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Panama is an attractive destination for businesses of all sizes. Its economy is booming, with a Gross Domestic Product (GDP) growth rate of 5.4% in 2019 and a projected growth rate of 4.2% for 2020. This growth is driven by several factors, including the expansion of the Panama Canal, the development of the Colon Free Zone, and the country’s commitment to free trade. 

The business benefits of operating in Panama are numerous. The country has a low corporate tax rate of 25%, and companies can take advantage of many tax incentives. The country has a well-developed banking sector and a stable currency. 

The corporate environment in Panama is also highly conducive to business. The country has a strong legal system and a well-developed infrastructure. Additionally, the government is committed to making the country an attractive destination for foreign investment, with several initiatives designed to attract and retain businesses. This article discusses how to enter and participate in the booming industry in the country.

Market entry approaches 

Panama is an excellent destination for businesses, offering a strong economy, numerous business benefits, and a corporate environment that is conducive to success. Companies of all sizes can benefit from the country’s attractive business climate and its commitment to free trade. Following are the ways to enter the market. 

Licensing the products

A reasonably easy approach to accessing a global market is licensing. In a licensing agreement, you permit a foreign business to produce and market your product in return for a royalty payment. You won’t have to pay the expenditures associated with opening a business in a foreign country, but you will have less control over how your commodity is presented or how your idea is put to use.

Other perks of licensing include bypassing some of the levies that are generally applied against exporters. There are, however, significant drawbacks, such as the potential loss of property rights and an absence of quality management.

Purchasing a local business 

Purchasing a local business can be an expensive option for entering a foreign market. In Panama, purchasing a local business is a rather simple process. The business climate here is secure and stable, and it is open to foreign investment. The nation also boasts a cutting-edge, effective justice system that is created to make buying local businesses easier. 

Before purchasing a local company, the buyer must review the company’s financial statements and assess the company’s assets. The buyer must also consider the company’s legal status, including any pending or past lawsuits. The person must also consider the company’s tax obligations. This includes understanding the company’s tax rate, the types of taxes it pays, and any other taxes that may be applicable. The purchaser must also check the company’s contracts and agreements to make sure they are current and compliant with all applicable regulations.


Exporting your goods to Panama is the most efficient and straightforward way to get involved in the marketplace there. Businesses must first and foremost make sure that all of their products adhere to the requirements set by the government before they can start exporting. This entails fulfilling all applicable regulations, such as safety and quality standards set forth by the nation. Businesses must also obtain the required authorizations and licenses from the state before shipping their goods. Obtaining a legitimate export license and registering with the Ministry of Commerce and Industry are two examples of this.

Firms must also make sure that they adhere to all applicable customs laws and procedures. This involves supplying the required shipping papers and paying the requisite taxes and tariffs. 

Choosing a market in Panama

The attractive financial environment in the nation is one of the main advantages of expanding there. Many tax benefits make Panama an appealing location for businesses. This includes several economic advantages, such as a low corporation tax rate and significant tax exemptions for international investors. Additionally, several free trade agreements that Panama has with other nations make it simpler for businesses to reach international markets.

The abundance of investment options is another advantage of expanding to Panama. There are several industries in the nation with enormous commercial potential and a booming economy. It is the perfect location for businesses wishing to expand because it also offers a well-developed infrastructure and a highly trained workforce.