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  • 1. Panama/Panamá* INTRODUCTIONGeneral Capital/Other major cities: Panama City/David, Colón Area: 78,200 km2 Population: 3.24m Languages: Spanish (official), English Currency: Balboa (PAB); US dollar (USD) Country telephone code: 507 National holidays (excl. weekends)**: 2nd half 2007 — Aug 15, Nov 5, 28, Dec 25 2008 — �an 1, 7, �e�� 4, 5, �, �ar 20, 21, �ay 1, Aug 15, Nov 2008 — �an 1, 7, �e�� 4, 5, �, �ar 20, 21, �ay 1, Aug 15, Nov 3, 4, 5, 10, 28, Dec 8, 25 Business hours: 08:00–17:00 (Mon–Fri) Banking hours: 08:00–15:00 (Mon–Fri); 09:00–12:00 (Sat) Note: some branches operate Sat until 15:00 and Sun 14:00–18:00 PANAMA Stock exchange: Bolsa de Valores de Panamá (BVP) Leading share index: BVPSI ** Source: www.goodbusinessday.com.Government Legislature ♦ Presidential repu��lic with a unicameral Legislative Assem��ly (Asam��lea Legislativa). ♦ National Assembly – 78 members directly elected for five-year terms. In 2009, the num��er of seats will ��e reduced to 71. ♦ The president is directly elected every five years. Head of state and political leader ♦ Martin Torrijos, president (head of state and government) since September 1, 2004.Economy 2001 2002 2003 2004 2005 2006 2007 Q2 Q3 Q4 YEAR Q1 Exchange rate* (PAB per USD)** 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Interest rate (lending rate)** % 10.97 10.58 9.93 8.82 8.67 8.43 8.36 8.39 8.39 NA Unemployment % 14.7 14.1 13.6 12.3 NA NA NA NA NA NA Consumer inflation*** % + 0.3 + 1.0 + 0.1 + 0.4 + 3.3 + 3.1 NA NA NA NA GDP volume growth*** % + 0.6 + 2.2 + 4.2 + 7.6 + 6.4 NA NA NA NA NA GDP PAB m 11,808 12,272 12,933 14,204 NA – – – NA – GDP USD m 11,808 12,272 12,933 14,204 NA – – – NA – GDP per capita USD 3,923 4,011 4,123 4,467 NA – – – NA – BoP (goods, services & income) as % GDP – 3.4 – 2.8 – 6.4 – 9.0 NA – – – NA –* Official rate. ** Period average. *** Year on year. Source: International Financial Statistics, IMF, June 2007.* Please note that rules, regulations and market practice are evolving. As a result, they may diverge from the formal regulatory framework described inthis country profile and their interpretation may differ accordingly. If you are planning any business activity in the country, we would recommend thatyou seek independent advice on the latest market and regulatory developments as well as legal and tax advice. 
  • 2. CASH, TRADE & TREASURY CENTRAL AMERICASectoral distribution of GDP (% of GDP) ♦ Agriculture 7.2% ♦ Industry 1�.4% ♦ Services 76.4% (2006) COUNTRy CReDIT RATINg �itch Ratings rates Panama for issuer default as: Term Local currency rating Foreign currency rating Short – B Long BB + BB + Long-term rating alert Outlook Stable Source: www.fitchratings.com, July 2007. LegAL AND RegULATORyCentral bank ♦ Panama has no central ��ank. However, the National Bank of Panama (Banco Nacional de Panamá) acts as the leading banking authority in Panama, taking on many of the roles typical of a central ��ank and operating as an autonomous entity PANAMA of the State.Bank supervision ♦ The Banking Superintendency (Superintendencia de Bancos) is an autonomous entity, which acts as the supervisory and regulatory authority for the ��anking sector in Panama.Resident/Non-resident ♦ A company is deemed resident if its principal ��usiness is in Panama.Bank accounts ♦ Foreign exchange accounts and domestic currency (PAB) accounts can be held by residents ��oth domestically and a��road, and resident accounts in domestic currency are converti��le into foreign currency. ♦ Non-resident bank accounts are permitted in Panama, denominated in either domestic (PAB) or foreign currency. Non-resident accounts in domestic currency are also converti��le into foreign currency.Reporting ♦ Certain information is sent to the General Controller (Contralor General) for balance of payments purposes. However, detailed statistical information on transactions is not required. ♦ Income and expenditure on a client’s account is used ��y the General Controller to ascertain the capital of and payments to/from the current account, while the client’s structure of patrimonial participation is used to determine the levels of direct foreign investment. ♦ Deposits exceeding USD 10,000 on residents’ accounts held abroad must be accompanied ��y information detailing the party effecting the transaction and the source of the funds.Exchange controls ♦ The Panamanian balboa (PAB) is Panama’s official currency. The US dollar (USD) is also legal tender in Panama and has been since 1904. ♦ The PAB is pegged to the USD at a rate of PAB 1 per USD 1. 2
