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U.S. Department of State
Panama Country Commercial Guide
Office of the Coordinator for Business Affairs




                          1996
             COUNTRY COMMERCIAL GUIDE: PANAMA
                     Table of Contents


I.  EXECUTIVE SUMMARY
    - Commercial Overview
    - Business Trends and Opportunities
    - Trade and Investment Climate

II.  ECONOMICS TRENDS AND OUTLOOK
     - Major Trends and Outlook
     - Principal Growth Sectors
     - Government Role in the Economy
     - Balance of Payments Situation
     - Infrastructure Situation

III.  POLITICAL ENVIRONMENT
    - Nature of Political Environment with the United States
    - Major Political Issues Affecting Business Climate
    - Brief Synopsis of Political System, Schedule for 
      Elections, and Orientation of Major Political Parties

IV.  MARKETING U.S. PRODUCTS AND SERVICES
   - Distribution and Sales Channels
   - Use of Agents and Distributors; Finding a Partner
   - Franchising
   - Direct Marketing
   - Joint Venture/Licensing
   - Steps to Establishing an Office
   - Selling Factors/Techniques
   - Advertising and Trade Promotion
   - Pricing Product
   - Sales Service/Customer Support
   - Selling to the Government
   - Protecting Your Product from IPR Infringement
   - Need for a Local Attorney

V.  LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
   - Best Prospects for Non-Agricultural Goods and Services
   - Best Prospects for Agricultural Products
   - Significant Investment Opportunities

VI.  TRADE REGULATIONS AND STANDARDS
   - Trade Barriers, Including Tariffs, Non-Tariff Barriers
     and Import Taxes
   - Customs Valuation
   - Import Licenses
   - Export Controls
   - Import/Export Documentation
   - Temporary Entry
   - Labeling, Marking Requirements
   - Prohibited Imports
   - Standards (E.G. ISO 9000 Usage)
   - Free Trade Zones/Warehouses
   - Special Import Provisions
   - Membership in Free Trade Arrangements

VII.  Investment Climate
    - Openness to Foreign Investment
    - Conversion and Transfer Policies
    - Expropriation and Compensation
    - Dispute Settlement
    - Political Violence (As it may affect Investment)
    - Performance Requirements/Incentives
    - Right to Private Ownership and Establishment
    - Protection of Property Rights
    - Regulatory System: Laws and Procedures
    - Bilateral Investment Agreements
    - Opic and Other Investment Insurance Programs
    - Labor
    - Foreign Trade Zones/Free Ports
    - Capital Outflow Policy
    - Major Foreign Investors

VIII.  TRADE AND PROJECT FINANCING
     - Brief Description of Banking System
     - Foreign Exchange Controls Affecting Trading
     - General Financing Availability
     - How to Finance Exports/Methods of Payment
     - Types of Available Export Financing and Insurance
     - Project Financing Available, Including Lending from
       Multilateral Institutions and Types of Projects
       Supported
     - List of Banks with Correspondent U.S. Banking 
       Arrangements

IX.  BUSINESS TRAVEL
     - Business Customs
     - Travel Advisory and Visas
     - Holidays
     - Business Infrastructure

X.  APPENDICES
   - Appendix A: Country Data Population Population Growth 
     Rate (Percent) 
     Religion(s) Government System
     Language(s)
     Work Week
   - Appendix B: Domestic Economy
     GDP
     GDP Growth Rate 1996 Estimate (Percent)
     GDP Per Capita
     Government Spending as a Percent of GDP
     Inflation
     Unemployment (Percent)
     Foreign Exchange Reserves
     Average Exchange Rate for USD 1.00
     Debt Service Ratio
     U.S. Economic Military/Economic Assistance
   - Appendix C: Trade
     Total Country Exports
     Total Country Imports
     U.S. Exports
     U.S. Imports
   - Appendix D: Investments Statistics
   - Appendix E: U.S. and Country Contacts
     U.S. Embassy Trade Related Contacts
     AMCHAM and/or Bilateral Business Councils
     Country Market Research Firms
     Country Commercial Banks
   - Appendix F: Market Research
   - Appendix G: Trade Event Schedule


This Country Commercial Guide (CCG) Presents a comprehensive 
look at Panama's commercial environment through economic, 
political and market analyses.

The CCGs were established by recommendation of the Trade 
Promotion Coordinating Committee (TPCC), a multi-agency task 
force, to consolidate various reporting documents prepared 
for the U.S. business community.  Country Commercial Guides 
are prepared annually at U.S. Embassies through the combined 
efforts of several U.S. government agencies.



I.  EXECUTIVE SUMMARY


COMMERCIAL OVERVIEW

Panama has always been a country of traders.  In the 1600s, 
the Atlantic city of Portobelo was Spain's major port and a 
marketplace for gold, silver, and other goods being 
transported from the Americas.  The Transisthmian Railroad, 
built by American investors in the 1850s, established Panama 
as the principal location to transport goods between the 
Atlantic and the Pacific Oceans.  The inauguration of the 
Panama Canal in 1914 ensured Panama's position as a major 
trading nation for the twentieth century.  Since 1948, when 
the first free zone of the Americas was opened in the 
Atlantic city of Colon, Panamanian businesses have continued 
supplying larger markets north and south with just about 
everything from toys and fragrances to advanced electronics 
and major appliances.  

Given Panama's central geographic location in the Western 
Hemisphere, its government and business community actively 
promote this country's long-standing reputation as an 
international trading, banking, and services center, and as 
a site for Foreign Direct Investment (FDI).  Panamanian 
business people and officials can point to Panama's dollar-
based economy as offering low inflation and zero foreign 
exchange risk.  

Due to the evolution and composition of Panama's economy, 
the extent and nature of local competition is very limited 
in most of the non-service sectors.  Although the United 
States is Panama's most important trade partner and U.S. 
products have a high degree of acceptance in Panama, 
competition from third countries is particularly strong in 
certain sectors such as: telecommunications equipment, 
automobiles, heavy construction equipment, consumer 
electronics, computers, apparel, gifts and novelty products.

Panama's merchandise imports grew in 1994 by  10  percent 
over  1993  to a  total  of  US$ 2,404 million, up somewhat 
from the growth rate of 7.6 percent registered in 1993.  The 
value of Panama's total merchandise exports in 1994 climbed 
5 percent over 1993 to a total of US$ 533 million.  
Increased export earnings from meat, fishmeal, shrimp and 
sugar accounted for 58 percent of the increased exports.  
Banana exports fell by US$ 6.3 million (4.5 percent) to US$ 
199.5 million.  Bananas accounted for 35 percent of total 
merchandise exports.

Panama's economy is based primarily on a well-developed 
services sector that accounts for 70 percent of GDP.  
Services include the Panama Canal, offshore and domestic 
banking, the Colon Free Zone, insurance, government, and the 
transisthmian oil pipeline.  Manufacturing, mining, 
utilities, and construction together account for 19 percent 
of GDP.  Manufacturing is principally geared to production 
of items such as processed foods, clothing, chemical 
products, and construction materials for the domestic 
market.  Agriculture, forestry and fisheries make up the 
remaining 11 percent of GDP.


BUSINESS TRENDS AND OPPORTUNITIES 

Business practices and attitudes in Panama are similar to 
those in the U.S.  American television and radio programs, 
and U.S. magazines are all available and popular in Panama.  
Panamanians frequently travel to the U.S. for vacation, 
study, and business.  Their buying patterns and tastes are 
similar to ours.

U.S. products and services are well accepted and remain 
competitive in the local market.  Panama has the highest per 
capita GDP in Central America.  The majority of income is 
skewed to a relatively small, consumer goods-oriented, 
economically powerful class.  Their upper-middle and upper-
class families have high levels of disposable income.  They 
are interested in purchasing high quality, trend-setting 
goods; price is less of a factor in purchasing an item for 
this class than for the middle-to-lower income classes.

The availability of the U.S. dollar as legal currency and 
somewhat lower import duties have helped U.S. products 
remain price competitive in recent years.  Other foreign 
imports, however, are slicing a greater market share of the 
pie because of their increasingly higher quality at 
competitive prices.  Growth prospects for U.S. goods and 
services for the next three years correlate directly with 
continued growth of the Panamanian economy, which recently 
has shown signs of weakening.

The Panamanian economy has potential for substantial growth 
in the areas of: electric power generation, health care 
services, mining exploration and operations, port 
construction and operation, land development, road 
construction and rehabilitation, telecommunications and 
tourism.


TRADE AND INVESTMENT CLIMATE

Panama has no restrictions on the outflow of capital or 
outward direct investment.  The Government of Panama (GOP), 
has demonstrated its commitment to trade liberalization 
since taking office in 1994.  President Ernesto Perez 
Balladares has pressed for trade liberalization in the 
National Assembly and has advanced negotiations for Panama 
to join the General Agreement on Tariffs and Trade 
(GATT/WTO). The current government's economic reform 
program, begun by the previous administration in 1990 after 
agreement with the International Financial Institutions, has 
faced legal obstacles.  Attempts to eliminate import permits 
and reference prices were challenged in the Supreme Court.  
Efforts currently underway to reform Panama's antiquated, 
pro-union Labor Code have provoked controversy.  The Perez 
Balladares government has pressed forward with reforms but 
continues to face formidable opposition from some 
industrial, agricultural, and labor organizations.  The GOP 
has supported its GATT/WTO negotiations by submitting draft 
legislation to lower tariffs, remove non-tariff barriers to 
imports, reduce producer subsidies, prohibit anti-
competitive and monopoly practices, and strengthen 
intellectual property protection.  The passage in June, 
1995, of the "Universalization of Tax Incentive Bill" was an 
important step forward in Panama's progress towards GATT/WTO 
membership. 

Government regulation and occasional intervention in the 
Panamanian economy have tended to reduce transparency, 
hinder competition and hamper the efficient allocation of 
investment.  The government's economic liberalization 
program has been designed to reduce these distortions and 
increase competition and competitiveness, but has fallen 
short in some areas.

Modification of Panama's Labor Code, one of the most pro-
organized labor regimes in the world, is currently (as of 
July 1995) the subject of a vigorous dialogue between labor 
representatives and the Perez Balladares government , which 
is pressing for a more business-friendly labor code.  The 
combination of relatively high costs for both utilities and 
labor makes unit production costs higher than average for 
the region.  Also, investors complain of burdensome and 
excessive registration and licensing requirements, although 
the Government of Panama is trying, via the "one-stop 
shopping" concept, to make its regulations more investor-
friendly for those producing for export. 

