Learn about the opportunities for e-commerce in Panama to understand options available to your when expanding your business abroad. Panama is a top contender for new business, as it is one of the most stable economies in Central America.
The increase of mobile and technological devices has contributed significantly to the development of e-commerce in Panama. Online services and products that are offered through online platforms provide new opportunities for investors that are looking to expand their business.
Furthermore, Panama’s geographic strategic location not only benefits the development of e-commerce in the country but also helps companies to conduct international business. In particular, those who distribute their products across many countries through an import and re-export process and take advantage of e-commerce in Panama.
We outline the opportunities for e-commerce in Panama and how these can help you to incorporate or expand your business in the country.
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Panamanian e-commerce consumer profile and online shopping preferences
Understanding the preferences and needs of online consumers is essential to get a clear overview of e-commerce in Panama. Likewise, it helps companies to build an effective strategy to boost online sales.
The following figures provide an overview of the average consumer profile:
- 69% of Panama’s population has access to the internet
- 95% of internet users do online shopping (approximately 2.9 million people)
- E-commerce platforms in Panama are commonly used for buying technology, fashion, beauty and home products, or travelling tickets
- 80% of online buyers use a mobile device to execute a purchase.
As in other countries of Latin America, online shopping is a trend that is evolving rapidly. However, the e-commerce sector faces some challenges that businesses entering the market need to consider, such as:
- Security in data management
- Developing a comfortable or ‘user-friendly’ online platform for consumers
- Using Search Engine Optimization (SEO) methods to promote services and products
- Adapting the current business model to the digital market.
Additionally, companies wishing to enter the market and establish an e-commerce business must still go through formal company formation procedures in Panama. For this, it’s important to engage a trusted and experienced legal professional to carry out this process effectively, and communicate as needed with Panamanian authorities.
Advantages of e-commerce in Panama
Despite its size, Panama is considered an e-commerce hub of Latin America, thanks to the multiple advantages offered to foreign business owners that decide to incorporate their company in Panama.
The key advantages of e-commerce in Panama are:
- Internationally recognized brands have a presence in the country
- Sufficient volume of products to meet the demand of neighbouring countries
- Use of the dollar as the official currency
- The country offers a convenient way to store and distribute your products by taking advantage of the free trade zones and the Panama Canal
- Tax benefits to companies operating within Panama’s free trade zones
- Companies that develop their commercial activities outside of Panama will be exempt from taxes, therefore you can incorporate your company in Panama and lead to foreign commercial activities.
Requirements to register a company in the Direction of General Electronic commerce
E-commerce in Panama is regulated by the Direction of General Electronic Commerce (Dirección General de Comercio Electrónico). However, all companies looking to develop e-commerce operations in Panama must be registered at the Ministry of Commerce and Industry. The required information and documents to complete the registration are:
- Commercial license
- Certificate of good standing issued by the Public Registry (Registro Público de Panamá)
- Name of the legal representative
- Commercial name of the company
- Address of the company
- URL of the company’s website
- Email address and phone number as contact information for clients and consumers.
Furthermore, the website of the company should include the following information:
- Name of the legal representative
- Commercial name of the company
- Address of the company
- Email address and phone number as contact information for clients and consumers
- Website’s terms and conditions
- Website’s privacy policy
- Must have an appropriate security system for the protection of personal and sensitive data
- Implement a mechanism through which you can obtain acceptance of the ‘Terms and Conditions of Use’ and privacy policies, before every payment.
Take advantage of e-commerce benefits in Panama with Biz Latin Hub’s support
The e-commerce sector in Panama has been in development for several years, leading to new business opportunities.
Before entering the e-commerce market in Panama, you should be aware of the country’s regulations regarding company incorporation and corporate compliance. Therefore, it is strongly recommended to seek advice from experienced legal and accounting specialists in Panama to assure a smooth market entry.
At Biz Latin Hub, we are a market leader for supporting businesses from all over the world entering Latin American markets. Get personalized and tailor-made assistance from us when starting your e-commerce in Panama. Besides market entry support, our team offers you a wide range of back-office services, such as legal, taxation and accounting services, due diligence, visa procedures and more.
Contact us now for more information and become part of the e-commerce scene in Panama.
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