  • 3. CASH, TRADE & TREASURY CENTRAL AMERICA ♦ There are no exchange controls in Panama. ♦ Those importing or exporting in excess of the equivalent of USD 10,000 in cash are required to file a report with the Ministry of Economy and Finance’s customs offices.Anti-money laundering/counter-terrorist financing* ♦ Panama has implemented anti-money laundering legislation (the Law No. 41 of 2000, the Law No. 42 of 2000, Agreement No. 9 of 2000, the Law No. 6 of 2002 (Financial Crimes), the Law No. 45 2003 and the Law No. 50 2003). ♦ Panama is a member of the Caribbean Financial Action Task Force (CFATF) and has an action plan for implementing FATF-49 recommendations. Panama is also a member of the Offshore Group of Banking Supervisors (OGBS) and the Organization of American States/Inter-American Drug Abuse Control Commission (OAS/CICAD). ♦ Panama has established a financial intelligence unit (FIU), the Unidad de Analisis Financiero (UAF), which is a member of the Egmont Group. ♦ Account opening procedures require formal identification of the customer. ♦ Banks must keep a record of customers who regularly conduct transactions exceeding PAB 10,000. The record should include the type, num��er, volume and frequency of the banking operations, products or services that will later be reflected in the client’s account. If within a week successive deposits or withdrawals have exceeded PAB 10,000, these must also ��e reported. PANAMA ♦ Trust companies must identify clients and beneficial owners. For trusts, judicial persons and corporations, the certificates of incorporation must be shown. Directors, officers, attorneys and legal representatives must also be identified to establish and identify the beneficial owners of the account. ♦ Insurance companies, reinsurance companies and casinos are exempt from the due diligence duties faced by other financial institutions. ♦ Financial institutions in the broadest sense are required to report to the UAF suspicious transactions and also currency transactions above USD 10,000. ♦ All records and documents must be kept for at least five years. * Supplied by BCL Burton Copeland (see www.burtoncopeland.co.uk for background explanatory article). Data as at May 2007. TAXATION†Resident/Non-resident ♦ As a general rule, Panama only taxes income sourced in Panama. As a consequence, no formal definition is given to this term in Panama’s tax legislation. ♦ However, case law has defined a non-resident as either someone who is not registered as a foreign ��ranch or su��sidiary or someone that is not incorporated in Panama.Tax year ♦ The tax year corresponds to the calendar year. However, exceptions to this rule may ��e approved ��y the tax authorities. ♦ Corporate income tax returns for the prior year must be filed within three months of the end of the tax year, along with an estimate of the current year’s tax lia��ility. ♦ Tax must be paid in advance during the year (in June, September and December) ��ased on the tax lia��ility of the previous tax year.Corporate taxation ♦ All companies are su��ject to taxation on their income in Panama, including export income, but not on non-Panamanian sourced income. ♦ The corporate income tax rate is 30% of net income and 1.4% of gross income. This 3
  • 4. CASH, TRADE & TREASURY CENTRAL AMERICA applies to all companies doing ��usiness in Panama. It also applies to net income from sales made ��y �ree Zone companies within Panama. ♦ Local companies pay 4% complementary tax if no dividends are paid on their retained earnings for the period. It is credited against dividend tax (see Withholding Tax) if and when dividends are paid. ♦ Branches of foreign companies pay the same taxes as Panamanian companies, ��ut these companies should pay dividend tax in advance. This tax is ��ased on the deemed dividend equivalent amount. ♦ Up to 20% of losses each year can be carried forward for five years, subject to the carried forward loss not reducing taxa��le income ��y more than 50% when relieved. ♦ �or qualifying manufacturing companies, losses may ��e relieved so as to fully mitigate profits over three years.Annual corporate tax ♦ All companies registered