Country Commercial Guides are available on the National 
Trade Data Bank on CD-Rom or through the Internet.  Please 
contact STAT-USA at 1-800-STAT-USA for more information.  To 
locate Country Commercial Guides via the internet, please 
use the following world wide  web address: WWW.STAT-USA.GOV.  
CCGs can also be ordered in hard copy or on diskette from 
the National Technical Information Service (NTIS) at 1-800-
553-NTIS (6847).



II.  ECONOMIC TRENDS AND OUTLOOK


MAJOR TRENDS AND OUTLOOK

The Perez Balladares government is attempting to implement 
key economic policy reforms to liberalize the trade regime, 
privatize state-owned enterprises, and foster job-creation 
through labor code reforms.  Despite this, the rate of 
economic growth is declining, due in part to hemispheric-
wide impact of the Mexican peso crisis.

During 1994, Panama's rate of growth followed a downward 
trend from the high rates of 1990-92.  The Panamanian 
Comptroller-General's office estimates Panama's 1994 Gross 
Domestic Product (GDP) grew 4.7 percent in real terms, to an 
estimated nominal level of US$ 6.96 billion.  This is down 
from growth of 5.4 percent in 1993, 8.6 percent in 1992, and 
9.6 percent in 1991 when the economy was rebounding from the 
Noriega crisis.  The construction sector (6.5 percent 
growth), the Colon Free Zone (CFZ) (10.6 percent growth), 
and financial services (6 percent growth) continued to fuel 
the economy.  In the first half of 1995, the rate of growth 
has continued decelerating, with construction starts off 
significantly and CFZ re-exports showing no growth for the 
first 4 months of the year.  Real GDP growth of 2.3 percent 
is projected for 1995 and 2.4 percent in 1996.  These growth 
rates, while substantially less than GDP growth in 1990-
1994, are in line with Panama's trend-growth rate of 2.5 to 
3.0 percent in real terms.  Panama needs a real growth rate 
of 5.0 to address the country's chronic unemployment problem 
adequately.

Private construction and capital goods spending will 
continue to be keys to growth in the near-term.  Decisive 
policy reforms to change the balance of incentives in the 
economy and lay the foundation for sustainable long term 
growth through 1996 and beyond are expected to continue to 
be the central theme of the Perez Balladares administration.  
Many of the needed reforms could take shape in the context 
of Panama's accession to the GATT/WTO, which has been the 
subject of active negotiations with the U.S. and other GATT 
members since April 1994. The Government of Panama hopes it 
will be able to become a full GATT/WTO member as early as 
the end of 1995.  One major piece of legislation designed to 
remove barriers to Panama's GATT/WTO accession, as well as 
reorder the balance of incentives in the economy was passed 
by the Legislative Assembly in June 1995.  The bill, 
awkwardly titled the "Universalization of Fiscal Incentives 
to Production," removes some of the market fixing mechanisms 
that Panama's protected, monopolistic industry used to 
exclude foreign competition.  The bill also reforms the tax 
subsidy and incentives regimes, granting any producer, 
regardless of size, the same tax breaks on imports of inputs 
and capital goods.  It creates tax breaks for investments in 
high technology fields and for investment in infrastructure 
improvements and training of the workforce.  

In addition to the GoP's need to reform its economy, two 
other huge challenges face the Perez Balladares 
administration during its five year term: utilizing 
efficiently the 70,000 acres of land and roughly 4800 
buildings which will be reverting to Panama from the U.S. 
military during the 1995-1999 period; and laying the 
groundwork to assume full control of the Panama Canal in the 
twenty-first century.


PRINCIPAL GROWTH SECTORS

Panama's economy is based primarily on a well-developed 
services sector that accounts for 70 percent of GDP.  
Services include the Panama Canal, banking, insurance, 
government, the Colon Free Zone, and the transisthmian oil 
pipeline.  Manufacturing, mining, utilities, and 
construction together account for 19.5 percent of GDP.  
Manufacturing is principally geared to production of items 
such as processed foods, clothing, chemical products, and 
construction materials for the domestic market.  
Agriculture, forestry and fisheries account for the 
remaining 10.5 percent of GDP.  Principal primary products 
include bananas, shrimp, sugar, coffee, meat, dairy 
products, tropical fruits, rice, corn, and beans.  The 
sectors of the Panamanian economy with the greatest 
potential for substantial growth are mining, tourism and 
maritime services. 

The Primary Sector  

Agriculture, livestock, forestry, fisheries and mining grew 
3.9 percent in 1994.  Agricultural production declined 1.1 
percent; value added in banana production increased 6.0 
percent.  A fall in Honduran banana production favored 
Panamanian bananas.  Despite this increase, prospects for 
growth remain bleak as import restriction enacted by the 
European Union have diminished exports to that traditional 
Panamanian market and flooded other markets with cheap 
produce.  Bananas remain Panama's primary agricultural 
product and merchandise export, accounting for 45 percent of 
agricultural value-added.  Exports of non-traditional 
products, especially melons, have increased substantially in 
percentage terms, and continue to show significant potential 
for growth.  Production is, however, on a small scale and 
suffers from lack of significant capital investment.  
Panama's mining sector has the potential for substantial 
growth, too.  Panama has large copper reserves and boasts 
two of the largest undeveloped copper deposits in the world.  
Other minerals with commercial potential are gold, silver, 
and manganese.  During 1995 an abandoned gold mine in the 
Veraguas province was returned to service using new leaching 
technology.  Mining investments in Panama are aided by a 
favorable mining law, drafted in 1988, which encourages 
participation by foreign investors.

Manufacturing and Construction

Geared largely for domestic consumption, manufacturing 
activity is concentrated in the production of food products, 
beverages, construction materials, clothing, consumer 
products, and intermediate goods.  Panama's manufacturing 
industry, which has been protected by decades of high 
tariffs and fiscal incentives, is not competitive in the 
international marketplace.  Production of food products and 
beverages accounted for 70 percent of 1994 value added in 
manufacturing.  Overall manufacturing output increased by 
4.5 percent in 1994, paced by continuing demand for 
construction materials.  Construction activity grew 6.5 
percent in 1994, down from 32 percent in 1993 and 56 percent 
growth in 1992.  The rate of growth of new construction 
permits issued in the Panama City area in the first quarter 
of 1995 was substantially down from 1994, but continues to 
show some growth.  Continuing demand for construction 
materials will stimulate manufacturing output, especially of 
cement, steel rebar, concrete block, and related products.

Banking and Finance

Panama's international banking center consists of 108 banks, 
of which 62 are general license banks, 30 are international 
license (offshore) banks, and 16 are representative offices.  
Two of the general license banks -- the National Bank of 
Panama and the National Savings Bank -- are government-
owned.  U.S. banks with a presence in Panama include 
Citibank, Chase Manhattan, and First National Bank of 
Boston.  Total banking center deposits increased by  US$ 4.8 
billion (22.4 percent) to US$ 26 billion in December 1994 
from December 1993;  external  deposits  increased by  US$ 
3.5 billion, internal deposits by US$ 1.2 billion.  Total 
assets expanded by US$ 6.7 billion (25.8 percent) to US$ 
32.8 billion; external loans increased by US$ 2.4 billion 
(24 percent) and domestic lending expanded by US$ 616 
million (10 percent).  Lending to the private sector 
increased by US$ 697 million.  The largest increases in 
private sector lending went to finance commerce (US$ 308 
million), consumer spending (US$ 108 million) and housing 
(US$ 151 million).  Total assets of Panama's offshore banks 
increased by US$ 1.57 billion (33 percent) as both deposits 
and loan portfolios increased.  In the first three months of 
1995, total assets of the banking center increased by an 
additional US$ 208 million.

Panama Canal

Panama Canal business rose in calendar year 1994 compared to 
1993.  Oceangoing transits increased 2.6 percent to 12,671 
or 34.7 vessels daily, and Panama Canal net tonnage, on 
which tolls are assessed, jumped 7.9 percent.  Toll revenue 
rose 3.1 percent to US$ 425.  During the first five months 
of 1995, oceangoing transits increased 11 percent and toll 
revenue was up by 12.1 percent relative to the same period 
of 1994, reflecting economic recovery in Japan and Europe 
and strong demand for U.S. grain in Asia.  The outlook  for 
1995 is for continued strong growth with more moderate 
growth (1-3 percent) in both tonnage and toll revenue 
projected for 1996.  Work on expanding the canal's capacity 
by widening the Gaillard cut to two lanes continues.

Oil Pipeline

Panama's transisthmian oil pipeline (PTP-Petroterminales de 
Panama, S.A.) is a joint U.S. - Panama venture.  Forty 
percent is owned by the Government of Panama while 60% is 
owned by two U.S. companies (Chicago Bridge and Northville 
Terminals).  Pipeline  revenues declined 8.7 percent in 1994 
after declining 46 percent in 1993; its contribution to real 
GDP fell to 0.7 percent in 1994 from 3.0 percent in 1990.  
Declining revenues from declining usage of the pipeline 
reflect a decrease in Alaskan oil production, an increase in 
consumption of Alaskan oil in California and some 
competition from U.S. pipelines.  The outlook for 1995 and 
beyond is for further decline as the U.S. Congress recently 
rescinded the ban on the export of Alaskan crude, allowing 
exports to Japan and the far east.  At present PTP is 
operating at only 10 percent of capacity.  PTP is devising a 
survival strategy based on diversification into other 
activities.  In June 1995, PTP signed a contract with the 
Government of Panama allowing it to expand the pipeline's 
terminal ports at Chiriqui Grande on the Caribbean and 
Puerto Armuelles on the Pacific into general cargo ports.  
PTP has had some success in obtaining spot contracts to pump 
Ecuadoran crude across the isthmus for export to the U.S. 
Gulf coast.  PTP also uses its installed generating capacity 
to sell electricity to IRHE, the Panamanian electricity 
utility.  

