and access yard. The largest shipping companies have shown interest in this project
Energy Projects
![]() | Studies have identified potential areas for development projects of alternative energy resources, such as: wind, solar, biomass, and natural gas |
![]() | Twelve hydroelectric projects in the provinces of Chiriqui and Bocas del Toro, would represent estimated investment of $680 million for the next five years |
![]() | Two Regional refineries under consideration for the processing of 160,000 MB/D, investment of over $10 billion (Occidental Petroleum and the Puebla-Panama program). |
![]() | Great potential development of ethanol production made of sugar cane |
![]() | Under consideration a gas pipeline from Cartagena, Colombia to Colon City, Panama via the ocean. Investment $350 million. |
![]() | The electrical interconexion with Central America is currently being implemented. |
Telecommunications
![]() | Two new cellular concessions will be given in 2008 |
![]() | Panama has more than 1.5 million cellular lines and 370,000 fixed lines |
![]() | Panama is developing the call center industry (Dell has a large operation) |
![]() | Panama is a submarine fiber optic cable crossroad (five major cables pass through Panama) |
Contact Us Today
The U.S. Commercial Service — Your Global Business Partner
With its network of offices across the United States and in more than 80 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/
The U.S. Commercial Service in Panama can be contacted via e-mail at:
Robert O. Jones, Commercial Counselor,
Phone: 507-207-7388
Fax: 317-1658
Enrique Tellez, Senior Commercial Specialist
Phone: 507-207-7080
Fax: 507-317-1658
Jeane Zuniga, Commercial Specialist
Phone: 507-207-7392
Fax: 507-317-1658
Diana Lozano, Commercial Assistant
Phone: 507-207-7242
Fax: 507-317-1658
Or visit www.buyusa.gov/panama
Secretary Carlos Gutierrez and CS Panama Staff during his recent visit to Panama.
Panama City, Panama – September 13, 2007
Enrique Tellez, Senior Commercial Specialist
Luis Saldaña, Clerk/Driver
Secretary Gutierrez
Jeane Zuniga, Commercial Specialist
Robert Jones, Senior Commercial Officer
Diana Lozano, Administrative Assistant