in the Public Registry pay an annual tax of USD 250 in the first year of incorporation and USD 300 on subsequent years.Advance tax ruling availability ♦ Advance pricing agreements are not issued by Panama’s tax authorities. Non-binding (for both the tax-payer and the tax administration) opinions can be obtained from the tax administrations.Annual license tax PANAMA ♦ All ��usinesses operating in Panama pay an annual license fee of 2% of their net worth. The maximum charge is USD 40,000.Property tax ♦ There is a progressive property tax ��ased on the assessed value, with no tax paya��le on the first USD 30,000 and rates of 1.75% to 2.1% thereafter. ♦ A reduced rate might ��e availa��le for certain properties that have ��een voluntarily re-assessed between February 2005 and February 2006. These rates are reduced to rates ranging from 0.7% to 1%.Capital gains tax ♦ Capital gains are considered part of income and therefore taxa��le at 30% of net income and 1.4% of gross income for companies. ♦ Capital gains from the sale of real estate are taxa��le income. ♦ Upon sale, the seller makes an advance payment at the date of sale of 2% on the higher of cost or sale price. �or calculation purposes, cost must ��e increased ��y 5% per annum from acquisition. If a capital gain is realized, it will ��e taxed at the corporate income tax rate of 30%, with relief for the tax paid in advance. ♦ Losses on the sale of real estate can only ��e offset against real estate gains. ♦ An alternative regime is availa��le for any capital gains (including real property gains) where this rate is reduced to 10%, provided the property has been held for at least 24 months and the taxpayer does not dispose of this kind of property on a regular ��asis.Withholding tax (not subject to/ reduced by tax treaties) Payments to: Interest Dividends Royalties/Fees Resident companies 5%* Nil / 10% / 20% Nil Non-resident companies in Nil / 15%*** Nil / 10% / 20% 15%*** non-tax-treaty country** * If not an “authorized financial institution”. ** Panama does not have any tax treaties. *** Being 30% corporate tax rate on 50% of the remittance. 4
  • 5. CASH, TRADE & TREASURY CENTRAL AMERICA ♦ Profit distributions made by resident entities are subject to a 10% withholding tax on the amount of the distri��ution other than that which consists of dividends received. If the dividend distributed is less than 40% of post-tax profits, the amount on which the tax is based is the difference between the dividend and 40% of post-tax profits. This does not apply to companies in the �ree Zones. The 20% rate applies to distri��utions made to holders of shares issued to the ��earer. ♦ Panama does not have any dou��le tax treaties with any country.Tax treaties ♦ Panama has no tax treaties with any country. Thin capitalization ♦ There are no formal thin capitalization rules in Panama.Transfer pricing ♦ Panama does not have any comprehensive transfer pricing legislation. ♦ The tax deducti��ility of certain expenses incurred ��etween related parties is restricted if they do not use the same ��asis of accounting. ♦ As a general tax rule, amounts charged for the performance of services have to correspond to the benefit received from the service.Stamp taxes ♦ Contracts documenting transactions not covered ��y VAT incur stamp duty at various PANAMA rates depending on the type and value of the transaction, most commonly at USD 0.1 for each USD 100 (or less). Bank checks incur stamp duty at USD 0.1 per check, which is charged to the client.Sales taxes/VAT/selective consumer tax ♦ VAT (locally known as ITBMS) is levied on the sale of goods and provision of services. ♦ The general VAT rate is 5%. However, certain products (e.g. ��asic foods, pharmaceuticals and books) and services (healthcare, transport and education) are exempt. ♦ Alcohol and to��acco are taxed at 10% and 15% respectively. ♦ There are excise taxes ranging from 5% to 10% on various goods and services (this includes television and mobile telephones).Payroll and social security taxes ♦ Companies have to pay all workers a 13th month’s salary as a ��onus, which is taxa��le in the hands of the employees. It is distri��uted over the year in three equal instalments. ♦ The following contri��utions are required: Contributions to: Employer (%) Employee (%) Social Security Institute 11.0 7.25 Education tax 1.50 1.25 ♦ The Social Security Institute provides health, maternity, disa��ility, pensions and occupational accident cover. ♦ Companies pay 0.042–7% of the total payroll to cover workers’ insurance. The rate paid depends on the degree of risk. ♦ �or 200�, the employer’s Social Security contri��ution is 11.00% and the employee’s is 7.25%. The following contri��ution rates according to the recently passed Social Security Law (Law 51) will be applicable over the next six years: 5