Colon Free Trade Zone

Established in 1948, at the Atlantic entrance to the Panama 
Canal, the Colon Free Zone (CFZ) is the largest of its kind 
in Latin America and rivals Hong Kong in overall activity.  
Laundering of cocaine profits, drug trafficking and piracy 
of intellectual property are major problems in the CFZ.  
Total imports to the CFZ reached US$ 5.0 billion in 1994, an 
increase of 11.5 percent over 1993; total  re-exports  
climbed  11.8  percent  to  US$ 5.7 billion, up from US$ 
5.11 billion in 1993.  CFZ trade continued to grow during 
the first three months of 1995, though political wrangling 
over  a tax increase brought a downturn in re-exports during 
April.  Despite this one month downturn, CFZ trade will 
likely continue to show solid growth during 1995 as it has 
already made many of the adjustments necessary to deal with 
market liberalization in Latin America.  U.S. exports to the 
Colon Free Zone totaled approximately US$ 370 million in 
1994.  CFZ data for the first four months of 1995 show 
imports of US$ 1.65 billion and re-exports of US$ 1.83 
billion, an increase of 15.9 percent over imports during the 
same period of 1994 and no increase in exports over the same 
period of 1994.  Net CFZ contributions to the Panamanian 
economy (re-exports less imports) increased to US$ 686.5 
million in 1994 from US$ 611 million in 1993 (net CFZ 
shipments reflect movements in exchange rates and 
inventories as well as market conditions).  The CFZ's 
contribution to real GDP increased to 9.2 percent in 1994 
from 8.6 percent in 1993.  It's contribution to GDP is 
expected to remain stable in 1995.

Commerce and Tourism

Commerce and tourism, which include restaurants, hotels, and 
wholesale and retail activities, grew 3.4 percent in 1994.  
Increases in personal consumption were reflected in brisk 
sales by retail businesses, which were up 5.2 percent.  
Income from tourist expenditures rose 6.8 percent to US$ 240 
million, although the number of tourists dropped slightly to 
325,000.  The tourism industry in Panama has substantial 
growth potential; however, a lack of investment in 
infrastructure and poor marketing have hampered its 
development.  In 1994, the National Assembly passed a law 
granting incentives (primarily tax exemptions and long 
leaseholds) to new investment in tourism.


GOVERNMENT ROLE IN THE ECONOMY

From 1968 until 1989, Panama was governed by a military 
regime which implemented a statist plan of economic 
development.  The government nationalized various private 
enterprises, including among others, utilities companies, 
sugar mills and cement companies.  Price controls on many 
goods existed, and are still applied to several staple 
products considered part of a basic "market basket."  The 
level of state involvement, however, was generally less 
pervasive than that in many countries that pursued a 
statist, import substitution model of economic development.  
In 1990, under the Endara government, Panama embarked on a 
policy reform program to liberalize trade and modernize 
government operations.  Political opposition from entrenched 
special interest groups, however, diluted the substance of 
reforms.  In 1992, the government re-negotiated its debt 
with the International Financial Institutions and bilateral 
creditors.  In 1994 a deal was struck to reschedule US$ 400 
million in senior bonds and floating rate notes.  

The Perez Balladares government took office in September, 
1994, with an even more ambitious program of reforms, 
including GATT/WTO accession, renegotiation of Panama's US$ 
3.5 billion foreign commercial bank debt and labor code 
reform.  The government pushed a bill through the 
Legislative Assembly in late 1994 which is the first step 
towards partial privatization of the state-owned 
telecommunications company, INTEL.  Other legislation 
partially revoked the government-owned electricity utility's 
monopoly on electricity generation for commercial resale.  
Legislation to modify the balance of incentives in the 
economy through reform of the tax code and the trade regime 
was passed in June 1995.  The government's ruling Democratic 
Revolutionary Party (PRD), true to its roots in the Torrijos 
era, however, retains a slightly statist orientation.  Add 
to that a slowing economy and it is unlikely that dramatic 
progress towards privatization of INTEL or of the state-
owned electric utility (IRHE) or water company (IDAAN) will 
occur in the next eighteen months.

The use of the U.S. dollar as Panama's currency means that 
fiscal policy is the government's principal macroeconomic 
policy instrument.  Because Panama does not issue its own 
currency, government spending and investment are strictly 
bound by tax and non-tax revenues (including Panama Canal 
receipts) and the government's ability to borrow.  The 
government's ability to use fiscal policy as a tool has been 
further constrained by declining resources.  Lending from 
the International Financial Institutions (IFIs) has been 
slow, as Panama tries to meet the loan programs' policy 
reform conditionality.

The general state budget (including various public 
enterprises) for 1995 totals US$ 4.44 billion (63.8 percent 
of projected 1995 GDP), US$ 1.86 billion of which is 
allocated to the central government, and US$ 2.57 billion to 
various decentralized agencies (i.e. the port authority, 
INTEL, IRHE, IDAAN, and the national mortgage bank).  The 
central government projects current (tax and non-tax) 
revenues of US$ 1.5 billion in 1995, up 5.9 percent from 
actual 1994 current revenues of just over US$ 1.4 billion.  
Capital revenues are projected at US$ 361.1 million for 
1995, including US$ 287.3 million in income from credit.  
Although the Government of Panama received US$ 50 million in 
bilateral credits from the Government of Japan in June 1995, 
Panama must meet conditionality to obtain disbursement of 
the remaining US$ 235 million in credits from the 
International Financial Institutions.

Given the prospect of continued decline in oil pipeline 
earnings and the U.S. military withdrawal from now until 
1999, Panama is under pressure to implement structural 
adjustment measures that will both strengthen exports of 
non-factor services based on its comparative advantage -- 
such as international transportation (ports) and related 
services (ship supplies and tourism) -- and encourage 
efficient substitution of high value-added industrial and/or 
commercial activity to replace foreign exchange earnings 
from the departing U.S. military.  The government has 
implemented such measures slowly thus far, however, and 
exports of goods and non-factor services exports are 
expected to grow less than 5 percent in 1994.


BALANCE OF PAYMENTS

Panama's goods and non-factor services export earnings have 
traditionally been among the largest in the world relative 
to GDP (35-40 percent).  This is because the country 
profited from its geographical location and dollar-based 
economy to develop a strong services sector.  Net non-factor 
services surpluses have traditionally financed large 
merchandise trade deficits.  In 1994, a net non-factor 
services surplus of about US$ 1.17 billion partially offset 
a US$ 1.67 billion merchandise trade deficit.

Services:  After the crisis years of  1988-1989, growth of 
non-factor services exports was strong.  In 1994, growth of 
non-factor services exports slowed a bit, increasing only by 
US$ 80.5 million (3.4 percent) to US$ 2.42 billion:  Canal 
toll earnings increased 3.1 percent, net Colon Free Zone 
shipments rose 10 percent; U.S. Department of Defense  (DOD) 
expenditures in Panama (for the purchases of local goods and 
services) remained unchanged at US$ 143 million; and, 
earnings from tourism grew 6.8 percent to US$ 243 million.  
By contrast, oil pipeline earnings declined 8.7 percent and 
net external interest earnings by the banking sector 
declined slightly to US$ 179.8 million.  

Merchandise:  Panama's merchandise imports grew in 1994 by 
11.3 percent over 1993 to a total of US$ 2,202 million, up 
from a yearly growth rate of 7.6 percent registered in 1993.  
The value of Panama's total merchandise exports in 1994 
climbed 4.9 percent over 1993 to a total of US$ 531.9 
million.  Increased export earnings from bananas, fishmeal, 
shrimp and sugar accounted for most of the increase.  
Bananas accounted for 38.7 percent of total merchandise 
exports.

Debt:  Panama is current on interest and principal payments 
due to the International Monetary Fund (IMF), World Bank, 
Inter-American Development Bank, and International Fund for 
Agricultural Development.  It cleared US$ 645.8 million in 
arrears with these institutions during February/March 1992.  
Panama also remains current on interest and principal 
payments to U.S. Government creditor agencies and is current 
in its obligations to its foreign bondholders, after a May 
1994 bond-swap agreement.  In May 1995, Panama announced a 
Brady-style Agreement-in-Principle to reschedule the roughly 
US$ 3.5 billion it owes to foreign commercial creditors.  
The deal is expected to close by March 1996.  Panama 
budgeted US$ 644.9 million to service internal and external 
debt in its 1994 budget.

Panama's current account has accrued small positive balances 
in each of the last three years.  In 1994, income from 
official transfers (credit from the International Financial 
Institutions and bilateral creditors) offset a deficit of 
US$ 73 million in merchandise, services and investment 
income, resulting in a net positive position of US$ 55.7 
million.


INFRASTRUCTURE SITUATION 

In comparison to many lesser developed countries, Panama has 
a quite well-developed infrastructure.  Goods and services 
are able to move with relative ease, electrical power 
generation is sufficient to meet current demand and port 
facilities, while aging and somewhat inefficient, are able 
to cope with current usage.  However, Panama is in need of 
significant public sector investment in new roads, sewer and 
water treatment systems and more education and health 
facilities.  It has been estimated that the cost of cleaning 
up the Bay of Panama alone will exceed one billion dollars.  
Presently, semi-treated sewage flows directly into the bay 
at one of its most picturesque points, damaging prospects 
for tourism development.  The basic services of Panama City 
and Colon and the country's major highways (the Pan-American 
and the Trans-Isthmian) as well as its biggest bridge 
(across the Panama Canal) were built either directly by the 
U.S. or with substantial financial assistance from it.  The 
Perez Balladares administration's emphasis on private 
development appears to be bearing some fruit in the areas of 
port construction and highway development.



III.  POLITICAL ENVIRONMENT


NATURE OF POLITICAL ENVIRONMENT WITH THE UNITED STATES

The U.S.-Panamanian relationship dates to 1903, when a 
bilateral treaty gave the U.S. the right to build and 
unilaterally control the transisthmian canal that was 
completed in 1914.  That relationship was altered by mutual 
agreement in the 1977 Panama Canal Treaties, signed by 
President Jimmy Carter and General Omar Torrijos, which 
stipulate that Canal administration will pass to Panamanian 
control and that all U.S. troops will withdraw from Panama 
by December 31, 1999.  The current U.S.-Panamanian 
relationship is cooperative and businesslike as both 
partners work to prepare for the U.S. withdrawal and the 
Panamanian takeover of the Canal and U.S. base properties.  
Managing the Treaty implementation process is one of the 
prime challenges of the administration of President Perez 
Balladares.

