How to Create a Business and Sell Retail in Panama If You Are a Foreigner

Retail trade in Panama has historically been protected for Panamanian citizens. According to Article 293 of the Constitution of Panama, this activity is reserved for Panamanians by birth, naturalized with more than 10 years of residence or citizens of countries with current reciprocity agreements. This means that, as a general rule, a foreigner cannot open a physical store or engage directly in retail trade in Panama.

However, there is a notable exception: foreigners can participate in the sale of products that they manufacture themselves. This point opens up an important opportunity for international entrepreneurs with specific skills in the production of goods.

In addition, foreigners can register companies in less regulated sectors, such as digital sales (e-commerce), wholesale activities or providing services.

If physical retail trade is limited, the e-commerce offers an excellent alternative for foreigners. With the rise of digital commerce and the growing adoption of technological platforms, selling online can be a viable and legal option. When operating an e-commerce business from Panama, foreigners have the possibility to:

• Sell your own manufactured products to local and international consumers.
• Offer services or consulting through digital platforms.
• Resell assets with Panamanian partners (where the business is structured to comply with local legislation).

To attract the attention of Panamanian consumers, it is recommended to comply with tax regulations, such as registration with the Directorate General of Revenue (DGI) and the issuance of tax invoices. In this way, in addition to avoiding sanctions, you will demonstrate professionalism and trust.

The process of registering a company in Panama as a foreigner is simple if the right steps are followed. Here's a basic guide:

1. Select a company type: The most common companies are Public Limited Companies (S.A.) or Limited Liability Companies (S.R.L.).
2. Designate directors and shareholders: A key advantage in Panama is that foreigners can be directors and shareholders of a company. It's important to make sure you meet any additional requirements depending on the industry.
3. Get an Operation Notice: This permission is essential to legalize your economic activity in the country.
4. Register with the DGI: This ensures that your company complies with tax regulations.
5. Open a business bank account: Although some banks impose restrictions, there are options for foreigners to submit adequate documentation.

Panama is one of the Latin American countries with the greatest facilities for doing business, thanks to the following advantages:

• Tax Incentives: Sectors such as manufacturing, technology and export offer significant tax breaks.
• Strategic location: Panama connects the Americas and has access to global markets through the Panama Canal.
• Economic Stability: Panama uses the U.S. dollar as its official currency, which guarantees exchange rate stability.
• Special economic zones: Areas such as the Colon Free Zone offer unique advantages to foreign investors.

Navigating Panamanian legislation can be complicated without local experience. Having expert advice will allow you to:

• Better understand the legal restrictions and options available.
• Legally structure your business to comply with Panamanian regulations.
• Optimize processes such as opening bank accounts and permissions.

In Limitless Legal, we offer customized solutions for foreign entrepreneurs who wish to carry out their projects in Panama. From setting up companies to advising on e-commerce and tax compliance, our team will accompany you every step of the way.