  • 6. CASH, TRADE & TREASURY CENTRAL AMERICA Financial Year Employer (%) Employee (%) 2007 11.25 7.25 2008 12.25 8 2009 12 8 2010–2012 12 9 2013 12.25 9.75 ♦ The dismissal trust fund is funded with 2.25% of the average quarterly salary of the employer and is supposed to cover the dismissal payments due when the employer lays off an employee. † All tax information supplied by Deloitte & Touche (www.deloitte.com). Data as at February 1, 2006. BANKINgMajor banks Bank Total assets (USD millions)* March 31, 2007 Primer Banco del Istmo, S.A . 4,887 Banco Latinoamericano de Exportaciones 4,185 Banco Nacional de Panamá (state-owned) 4,061 PANAMA Banco General S.A. 3,610 Banco Continental de Panamá 3,185 HSBC (Panama) 2,308 BNP Paribas Sucursal (Panamá), S.A. 2,003 Bancolombia (Panama) SA 1,449 Banco Bilbao Vizcaya Argentaria Panamá (BBVA 1,164 Group) BAC International Bank 1,143 Caja de Ahorros (state-owned) 1,121 * PAB 1 per USD 1. Sources: Superintendencia de Bancos de la República de Panamá and www.bankersalmanac.com.Overview ♦ Banking and financial sector reforms undertaken in recent years (including stricter minimum capital requirements and increased supervision through the creation in 1998 of a Banking Superintendency) have increased the stability of Panama’s ��anking sector. ♦ The Banking Superintendency grants three types of licenses to ��anks in Panama: a general license, which permits ��anks to operate in ��oth domestic and international operations; an international license, which permits banks to operate only in international operations but permits operations in the national interbank market; and a representation license granted to representative offices of foreign banks, which permits these ��anks to carry out promotions of their services. ♦ The gradual increase of the minimum capital requirements (from USD 1 million to USD 10 million for those with a general license and from USD 250,000 to USD 3 million for those with an international license) has created some consolidation in the market. ♦ Panama has esta��lished itself as a major offshore ��anking center. The International Banking Center (Centro Bancario Internacional – CBI) is home to 79 banks with total assets of approximately USD 44.8 billion as of February 2007. ♦ Of the 79 banks operating in Panama, two are state-owned banks (Banco Nacional de 6
  • 7. CASH, TRADE & TREASURY CENTRAL AMERICA Panamá (BNP) and Caja de Ahorros), 40 banks have general licenses, 37 banks have international licenses and there are eight representative offices of foreign banks. ♦ The most prominent privately owned domestic ��anks in Panama are Primer Banco del Istmo (Banistmo), which is the country’s largest bank in terms of assets, Banco General, and Banco Continental de Panamá. ♦ Banco General (part of Empresa General de Inversiones) became Panama’s second largest privately owned ��ank in 2000 when it acquired Banco Comercial de Panamá. In 2005, Bank of America sold its BankBoston Panama operations to Banco General. Banco Continental (part of Grupo Financiero Continental) merged Banco Continental (part of Grupo Financiero Continental) merged with Banco Internacional de Panama (BIPAN) at the end of 2001 and acquired the Swiss-owned Banco Alemán Platina in March 2002. In September 2006, Panama’s Banking Superintendency authorised Spain’s Banco Sa��adell to sell its local unit, Banco Atlantico, to Grupo �inanciero Continental. ♦ The country’s second largest bank, Banco Latinoamericano de Exportaciones (BLADEX), is a Latin American regional supranational bank based in Panama. Around 23 central ��anks and 147 commercial ��anks are among its shareholders. ♦ Numerous foreign ��anks have a presence in Panama, with BNP Pari��as, HSBC and BBVA (Banco Bilbao Vizcaya Argentaria) being among the largest in terms of assets. ♦ In �uly 200�, HSBC reached an agreement to acquire Grupo Banistmo for approximately USD 1.77 billion. Grupo Banistmo