President Perez Balladares is a U.S.-trained businessman.  
Foreign Minister Gabriel Lewis Galindo is a former Canal 
Treaties negotiator who spent years in exile in the U.S. 
during the Noriega era.  Both understand the U.S. political 
system, speak fluent English, and have easy access to the 
highest levels of the U.S. government.

Immediately upon taking office in September 1994, the 
Balladares government agreed to a U.S. request to allow the 
temporary lodging of up to ten thousand Cuban migrants (then 
overcrowding U.S. facilities at Guantanamo Bay in Cuba) on 
U.S. defense sites in Panama.  Over 8,500 Cuban boat people 
were given safehaven in Panama between September 1994 and 
March 1995.  At OAS President Gaviria's request, Perez 
Balladares agreed to offer asylum to Haitian military 
leaders in October 1994 in order to help pave the way for 
the return of Haiti's democratic government.


MAJOR POLITICAL ISSUES AFFECTING BUSINESS CLIMATE

During the years leading up to the transfer of the Canal and 
the bases, the government of Panama faces two interrelated 
problems:  attracting foreign investment, and managing the 
vast properties that Panama will receive as the U.S. 
withdraws.

In 1993 the Endara government established the semi-
autonomous Inter-Oceanic Regional Authority (ARI) to manage 
the reversion process.  Perez Balladares, who had criticized 
the ARI for ineffectiveness and inefficiency, pushed through 
legislation in early 1995 that provided for presidential 
oversight of the Board's more important personnel and policy 
decisions.  He approved the board's selection of former 
Panamanian President Nicolas Ardito Barletta as day-to-day 
administrator of the ARI.  Barletta took office in June 
1995.  Expressing dismay over the government's lack of 
preparations for reversion and concern for the security and 
maintenance of the properties the U.S. was preparing to 
transfer to Panama, Barletta asked for some delays in 
reversions to give the government more time to decide how 
best to protect and to promote the properties.  ARI has 
hired Nathan Associates to prepare a "Master Plan" for use 
of the properties.


BRIEF SYNOPOSIS OF POLITICAL SYSTEM, SCHEDULE FOR ELECTIONS, 
AND ORIENTATION OF MAJOR POLITICAL PARTIES

An independent nation since 1903, Panama is a representative 
democracy with three branches of government:  executive and 
legislative branches elected by direct secret vote for 
5-year terms, and an independent, executive-appointed 
judiciary.  The U.S. military intervention of December 1989 
brought the legitimately-elected government to power and 
ousted narco-dictator General Manuel Noriega's military 
regime.  This move ushered in a period of democracy-building 
and national recovery that culminated in May 1994 with the 
first free and fair national elections in almost three 
decades.  Panama abolished its military by constitutional 
amendment in late 1994.  Its democratic institutions are 
continuing to develop to meet the social and economic needs 
of Panama's 2.5 million ethnically diverse citizens.

Ernesto "Toro" Perez Balladares was sworn in as president on 
September 1, 1994.  Stressing "national concilliation" after 
the election, President Perez Balladares gave about a third 
of his cabinet posts to figures from outside the ruling 
Democratic Revolutionary Party (PRD).

The president has broad powers under Panama's constitution, 
but must work with a 72-member unicameral legislative 
assembly in which his party, the PRD, and its political 
allies have a bare majority.  Although the assembly lacks 
strong budgetary authority, it does play a crucial role in 
shaping political, economic, and social initiatives; Perez 
Balladares is wooing shifting constellations of the dozen-
plus parties represented in the assembly to build consensus 
for important legislative projects.

"Toro's" PRD, the political arm of former dictators Generals 
Omar Torrijos and Manuel Noriega, has a chequered history.  
On the one hand, the party in the 1970s championed the cause 
of the poor in a rigid and static society, empowering an 
otherwise disadvantaged lower class.  On the other hand, the 
party's misuses of its governmental privileges during the 
1970s and 1980s, coupled with its disregard of human rights 
and its penchant for official corruption, have generated 
widespread concerns about its commitment to democracy and 
good governance.  Perez Balladares promised during the 
elections that the PRD had reformed following Operation Just 
Cause and would adhere to democratic and fair business 
practices.

During the first year of the Perez Balladares 
administration, the opposition parties in the assembly have 
been subdued and quiescent.  Demoralized by defeat in the 
election, and politically fragmented, the opposition has not 
managed to organize a united front against Perez Balladares' 
more disciplined and united PRD.  The opposition will 
probably not become a more important political force until 
roused by the 1999 national election campaign.



IV.  MARKETING U.S. PRODUCTS AND SERVICES


DISTRIBUTION AND SALES CHANNELS

Business practices in Panama are very similar to those in 
the U.S. i.e., 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, Santiago, 
Chitre and Colon. 

Generally, the marketing channel structure in Panama is 
simple.  Direct importers act as wholesalers and in some 
cases also as retailers.  This situation is common in the 
case of apparel, automotive parts and hardware products.  In 
the case of consumer goods and food and medicines, the 
retail operation is separate from the wholesale operation.  
In the industrial goods sector, 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 located in the Colon Free Zone (CFZ).  
Generally, CFZ importers/distributors have affiliated stores 
in Panama City for retail sale to the local market.  


USE OF AGENTS/DISTRIBUTORS; FINDING A PARTNER

According to Panama's constitution, nationals and foreigners 
are equal 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.  However, there are restrictions on foreigners 
operating retail trade activities and practicing certain 
professions.

Agents and distributors in Panama are regulated only 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.


FRANCHISING

Panama is receptive to U.S. style franchising.  The market 
for both specific and general franchising opportunities is 
attractive, since Panama maintains no control on royalty 
payments or transfers.  Under the Panamanian Constitution, 
however, retail outlets, can only be owned by Panamanian 
citizens.   Recreation, entertainment services, automotive, 
as well as hotel and motel franchising operators will find a 
fertile market as the local market demands better facilities 
and services.  The U.S. Embassy recommends consulting a 
local attorney for details on how to set up a franchise in 
Panama.  


DIRECT MARKETING

Key factors for market success in Panama are: high quality, 
customer service, brand-name recognition and attractive 
packaging.  Panama is a country of 2.5 million.  U.S. 
products targeting along the middle to upper-middle income 
markets compete well, since these Panamanians have a 
penchant for high quality U.S. products.

Those with high disposable income follow sophisticated U.S. 
and European consumption patterns.  Most high-end U.S. and 
foreign brand names are represented in Panama.  An 
aggressive marketing strategy improves the level of success 
in meeting the needs of a trend-conscious market.


JOINT VENTURES/ LICENSING

Joint ventures are not common in Panama.  Joint ventures are 
formed for a specific period of time, such as for a specific 
construction or technology transfer contract/concession, 
rather than a long-term business venture.  The profits from 
joint ventures are to be distributed annually to each joint 
venture partner, and are taxed in the same manner as any 
other income.

Panamanian law does not regulate the registration of license 
agreements.  Nevertheless, common practice is to accept 
license agreements over registered trademarks.  The 
agreements must be attached to the registered trademark and 
filed with the Industrial Property Department in the 
Ministry of Commerce and Industry.  The agreements become 
part of the file on said trademark.

Panama offers a unique condition for licensing, distribution 
arrangements and joint ventures as well as routine buy/sell 
operations.  The CFZ offers the U.S. exporter looking for a 
share of the region's market a convenient one-stop 
distribution center covering the entire region.   The 
problems of money laundering, intellectual property piracy 
and drug trafficking in the CFZ, however, are such that U.S. 
companies must be wary.


STEPS TO ESTABLISHING AN OFFICE

Panama has one of the most modern and flexible corporate 
laws in Latin America.  The following are some of the 
advantages offered to Panamanian  "Bearer Share" 
Corporations:

1.  Two or more persons of any nationality, even though not 
domiciled in Panama, may organize a corporation for any 
lawful purpose.  The articles of incorporation may be 
executed anywhere, even outside of Panama, and in any 
language.

2.  There are no requirements regarding the amount paid in 
capital.

3.  Ownership of a Panamanian corporation may reside in a 
single individual or corporation and no part of the capital 
needs to be held by a Panamanian.

4.  There are no nationality or residence requirements for 
shareholders.

5.  Neither the directors nor the officers are required to 
be shareholders.

6.  The Board of Directors must be composed of at least 
three directors, but one person may hold more than one 
position.

7.  Meetings of shareholders or directors may be held 
outside of Panama.  Proxies may be used by 
shareholders/directors.

In order to form a corporation in Panama, the client must 
furnish the following information:

1.  The name of the corporation.  It may be in any language, 
but it must terminate in a word or abbreviation indicating 
that it is a corporation.

2.  The objectives and purpose of the corporation.

3.  The amount of the authorized capital. Usually the 
authorized capital will consist of US$ 10,000 divided into 
100 shares of US$ 100 each.

4.  The types of shares, may be nominative or bearer share.

5.  Duration of the corporation, usually perpetual.

6.  The full names and addresses of three or more directors 
and/or officers.

7.  The domicile of the corporation.

The time period usually involved in setting up a corporation 
is from one to two months.  Attorney  fees  range  from  US$ 
600  to  US$ 1,500.

In order to engage in commercial or industrial activities, 
all corporations, partnerships or individuals must obtain 
proper authorization from the Ministry of Commerce and 
Industry.  There are three basic types of licenses involved:

A)  Commercial License Class A is required for wholesale 
operations, commercial and mortgage banks, financial 
companies, international financial brokers, insurance and 
reinsurance companies, international transportation 
companies, mutual funds, public utilities, and high-
technology service companies.  

B)  Commercial License Class B is required for retail 
businesses; including representation agencies, service 
companies, bars, restaurants, drugstores, real estate 
agents, gas stations, local transportation, distributors and 
others.  This license is only granted to Panamanians or 
corporations owned solely by Panamanians. 
C)  An Industrial License is required for extractive and 
manufacturing industries, as well as construction companies.
   (Refer to Appendix E for the contact at the Ministry of
    Commerce and Industry).

Exemptions for business license requirements are granted to 
persons or legal entities engaged exclusively in 
agriculture, cattle, bee, or poultry raising, or in the 
manufacturing and sale of handicrafts, provided that the 
work is not performed by hired workers.  Licenses must be 
kept at all times in a visible and accessible place.  The 
cost for obtaining a license ranges from US$ 250 to US$ 750.  
Also, an annual tax is levied based on the net worth of the 
company, as stated in the income tax return.