owns 99.39% of Panama’s largest PANAMA ��ank, Primer Banco del Istmo. The acquisition was completed in Novem��er 200�. ♦ In Decem��er 200�, Bancolom��ia Panamá, the Panamanian su��sidiary of Colom��ia’s largest bank Bancolombia, reached an agreement to acquire Panama-based financial holding company Banagrícola, for about USD 900 million. Banagrícola owns El Salvador’s largest ��ank Banco Agrícola and offshore ��ank Banco Agrícola Panamá, among other interests. The deal closed in �ay 2007. ♦ In �anuary 2007, Banco General and Banco Continental announced plans to merge their financial operations. The Banking Superintendency approved the merger in Banking Superintendency approved the merger in �arch 2007 and the operation is expected to ��e completed ��y mid 2008. The new expected to ��e completed ��y mid 2008. The new ��anking institution will ��e called Banco General. PAyMeNT INSTRUMeNTSPayment statistics Number of Traffic transactions % change (USD millions) % change 2004 2005 2005/2004 2004 2005 2005/2004Checks NA NA NA NA NA NADebit card payments NA NA NA NA NA NACredit card payments NA NA NA NA NA NAACH credit transfers 930,611* 1,304,159 NA 1,521.5* 2,274.8 NAACH direct debits 285,887* 393,322 NA 198.8* 288.0 NA* Represents 11 months’ statistics (February–December 2004).Cash ♦ Cash is widely used, particularly for low-value consumer transactions.Credit transfers ♦ Credit transfers are ��atched and processed through ACH Directo. Transactions include payroll, pension and supplier payments. Funds are available to the beneficiary on T+1. ♦ Prior to the establishment of ACH Directo in August 1998, banks were only able to 7
  • 8. CASH, TRADE & TREASURY CENTRAL AMERICA offer electronic credit transfers when the originator and receiver had an account in the same ��ank. ♦ There is currently no domestic, same-day electronic interbank funds transfer system in Panama. International transfers can ��e sent via SWI�T.Direct debits ♦ Direct de��its are ��atched and processed through ACH Directo. Direct de��its require that a signed authorization ��e in place. �unds from direct de��its are availa��le to the beneficiary (originator) on T+1. They are used mainly for utility payments and other types of consumer ��ill collections. ♦ Before the introduction of the ACH de��it transaction, ��anks were only a��le to offer a direct de��it service if the originator and receiver had an account in the same ��ank.Checks ♦ Checks are widely used in Panama ��y ��oth ��usinesses and individuals. ♦ Checks drawn on a ��ank and deposited ��y 15:00 at the same ��ank in the same city or a different city are availa��le on T+1. Checks drawn on a ��ank and deposited ��y 15:00 at a different ��ank in the same city or a different city are generally availa��le to the beneficiary on T+1 or T+2. ♦ A stamp duty is levied on checks (see Taxation).Card payments De��it cards are used for consumer purchases. Sistema Clave, operated ��y Telered PANAMA ♦ S.A., is a shared AT� network with 2� ��ank participants and over �35 AT�s around the country. Sistema Clave cardholders can also make de��it card purchases at more than �,000 POS terminals at 2,000 stores across Panama. ♦ Credit cards are gaining acceptance in Panama in part due to purchases that are taking place using the Internet. Credit cards are issued under the �asterCard, Visa, American Express and Diners Club brands. ♦ There are approximately �00,000 credit cards in circulation in Panama. Visa remains the leader with more than 90% of the credit card market. Other payments ♦ �unds transfers within Panama can also ��e made via a cashier’s check where a client goes to a bank branch and requests that funds be transferred to a beneficiary at another branch of the same bank. The beneficiary goes to the designated receiving branch location to receive the funds via check or cash. The beneficiary may or may not have an account at the receiving ��ank. ♦ Remittances from Panamanians residing in the US are often sent from the US to Panama through services such as Money Gram and Western Union. PAyMeNT SySTeMSType ♦ ACH Directo was created in 1998 by 15 banks. The Center for Automated Interchange (Centro de Intercambio Automatizado S.A. – CIASA) is the privately owned operator responsi��le for the processing and settlement of ACH de��its and credits among the ��anks participating in ACH Directo. Net settlements take place each day in participants’ accounts at the Banco Nacional de Panamá, which serves as the national clearing and settlement agent in Panama (Cámara de Compensación de Panamá). The file structures and messages used by ACH Directo were developed in accordance with the operating rules and regulations of NACHA (National Automated Clearing House Association in the United States). ♦ Panama has one check clearing session per day, which is held in Panama City. Checks received at the ��ranches of ��anks located outside of Panama City are delivered to 8