SELLING FACTORS/TECHNIQUES

Panama has the highest per capita income in Central America.  
The majority of income is skewed to a small, consumer goods 
oriented economic class.  These upper-middle and upper-class 
families have high levels of disposable income.  They are 
interested in purchasing high quality, trend-setting goods; 
price plays less of a factor in purchasing an item for this 
class than for the middle to lower income classes.  The 
majority of Panamanians remain interested in quality but 
price plays a more important role in the purchase decision.

The use of the U.S. dollar as legal currency and consumer 
preference for high quality products at a good price are two 
reasons for high acceptance of U.S. products in Panama.  
Overall, U.S. products compete well in the market and are 
considered of good quality.  However, in many instances, in 
order to maintain their market share, U.S. products must 
compete against often lower priced products especially from 
the Far East.  For example, as in the U.S. itself, Japanese 
and Korean electronics dominate that market because of 
aggressive market entry techniques and good quality at 
competitive prices.


ADVERTISING AND TRADE PROMOTION 

Television and newspaper advertising are the promotion tools 
of choice for the majority of distributors of U.S. products.  
Panama has a very competitive advertising market, with 
standard prices and very good production quality.  
Additionally, trade show and exhibitions have proven to be 
effective tools for trade promotion.  Special sale prices 
are usually advertised in newspapers during weekends.

Most foreign manufacturers of consumer products also keep a 
high profile presence in the country through large 
billboards, sponsored sports events and T.V. advertising.  
Radio advertising is mainly utilized outside of Metropolitan 
Panama City.



Major Newspapers:

El Panama America
Advertising Chief - Margaret de Ucar
P.O. Box B-4
Panama 9A, Republic of Panama
Tel:  (507) 230-1666
Fax:  (507) 230-1033
Daily Circulation: is 22,000
Format: standard
Advertising prices: US$ 7.00 per columnar inch, each page 
has 126 columnar inches.

La Estrella de Panama
Advertising Manager - Angie de Ochy
P.O. Box Q
Panama 4, Republic of Panama
Tel:  (507) 227-0555
Fax:  (507) 227-0723
Daily Circulation: 21,200
Format: standard
Advertising prices: US$ 8.00 per columnar inch, each page 
has 126 columnar inches. 

La Prensa
Advertising Manager - Adela Mendoza
P.O. Box 6-4586, El Dorado
Panama, Republic of Panama
Tel:  (507) 221-7222
Fax:  (507) 221-7328
Daily Circulation: 38,000
Format: standard
Advertising prices: US$ 11.00 per columnar inch, each page 
has 126 columnar inches.

Major advertising agencies are associated with international 
advertising firms.  (Refer to Appendix E for contact 
information on advertising agencies).


PRICING PRODUCT

The price structure for import goods in Panama depends on 
the level of competition for a product.  The costs of 
transportation and import duties vary from item to item.  In 
general, prices for consumer products and food are higher 
than world average because of protectionism and 
cartelization of the local market.  For the sake of 
illustration, however, the sample below offers average costs 
added to the product as it reaches the consumer. The 
percentages average 20% for import duties and 20% each for 
wholesale and retail markups.

Average Pricing Schedule
                            $ Price

     CIF Panama             $100.00
     Import Duty              20.00
     Total Landed Cost      $120.00
     Wholesale Price         150.00
     Retail Price           $187.50


Note: A 5% value added tax over CIF value is assessed at the 
time of customs liquidation.  Since this tax is placed on 
all goods, domestic and imported, and is passed through to 
the consumer, it is not included in this calculation.


SALES SERVICE/CUSTOMER SUPPORT

Competition among distributors is reflected in the training, 
counseling and support they can provide to their customers.  
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, etc.  


SELLING TO THE GOVERNMENT

Panama does not have a Central Procurement Office such as 
the U.S. General Services Administration (GSA).  All 
purchases of goods and services of any significant value are 
by law advertised as a public bid.  Any company wishing to 
participate in public bids (amounting to US$ 1 million and 
above, in the case of infrastructure projects and US$ 
500,000 and above, in goods and services) must be registered 
with the Ministry of Treasury.  This Ministry, by law, keeps 
a register of prequalified companies that are potential 
suppliers to the Government.  Lack of transparency, 
excessive delays and bureaucracy in the bid selection 
process have caused problems for U.S. and other bidders in 
important government bids in the past.  It is important that 
your firm register.  (Refer to Appendix E for contact 
information on the Ministry of Treasury - Registry of 
Prequalified firms).


PROTECTING YOUR PRODUCT FROM IPR INFRINGEMENT

Panama is a member of the World Intellectual Property 
Organization (WIPO), the Geneva Phonograms Convention, the 
Brussels Satellite Convention, and the Universal Copyright 
Convention.  Although Panama is not a member of the Bern 
Convention for the Protection of Literary and Artistic 
Works, the Government of Panama has submitted to its 
National Assembly legislation for Panama to accede to the 
Paris Convention for the Protection of Industrial Property.  
(Refer to Section VII: Protection of Property Rights, for 
more information).


NEED FOR A LOCAL ATTORNEY

The law requires that every corporation organized pursuant 
to the laws of Panama have a resident agent within Panama, 
who must be an attorney.  The annual fee for this service is 
about US$ 200.  It is estimated that over 400,000 
corporations are registered in Panama.

Legal fees for professional services in connection with the 
organization of a corporation normally range from US$ 600 to 
US$ 1,500.

Registering a national trademark, patent or a sanitary 
registration application requires a power of attorney.  A 
copy of the list of attorneys can be obtained in the 
National Trade Data Bank (NTDB) with the domestic and 
foreign offices of the U.S. Department of Commerce or from 
the U.S. Consulate in Panama City.  (Refer to Appedix E for 
Washington-Based USG Contacts).


V.  LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT


BEST PROSPECT FOR NON-AGRICULTURAL GOODS AND SERVICES

Rank of Sector: 1
Name of Sector: Electrical Power Systems
ITA Industry Code: ELP
                         1994      1995      1996
                     (US$ millions, unless otherwise noted)
Total Market Size        70.0       80.0     92.0
Total Local Production    0.0        0.0      0.0
Total Exports             0.0        0.0      0.0
Total Imports            70.0       80.0     92.0
Imports from the U.S.    17.5       19.2     26.8
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

(The above statistics are unofficial estimates.)

Comments:  In early 1995,  the Government of Panama passed 
legislation allowing the private sector to generate 
electricity for commercial purposes.  Private firms will be 
allowed to generate electricity for commercial resale to 
IRHE, the state electrical utility, or to third parties.  
This situation opens opportunities for U.S. electric power 
system exporters.  Panama has a relatively high electricity 
rate (62 percent), compared with the rest of Central America 
(average of 51.4 percent).  Panama's production costs are 
also the highest in the region (11.12 cents per kwh) as 
compared with the average in the region of 9.19 cents.   
Panama has an installed base of 892 MW, of which 550.5 MW is 
hydro electric and 341.7 MW is thermo electric.  Although 
Panama is not currently facing electrical energy shortages, 
the demand is growing at an estimated rate of 40 MW per year 
and IRHE is not in the position to make the required 
investment to meet it.   IRHE recently announced a bid to 
purchase energy from a 100 MW plant to be constructed and 
operated by the private sector.  Additionally, IRHE is 
negotiating with the International Development Bank (IDB) 
the construction of a 120 MW hydro electric plant (Esti 
project).  Main companies competing in the local market come 
from the USA, Japan, Italy, England and Germany.


Rank of Sector: 2 
Name of Sector: Computers and Peripherals
ITA Industry Code: CPT
                         1994      1995      1996
                      (US$ millions, unless otherwise noted)
Total Market Size        35.0      40.0      46.0
Total Local Production    0.0       0.0       0.0
Total Exports             0.0       0.0       0.0
Total Imports            35.0      40.0      46.0
Imports from the U.S.    21.0      24.0      28.0
Exchange Rate         1 U.S. Dollar = 1 Balboa (Fixed Rate)

(The above statistics are unofficial estimates.)

Comments:  A number of factors support the positive outlook 
for the computers and peripherals sector in Panama: (1), 
even though the economy has slowed in 1995 the demand for 
office automation remains high among the principal growth 
sectors of the economy; (2), import duties for computers 
(average of 7 percent over C.I.F. value) are relatively low; 
(3), there remains an easy access to computer suppliers 
locally and abroad, particularly in Miami; (4), there exists 
a growing computer culture, as a result of the high number 
of Panamanian graduates from U.S. schools, and the local 
availability of computer magazines, journals and other 
literature from the U.S.  Computer products from the U.S. 
enjoy a high receptivity and are perceived as incorporating 
state-of-the-art technology.   The U.S. keeps a strong 
position in this market with a market share above 60 
percent.  Prices for U.S. computers are competitive against 
competing products from Japan, Korea and Taiwan.  Sub-
sectors with highest growth potential are: personal 
computers, mid-range computers and non-impact printers.   
Most promising end-users are banks, commercial 
establishments, universities and government organizations.


Rank of Sector: 3
Name of Sector: Medical Equipment
ITA Industry Code: MED
                            1994       1995       1996
                     (US$ millions, unless otherwise noted)
Total Market Size           18.0       20.7       23.2
Total Local Production       0.0        0.0        0.0
Total Exports                0.0        0.0        0.0
Total Imports               18.0       20.7       23.2
Imports from the U.S.       13.5       15.5       17.6
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

(The above statistics are unofficial estimates.)

Comments:  The medical equipment market will grow at an 
estimated average rate of 12 percent during the next 2-3 
years.   This growth is supported by the current 
government's commitment to upgrade the quality of services 
offered by the public health system.   In 1995, the 
government's Social Security System began building 8 new 
clinics and hospitals valued at US$ 27 million.  The 
Ministry of Health is building a 300-bed, US$ 25 million new 
hospital in metropolitan Panama City.  The Interamerican 
Development Bank (IDB) is financing a US$ 52.8 million 
health care reform program.  In addition, the private sector 
is making substantial investments in new clinics and 
hospitals both in Panama City and elsewhere in the country.  
U.S. medical equipment products have a high receptivity 
score and are represented by the best qualified distributors 
in the country.   A great number of Panamanian doctors have 
been trained in the U.S. and have exposure to U.S. medical 
equipment and technology.  There are no restrictions to 
importing medical equipment in Panama.   Import duties are 
in the range of 15 - 27.5 percent over C.I.F. value.  Main 
competitors come from Italy, France and Germany.  Most 
promising sub-sectors are: disposable products, imaging 
equipment and diagnostic equipment.


Rank of Sector: 4
Name of Sector: Computer Software
ITA Industry Code: CSF
                            1994       1995       1996
                      (US$ millions, unless otherwise noted)
Total Market Size           12.0       14.5       19.0
Total Local Production       1.5        1.8        3.0
Total Exports                0.0        0.0        0.0
Total Imports               10.5       12.7       16.0
Imports from the U.S.        9.8       11.9       15.8
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

(The above statistics are unofficial estimates.)

Comments:  The market outlook for computer software improved 
significantly with the passage in early 1995 of a copyright 
bill that covers computer software products.  Software 
piracy by individuals and corporations has been the biggest 
problem faced by the computer software industry.  The new 
bill provides the legal framework for fighting piracy 
practices at all levels,  although as of July 1995, the new 
law had not been implemented.  Many corporations have 
suspended the practice of copying software, and computer 
hardware distributors are refraining from giving away free 
software to their clients.  Best opportunities are for 
software productivity tools, i.e. data base software, 
oriented to the mid range/mainframe environment.  This type 
of software has traditionally represented over 80 percent of 
the market.  Another important market here is for personal 
computers.  Office automation software, including word 
processing, spreadsheet, graphics and data base and 
telecommunication applications will be in high demand for 
the PC-oriented market. Another emerging market is the 
multimedia market, including games, educational and other CD 
Rom-based applications.  U.S. software publishers are well-
known in Panama.  Some software companies from Chile, 
Venezuela and Costa Rica have targeted Panama for the 
introduction of some spanish-language products, mainly 
business applications, e.g., payroll, accounts 
payable/receivable, etc.  There are no restrictions for 
importing/marketing foreign software into Panama.


Rank of Sector:  5 
Name of Sector: Automotive Parts and Service Equipment
ITA Industry Code: APS
                            1994        1995        1996
                      (US$ millions, unless otherwise noted)
Total Market Size           43.0        47.0        52.0
Total Local Production       0.0         0.0         0.0
Total Exports                0.0         0.0         0.0
Total Imports               43.0        47.0        52.0
Imports from the U.S.       13.0        14.2        16.1
Exchange Rate         1 U.S. Dollar = 1 Balboa (Fixed Rate)

(The above statistics are unofficial estimates.)

Comments: The market for new automobiles has boomed since 
1990.  This situation creates a derived demand for 
automotive parts and service equipment.  The car population 
in Panama is estimated at 260,000 units.   Approximately 
8,000 new cars will be sold in 1995.   U.S. cars sales have 
shown a constant growth during recent years, as Japanese 
products become less competitive because of the Japanese yen 
appreciation against the U.S. dollar.  As the market for new 
cars appears to be reaching saturation levels, market 
prospects for automotive parts and service equipment will 
increase proportionally to the decline in new car sales.  
Car owners will be paying more attention to maintaining and 
servicing their cars.  U.S. participation in the automotive 
parts and service equipment is relatively low (a market 
share of 30-35 percent).  Main competitors are Japan, Korea 
and Taiwan.  However, the U.S. market position will improve 
as the demand for U.S. cars increases.  Demand will remain 
strong for those U.S.-made car parts and accessories which 
fit Japanese models.  Import duties for automotive parts 
range between 10-15 percent over C.I.F. value.  There are no 
import restrictions for importing and marketing these 
products.  Sub-sectors offering best market opportunities 
are: servicing equipment, tubes and tires, and engine parts.


Rank of Sector: 6
Name of Sector: Management Consulting Services
ITA Industry Code: MCS
                            1994       1995       1996
                     (US$ millions, unless otherwise noted)
Total Market Size           13.0       15.5       18.2
Total Local Production       3.0        3.5        4.2
Total Exports                0.0        0.0        0.0
Total Imports               10.0       12.0       14.0
Imports from the U.S.        8.0        9.7       11.6
Exchange Rate         1 U.S. Dollar = 1 Balboa (Fixed Rate)

(The above statistics are unofficial estimates.)

Comments:  Three factors provide favorable conditions for 
the development of the management consulting services market 
in Panama.   First, under the 1977 Panama Canal Treaties, 
there are vast amounts of land and other infrastructure 
resources reverting to Panama which are currently occupied 
by U.S. military facilities or are former Canal Zone 
property.   Panama will need to implement a number of 
projects to make an efficient use of these resources.  The 
World bank, the UNDP and the Inter-American Development Bank 
have expressed interest in financing specific projects in 
these areas.  Second, the Government of Panama is committed 
to increasing the quality and efficiency of public utility 
services, including telecommunications, water resources, 
energy generation, etc.  Much help will be needed to 
modernize/privatize the government organizations providing 
these services.  Finally, as Panama accedes to the World 
Trade Organization, Panamanian companies will have to 
participate in a more competitive environment.  This 
situation will create the need for consulting services aimed 
at increasing their competitiveness and efficiency levels.  
The above factors will generate market opportunities for 
U.S. consulting companies in the following areas: land 
development, environment, marketing, tourism development, 
privatization, energy generation, etc.   


Rank of Sector:  7
Name of Sector: Telecommunications Equipment
ITA Industry Code: TEL
                              1994       1995       1996
                     (US$ millions, unless otherwise noted)
Total Market Size             37.0       44.4       58.0
Total Local Production         0.0        0.0        0.0
Total Exports                  0.0        0.0        0.0
Total Imports                  7.0       44.4       58.0
Imports from the U.S.          6.2        8.0       14.5
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

(The above statistics are unofficial estimates.)

Comments:  The telecommunications sector in Panama is 
undergoing a radical change.  The government national 
telecommunications company (INTEL) was converted into a 
corporation and 49 of its shares is scheduled to be offered 
to a private company, which will administer and operate 
INTEL S.A.  The other 49 percent will be retained in the 
hands of the Government of Panama (GOP).  The remaining 2 
percent will be placed in trust for INTEL's employees.  The 
question of effective majority control remains unresolved.   
Furthermore, the GOP is committed to offering the cellular 
telecommunications systems in two bands, A and B.  Band A 
will be wholly operated by the private sector under a 
government concession, and B will be operated under a joint 
venture arrangement between INTEL and a private company.   
All of these changes will open the doors to modernization 
and eventual competition in this sector.  This situation 
will represent increased market opportunities for U.S. 
exporters.  There are approximately 323,000 telephone lines 
in the country and a line penetration rate of 10.9 per 100 
inhabitants.  INTEL is in the process of upgrading its 
transmission lines to fiber optics.  There is also an 
ongoing process to fully digitalize and increase the 
switching network.  The private sector demand for PABX 
systems, radio trunk systems and paging systems has been 
constantly growing, as well as satellite-based IBS/teleport 
telecommunications facilities.  Main competitors in the 
market place are from Japan, Sweden France and Canada.


Rank of Sector: 8
Name of Sector: Hotel and Restaurant Equipment
ITA Industry Code: HTL
                           1994       1995       1996
                      (US$ millions, unless otherwise noted)
Total Market Size           8.0        9.9       11.3
Total Local Production      0.0        0.0        0.0
Total Exports               0.0        0.0        0.0
Total Imports               8.0        9.9       11.3
Imports from the U.S.       4.0        4.8        6.0
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

(The above statistics are unofficial estimates.)

Comments:  The market outlook for hotel and restaurant 
equipment in Panama has improved as a result of a tourism 
incentive law, passed in 1994.  It allows for a number of 
fiscal and other incentives to those companies investing in 
tourism-oriented facilities such as hotels, restaurants, 
tourist resorts, etc.   The GOP is interested in attracting 
new foreign and domestic investment.  There are currently 3 
major hotels under construction in Panama and 4 more are 
planned in other parts of the country.  The Panamanian 
Tourism Institute (IPAT) is considering a number of 
applications for new projects that will benefit from the new 
law.  Additionally, the current land reversions of primarily 
U.S. military facilities to Panamanian hands, should 
generate further tourism projects for Panama.   The hotel 
and restaurant equipment market is very competitive.  The 
U.S. maintains a strong leadership position.  Main 
competitors in the kitchen equipment market are from France, 
Italy, Spain and Brazil. In other product lines, such as 
refrigeration and air conditioning equipment, competitors 
come from Japan and Korea.  Best prospects in this sector 
are: kitchen equipment, decoration equipment, e.g., 
draperies, furniture,  air conditioning equipment, and 
elevators.  No import restrictions exist for these products 
and import duties are in the range of 10-25 percent over 
C.I.F value.


Rank of Sector: 9
Name of Sector: Franchising
ITA Industry Code: FRA
                           1994       1995       1996
                     (US$ millions, unless otherwise noted)
Total Market Size (1)      70.0       77.0       85.0
Total Local Production      5.0        6.0        7.0
Total Exports               0.0        0.0        0.0
Total Imports (2)          65.0       71.0       78.0
Imports from the U.S. (3)  65.0       70.0       75.0
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

(1) total sales generated by franchises
(2) sales by local franchises
(3) sales by U.S. franchises

(The above statistics are unofficial estimates.)

Comments:  Panama has a number of special conditions which 
favor further development of the franchise market.   The 
U.S. dollar is legal tender in Panama.  Therefore, there are 
no exchange restrictions and royalties and fees can be 
freely remitted.  There is a high U.S. cultural affinity in 
Panama, as a result of the U.S. construction and operation 
of the Panama Canal, and the presence of  U.S. military 
bases.  Panama has one of the highest per capita income in 
the region, and a well-established, well-trained and well-
educated middle class.   These factors create an excellent 
environment for the development of the franchise market.  
Except for the Constitutional ban on foreign ownership of 
retail outlets, there are no major restrictions to the 
establishment of franchises in Panama.  The franchiser-
franchisee relationship is entirely regulated by their 
private contract, with no government intervention.  U.S. 
franchises enjoy a high receptivity and have a clear 
leadership in the market, especially in the fast food and 
car rental areas.  There are a few Colombian, Canadian and 
Central American franchises that are exploring the 
Panamanian fast food market, especially in the pizza, yogurt 
and fried chicken sub-sectors.  Best prospects for new 
franchises are: Hotels and campgrounds; sports & recreation; 
retail: shoes & clothing; food: ice cream & yogurt; 
restaurant and quick service; and photo framing & art.