  • 9. CASH, TRADE & TREASURY CENTRAL AMERICA each ��ank’s respective main ��ranch in Panama City, where the checks are processed and sorted into cash letters. Around 0�:00 each ��usiness day, all of Panama’s ��anks exchange physical checks (and return items) in Panama City. Net settlement takes place in participants’ accounts at the Banco Nacional de Panamá.Participants ♦ All deposit taking financial institutions participate in the national check clearinghouse. ♦ ACH Directo has 22 ��ank participants.Transaction types processed ♦ The national clearinghouse (Cámara de Compensación de Panamá) does the clearing and settlement for checks. ♦ ACH Directo processes credit transfers such as payroll and vendor payments, as well as direct de��it transactions for utility and other recurring consumer ��ill collections.Operating hours ♦ The check clearinghouse operates from 15:00 to 03:00 to receive check presentment information. The physical exchange of checks and net settlement takes place daily at 0�:00. ♦ ACH Directo operates throughout the day. Participating ��anks must o��serve the specific input and processing deadlines established by ACH Directo. PANAMAClearing cycle details ♦ Checks drawn on ��anks in Panama clear in one to three ��usiness days. Net settlement in participants’ accounts takes place at 0�:00. ♦ ACH credits and de��its su��mitted ��y participating ��anks to ACH Directo ��y 12:00 are available to the beneficiary on T+1. Net settlement in participant’s accounts takes place at 0�:00 on T+1. CASH MANAgeMeNTDomestic Pooling ♦ Pooling of cash (USD) may be done by holding companies and offshore finance companies. The latter often operate on a regional basis and serve as in-house banks, providing working capital financing to their subsidiaries. ♦ No specific legislation permitting notional pooling was identified. Cash concentration ♦ Zero ��alance accounts are permitted in Panama. Collections ♦ Because the mail system in Panama is not used for sending payments, many customers make their payments directly at a ��ank ��ranch. The use of special deposit tickets or customer codes allows the ��ank to capture remittance information a��out the payment at the time it is made. Remittance information is provided to the collecting company via electronic banking, file transfer or report. Some banks provide online payment and remittance information. ♦ Cobradores (private couriers or collection services) and/or sales persons are often used ��y companies to facilitate collections ��y delivering invoices and picking up payments from their customers. Short-term investments ♦ Companies use a variety of instruments for short-term investments, including: ♦ time deposits (depósitos a plazo fijo) ♦ mutual funds (fondos mutuos). 9
  • 10. CASH, TRADE & TREASURY CENTRAL AMERICACross-border ♦ Cross-border payments are routed through SWIFT and settled through accounts held with correspondent ��anks a��road. eLeCTRONIC BANKINg ♦ Electronic banking is used by companies in Panama. ♦ Major banks in Panama offer Internet-based electronic banking systems with comprehensive account information and ACH transfer capa��ilities. ♦ During the past few years, Panama’s ��anks have invested heavily in electronic ��anking and online services and offer an array of services via their financial portals. ♦ Use of these services has lagged somewhat among individuals owing to the relatively low Internet penetration in Panama (estimated to be at around 9.5% of the county’s population in January 2007). However, consumers with Internet access are using financial portals for account inquiries and to review and pay their utility and other consumer ��ills. ♦ Law 43, which regulates (the exchange of) electronic documents and electronic signatures, was enacted in August 2001. It assigns the same validity to electronic