Rank of Sector: 10
Name of Sector: Financial Services
ITA Industry Code: FNS
                              1994       1995       1996
                      (US$ millions, unless otherwise noted)
Total Market Size (1)       32,800     39,000     46,000
Total Local Production (2)   7,000      8,000     10,000
Total Exports                    0          0          0
Total Imports (3)           25,000     31,000     36,000
Imports from the U.S. (4)    1,300      1,500      2,000
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

(1) total assets of the bank system
(2) total assets of local banks
(3) total assets of foreign banks
(4) total assets of U.S. banks.

(The above statistics are unofficial estimates.)

Comments:  Panama is an international banking center.  There 
are 109 banks operating in Panama.  Of these banks, 61 have 
general licenses, i.e. provide a full range of banking 
services.   A total of 29 banks have international license, 
i.e. deal only with overseas operations.  The remaining 19 
banks have only representational offices.   The majority of 
banks are foreign; about 10 banks are Panamanian.  In 1994, 
the banking system granted credits amounting to US$ 6.5 
billion in the Republic of Panama.   There is a deficit of 
250,000 housing units in the country and the Government is 
committed to reducing this deficit.  This sector will 
represent excellent financing opportunities for local and 
foreign banks.  Investment banking is another promising area 
as large local companies are increasingly looking at non-
traditional financing sources such as corporate bond issues.  
Banks usually act as issuing agents.  The Panamanian stock 
market, founded in 1990, is another area of growth within 
the financial services market.  In 1991 stock market 
transactions were US$ 30.6 million;  in 1994 the figure rose 
to US$ 290.2 million, of which 85% were debt instruments.  
There is an ongoing project, financed by the Inter-American 
Development Bank, to unify all the stock exchanges in 
Central America.  This may enhance market opportunities in 
this area.  Panama is considered a haven for financial 
operations; government intervention is minimal. 


BEST PROSPECTS FOR AGRICULTURAL PRODUCTS

Name of Sector: Agricultural Consumer Oriented Products
PS/D: HVP
                            1994       1995       1996
                     (US$ millions, unless otherwise noted)
Total Market Size          161.7      170.3      179.2
Total Local Production 1/  329.7      347.1      365.4
Total Exports              285.0      300.0      315.9
Total Imports              117.0      123.2      129.7
Total Imports from U.S.     51.9       54.6       57.5
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

1/  Includes production for exports.

Comments:  U.S. exports of agricultural consumer-oriented 
products reached a record US$ 51.9 million in 1994.  Major 
products exported include: processed fruit and vegetables 
(US$ 9.2 million), wine and beer (US$ 8.4 million), snack 
foods (US$ 6.3 million), fresh fruits (US$ 4.3 million), 
breakfast cereals (US$ 3.2 million) and fruit and vegetable 
juices (US$ 3.8 million).  Main competitors are: Guatemala, 
Costa Rica, Chile, Denmark, Ecuador.

Best prospect sub-sectors (est. 1996 market size): Breakfast 
cereals (US$ 10.0 million).  Fresh fruits (US$ 9.5 million). 
Canned sardines (US$ 7.0 million).


Name of Sector: Bulk Agricultural Products
PS/D: G&F
                           1994       1995       1996
                      (US$ millions, unless otherwise noted)
Total Market Size         120.0      130.8      142.6
Total Local Production     71.0       77.4       84.4
Total Exports 1/            2.0        2.2        2.4
Total Imports              51.0       55.6       60.6
Total Imports from U.S.    34.7       37.8       41.2
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

1/	Includes domestic tobacco exports which reached US$ 1.3 
million in 1994.

Comments: U.S. exports of bulk agricultural products totaled 
US$ 34.7 million in 1994.  Major bulk commodities were: 
wheat (US$ 18.0 million) and yellow corn (US$ 13.8 million).  
Main competitors come from: Germany, Belgium, Denmark, 
France.

Best prospect sub-sectors (est. 1996 market size):  Wheat 
(US$ 20.0 million).  Yellow corn (US$ 15.6 million).  Malt 
(US$ 5.5 million).


Name of Sector: Intermediate Agricultural Products
PS/D: O&P
                            1994       1995       1996
                      (US$ millions, unless otherwise noted)
Total Market Size          105.0      110.3      115.7
Total Local Production 1/   80.5       84.6       88.7
Total Exports               28.5       29.9       31.4
Total Imports               53.0       55.6       58.4
Total Imports from U.S.     39.0       41.0       43.0
Exchange Rate          1 U.S. Dollar = 1 Balboa (Fixed Rate)

1/  Total includes domestic sugar exports which reached US$ 
17.1 million in 1994.

Comments:  U.S. exports of intermediate agricultural 
products reached a record high of US$ 39.0 million in 1994.  
Major products exported were: soybean meal (US$ 14.7 
million, record high), corn gluten (US$ 3.8 million) and 
corn oil (US$ 1.5 million).  Main competitor is Argentina.

Best prospects sub-sector (est. 1996 market size): Soybean 
meal (US$ 15.5 million).  Soybean oil (US$ 15.0 million).  
Corn gluten (US$ 4.2 million).



     SOURCES

Non-Agricultural Goods and Services
     -  Computer and Peripherals: AT&T, Grupo Informatica
     -  Automotive Parts and Services: Grupo Ford
     -  Medical Equipment: La Casa del Medico
     -  Telecommunication Equipment: INTEL, S.A.
     -  Financial Services: Asociacion Bancaria de Panama
     -  Franchising: Franquicias Panameñas
     -  Consulting Services: USAID, Consultores Financieros
     -  Electric Power Systems: IRHE
     -  Hotel & Restaurant Equipment: Diversiones Panama
     -  Computer Software: ADR Software

Agricultural Products
     -  Ministry of Agricultural Development


SIGNIFICANT INVESTMENT OPPORTUNITIES

The following areas offer excellent investment opportunities 
for U.S. companies.


Electric Power Generation

In February, 1995, the GOP passed legislation that allows 
IRHE, the government electric utility to purchase energy 
from private suppliers.   IRHE recently announced plans to 
purchase electric energy from a 100 M.W. plant to be 
constructed and operated by a private company.  Companies 
investing in a power plant can also sell energy to other 
Panamanian companies.  The Inter-American Development Bank 
(IDB),  is studying the possibility of financing a 120 M.W. 
hydroelectric plant to be constructed and operated by IRHE 
in the province of Chiriqui, although some observers believe 
the project will not be cost effective.  Panama's demand for 
electricity grows by 40 Megawatts per year.  Since IRHE does 
not have the investment capability to meet it, a growing 
participation of the private sector, particularly foreign 
investors, is necessary.  (For more information refer to 
Appendix E for the contact at IRHE.)

Health Care Services

The Inter-American Development Bank (IDB) is co-financing a 
US $52.8 million program aimed at:  improving the operating 
efficiency of health care institutions; improving the health 
of the general population; and, advancing the reform of the 
service sector.

The program includes the construction of 16 health care 
centers.  A number of studies will also be conducted, and 
substantial amounts of medical equipment will be acquired.  
(For more information refer to Appendix E for the contact at 
the Ministry of Health and the Panama office of the Inter-
American Development Bank.)

Mining Exploration and Operation

Panama has vast amounts of minerals resources, located in 
the central provinces of the country.  There is significant 
potential for gold, silver, copper, zinc, lead and, 
molybdenum exploitation.   No government restrictions exist 
for foreign companies to participate in mining explorations 
and operations, except for the requirement that 90% of all 
employees be Panamanians.  A few mining companies from 
Canada have made sizable investments in the mining sector.  
The two largest are Adrian Resources Corp., and Greenstone 
Resources, Inc.  These two companies have invested over US$ 
100 million in mining explorations during the last three 
years.   Several mining sites have easy access by road.  For 
information on mining investment opportunities, contact the 
Ministerio de Comercio e Industrias, Direccion de Recursos 
Minerales.  (For more information refer to Appendix E for 
the contacts at the Ministry of Commerce and Industry, 
Minerals Division and the Mining Chamber of Panama.)

Port Construction/Operation/Privatization

The GOP is interested in increasing the efficiency of its 
port system.  In achieving this purpose, the National Port 
Authority (APN), is promoting the construction of new ports 
and privatizing some operations of the country's major 
ports.  A new container port, the Manzanillo International 
Terminal, began operations last year, on the Atlantic side, 
under a joint venture arrangement between Stevedoring 
Services of America of Seattle, WA, and Motores 
Internacionales, a Panamanian distributor of Russian-made 
cars and trucks.  Half of this project financing comes form 
the World Bank's International Finance Corporation.  The 
Taiwanese company, Evergreen, is negotiating with the GOP 
the construction of a second container port on the Atlantic 
side.  Petroterminal de Panama, a joint venture between the 
GOP and Northville Industries of New York, NY., is planning 
to construct a new port facility in Chiriqui Grande on the 
Atlantic side.  APN announced recently that many port 
operations will be privatized in the Atlantic Port of 
Cristobal, Panama's most important port, and in the Pacific 
port of Balboa.  (For more information refer to Appendix E 
for the contact at the National Port Authority.)

Reverted Areas

As a result of the Panama Canal Treaties of 1977,  the 
United States is in the process of transferring to Panama 
70,000 acres of lands, more than 4,000 buildings, numerous 
bridges, and other infrastructures located in the former 
Canal Zone and the U.S. military bases.  The reversion 
process concludes in the year 2000.  Panama is committed to 
incorporating these resources to enhance the country's 
economic and social development.  A number of projects will 
have to be developed in these areas in the very near future.  
The Inter-American Development Bank is co-financing a US 
$9.2 million study that will define the plans for the 
efficient use these resources.  The GOP chartered the 
Interoceanic Regional Authority (ARI), to administer the 
reverted resources and to create a development strategy.  
Projects to be considered include manufacturing, assembly, 
tourism, warehousing, education, scientific research, energy 
generation, etc.  (For more information refer to Appendix E 
for the contact at the Interoceanic Regional Authority.) 