documents as to documents printed in hard copy, in a court of law, and grants the same value to electronic signatures as to written ones, when signatures are required under legislation. PANAMA TRADeTrading partners Import ♦ US 27.5%, Netherlands Antilles 11.4%, Costa Rica 4.7%, Japan 4.5%. Export ♦ US 44.9%, Spain 8.9%, Sweden 5.6%, Netherlands 4.9%, Costa Rica 4%.Imports Documents ♦ In order to import goods into Panama, an import declaration is required. A commercial invoice (four copies in English or Spanish) must include a full description of the imported goods. A bill of lading and, in certain cases, a certificate of origin is also mandatory. Licenses ♦ Companies engaging in commercial or industrial activities require commercial or industrial licenses and tax clearance certificates. ♦ Import permits for agricultural goods are issued ��y the �inistry of Agriculture. Taxes/Tariffs and other fees ♦ Tariffs are levied on imports ad valorem at zero, 3%, 5%, 10% and 15%. ♦ Import tariffs applied exceed 15% in the case of automobiles (17%), sugar (50%) and numerous other food products (ranging from 20% to 300% for some poultry). ♦ Imports into the Colón Free Zone (CFZ) and into Panama’s export-processing zones are exempt from duties. Prohibited imports ♦ A negative list (list of products that may not be imported) is in operation. It is prohi��ited to import certain commodities into Panama in order to protect pu��lic health and national security, and for hygienic and moral reasons. 10
  • 11. CASH, TRADE & TREASURY CENTRAL AMERICAExports Documents ♦ In order to export goods from Panama, an export declaration, commercial invoice, bill of lading and, in certain cases, a certificate of origin, are required. Licenses ♦ Licenses are not required for the majority of exports. Taxes/Tariffs and other fees ♦ Export tariffs are applied to gold, silver, platinum, manganese, other minerals, scrap metal, pearls, rubber, unrefined sugar, coconuts, animal wax, nispero gum and ipecac root. ♦ Exports of products imported into the CFZ are exempt from customs procedures. ♦ Products exported from export-processing zones are also exempt from tax. ♦ Exports subject to taxes require an export authorization from the Ministry of �inance. Prohibited exports ♦ As with imports, there is a negative list of products that cannot ��e exported. ♦ Exporting certain, drugs, armaments and ammunition is forbidden or at least restricted.Financing imports and exports Imports ♦ There are no financing requirements for imports. PANAMA Exports ♦ There are no financing requirements for exports. gLOSSARyACH Directo – Established by 15 banks in August 1998, ACH Directo is a low-value electronic funds transfer system used in Panama to process and settle ACH de��its and credits among its participant ��anks.Banco Nacional de Panamá (National Bank of Panama) – One of two state-owned banks in Panama, the Banco Nacional de Panama takes on many of the roles typical of a central ��ank and operates as an autonomous entity of the State. Panama has no official central bank.Cámara de Compensación de Panamá – Panama’s national clearing house, operated ��y the Banco Nacional de Panamá, which is used to clear and settle check transactions.Center for Automated Interchange (Centro de Intercambio Automatizado S.A. – CIASA) – The privately owned operator of ACH Directo in Panama.PAB (Panamanian balboa) – Panama’s official currency. USeFUL CONTACTS Banco Nacional de Panamá www.��anconal.com.pa Banking Superintendency www.super��ancos.go��.pa Leading ��anks: Primer Banco del Istmo SA www.��anistmo.com Banco Continental S.A. www.��continental.com Banco General SA www.banco-general.com Banking Association of Panama www.asociacion��ancaria.com Ministry of Economy and Finance www.mef.go��.pa/inicio/default.asp �inistry of Commerce and Industry www.mici.go��.pa Vice Ministry of External Commerce www.vicomex.go��.pa Panama Cham��er of Commerce, Industry and Agriculture www.panacamara.com Business Panama Group www.��usinesspanama.com Bolsa de Valores de Panamá www.pana��olsa.com 
  • 12. CASH, TRADE & TREASURY CENTRAL AMERICA HSBC CONTACT DeTAILS �s. �aritza Chong Senior Vice-president, CIB/CMB Manager HSBC Bank (Panama) S.A. Plaza HSBC, Calle Aquilino De La Guardia y Calle 47 Este Urbanización Marbella Panama Repu��lic of Panama Tel: +507 210 7�33 E-mail: maritza.w.chong@pa.hs��c.com PANAMA 12