Road Construction and Rehabilitation

In 1994, the Government of Panama, in conjunction with the 
Inter-American Development Bank and the World Bank, began a 
US $420 million, five-year, road construction and 
rehabilitation program, to be completed in 1997.  The 
program includes road construction in rural areas, 
rehabilitation of major existing roads, bridge construction 
and maintenance, urban road maintenance and over pass 
construction.

Additionally, the GOP is seeking to expand the road network 
in metropolitan Panama City via administrative concessions.  
Under this scheme, private companies would make the 
necessary investment to construct and operate a road.  They 
would be permitted to recuperate the investment through a 
toll system.  A US $300 million (Corredor Norte and highway 
Panama-Colon) road project has been awarded to the Mexican 
company PYCSA.  Another US $150 million project (Corredor 
Sur) is in process of being awarded.

(For more information refer to Appendix E for the contact at 
the Ministry of Public Works.)  

Telecommunications

Panama is restructuring its telecommunications sector in 
order to make it more efficient and competitive.  
Significant investment opportunities will open as the 
modernization process is developed. 

The government telecommunications company (INTEL) has been 
converted into a corporation and 49 percent of its shares 
will be sold to the private sector.  Another 49 percent will 
be retained by the GOP.  The remaining 2 percent will be 
kept in a trust fund for INTEL employees.  The company 
acquiring the 49 percent of INTEL will also become the 
operator of INTEL S.A.   How it would operate while owning 
less than 50% of the stock remains to be worked out.

INTEL S.A. will operate a cellular telecommunications system 
in band B, in association with a private company.  A 
parallel cellular service will be offered to a private 
sector company in band A.  INTEL is currently engaged in 
expanding its switching network.  The digitalization of the 
system and the implementation of fiber optics are two 
important ongoing projects.  (For more information refer to 
Appendix E for the contact at INTEL S.A.) 


NOTE: The Government of the United States acknowledges the 
contribution that outward foreign direct investment makes to 
the U.S. economy.  U.S. foreign direct investment is 
increasingly viewed as a complement or even a necessary 
component of trade.  For example, roughly 60 percent of U.S. 
exports are sold by American firms that have operations 
abroad.  Recognizing the benefits that U.S. outward 
investments brings to the U.S. economy, the government of 
the United States undertakes initiatives such as Overseas 
Private Investment Corporation (OPIC) programs, Investment 
Treaty Negotiations and Business Facilitation Programs, that 
support U.S. Investors.


VI.  TRADE REGULATIONS AND STANDARDS


TRADE BARRIERS (TARIFFS, NON-TARIFF BARRIERS AND IMPORT 
TAXES)

Traditional policies on trade and economic incentives 
directed agricultural and manufacturing production toward 
import-substitution until the end of the 1980's.  Today, 
Panama's nominal tariff duties remain the highest in the 
region.  Panama averages 40% in tariff rates, whereas, its 
Central American neighbors average 20%.

The country has made some progress in lowering its duties 
and restrictions.  From 1991 to 1994 the Government of 
Panama enacted a trade liberalization program, with the 
following objectives:

-  To reduce the ceiling on import tariffs to 40 percent for 
industrial products and to 50 percent for agro-industrial 
products.
-  To eliminate all specific import tariff rates.
-  To eliminate quantitative import restrictions for 
agricultural products and replace them with tariff 
protection. 

The Government met the majority of these objectives.  
However, there are still some products subject to tariffs 
outside these limits such as processed tomato products, beer 
and cigarettes.  Other products, such as textiles and shoes, 
continue to have specific import duties.  Various other 
agricultural products remain subject to quantitative 
restrictions e.g., dairy products and certain grains.  

Panama is currently negotiating its accession to the World 
Trade Organization (WTO).  Tariff duties are expected to 
decline and most of the non-tariff barriers will be 
eliminated.


CUSTOMS VALUATION

Panama assesses most import duties on an ad valorem basis, 
except for a number of products that are still using a dual 
ad valorem and specific system.   the Government is, 
however, still in the process of eliminating this dual 
system.  The ad valorem system uses the declared C.I.F. 
value as the basis for import duty calculations and utilizes 
historical price information as a reference.  This method 
has been criticized by major private business organizations 
in the country.

In addition to the import duty, all imports into Panama are 
subject to a 5 percent transfer or value added tax (ITBM) 
levied on the C.I.F. value, plus import duty and other 
handling charges.  Pharmaceutical, food products and school 
supplies are exempt from ITBM tax.

Panama has recently changed its international trade 
classification system from the Customs Cooperation Council 
Nomenclature (CCCN) and Brussels Tariff Nomenclature (BTN) 
to the Harmonized System (HS).  Also, entry into the WTO 
will improve the present situation to provide a customs 
valuation system that conforms to international standards.


IMPORT LICENSES

No import licenses are required in Panama to engage in 
import activities.  Any company holding a commercial license 
can freely import goods into Panama.  A commercial or 
industrial license is issued to individuals or companies 
engaged in commercial or industrial activities.  



EXPORT CONTROLS

The Fiscal Code regulates all matters concerning the 
country's exports. The Code establishes that all national 
products may be exported, except:

-  drugs, with the exception of those having pharmaceutical 
or scientific purposes.
-  staple products determined by the Government on a 
temporary basis due to scarcity in the country; and,
-  those products the GOP determines not for export for 
reasons of convenience or in the economic interest of the 
country.

Exports subject to the payment of export taxes require an 
Export Authorization, which is issued by the National 
Customs Directorate, Ministry of the Treasury.  (See 
Appendix E for contact information.)  Exports subject to 
taxes are: bananas, metals, raw sugar, natural resources and 
foreign currencies.  Exports of textiles are also subject to 
an export authorization.


IMPORT\EXPORT DOCUMENTATION

Import Documentation

The processing of customs documents in Panama for the 
purpose of importing raw materials or finished goods is 
fast, efficient and reliable.  Merchandise imported into 
Panama must be cleared through customs by a customs broker 
licensed by the Government of Panama.  Exceptions are made 
for goods which are imported duty free, consigned to 
national and municipal governments, imported by foreign 
diplomats, for sales to the authorities of the Canal Area, 
sold to vessels transiting the Canal, or intended for 
reexportation. 


Basic import documentation required by the Panamanian 
Customs office is:

-  Import Declaration (Prepared and signed by a Customs 
Broker),
-  Commercial Invoice (To be presented in English or Spanish 
in quadruplicate),
-  Airway Bill,
-  Bill of Lading (To be presented in triplicate),
-  Commercial License Number,
-  Tax Clearance Certificate (Stating that the importer does 
not owe any taxes to the Government),
-  Phytosanitary Certificate (In case of meat and meat 
products, to be obtained from the U.S. Department of 
Agriculture), and,
-  Certificate of Free Sale (if required)

   Any food product or other items used for human 
consumption (including for use on human skin or clothes may 
be subject to the Certificate of Free Sale (CFS) 
documentation requirement.  The main purpose of the CFS is 
to prevent the dumping of inferior goods, especially for 
human consumption, to the Panamanian market.  The CFS must 
verify that a product is sold freely and used widely in the 
U.S.  Potential exporters of items subject to the CFS 
documentation requirement may wish to either contact:
  (1) their trade association which may provide the service 
issuing the documentation, or,
  (2) the Food and Drug Administration, Division of Programs 
and Enforcement Policy, 200 C Street, SW, Washington,  DC 
20204.


If for any reason the bill of lading or any other required 
document cannot be presented within 24 hours after the 
shipment has arrived, clearance of the goods will be 
permitted by posting a bond equal to the amount of import 
duties.  The bond is cancelled if the prescribed documents 
are presented in due form within a period of 90 days.  The 
bond may be extended, extendable in justified cases, an 
additional 90 days.

Export Documentation

A licensed customs broker is also required to handle the 
export paperwork related to merchandise exports.  The Panama 
Trade Development Institute (IPCE), a government 
organization, was created in 1984 to promote exports and 
investment.  IPCE facilitates the processing of export 
documentation through a "One Stop" (ventanilla unica) office 
which can reduce the export process to a few hours from a 
process that can take days or weeks.  (Refer to Appendix E 
for contact information on IPCE).

Export documentation required by Panamanian Customs 
authorities is:

-  Commercial Invoice,
-  Export Declaration (Prepared and signed by a Customs 
Broker),
-  Certificate of Origin (Issued by the Chamber of Commerce, 
Industry and Agriculture of Panama or the Panama Trade 
Development Institute),
-  Bill of Lading,
-  Airway Bill,
-  Veterinary, Sanitary or Phytosanitary Certificate (when 
applicable).


TEMPORARY ENTRY

The Panamanian Fiscal Code establishes a temporary entry 
regime, up to one year, for all types of merchandise.  There 
are two options.  First, the goods can enter the country 
under a guarantee payment equivalent to the total value of 
the import duty.  This payment will be reimbursed at the 
time the goods leave the country.  Second, an insurance 
company issues a bond guarantee covering the import duty 
value if the goods fail to exit the country in a pre-
determined period of time.

Special temporary provisions apply in the case of trade 
shows and exhibitions taking place at the Atlapa Convention 
Center, Panama's exhibition and convention center.  Goods 
can enter the Atlapa Convention Center with no warranty 
payment or bond required.

Samples with commercial value are subject to temporary entry 
requirements.  Samples with no commercial value are admitted 
duty free.  If samples arrive in large containers, they will 
be dutiable even though they may be marked as free sample.


LABELING, MARKING REQUIREMENTS

Panama has no special regulations for labeling and marking. 
Labels are required to have basic information regarding the 
name and address of the manufacturer, expiration date, list 
of ingredients, lot number, and the product form, e.g. 
powder, liquid, etc.

Labels in English are accepted, except medicines, household 
products and special foods which require special 
instructions.  In these cases instructions regarding dosage, 
usage, warnings, etc., must be in Spanish.

All goods arriving in Panama intended to be reexported 
immediately must be marked "PANAMA IN TRANSIT" on each box 
or outside container. 

In general, products which comply with U.S. labeling and 
marking requirements, will also meet local requirements and 
are suitable for sale in Panama.


PROHIBITED IMPORTS

The following products cannot be imported into Panama:

-  Counterfeit coins or printed material that imitates 
monetary currencies,
-  Equipment or instruments for manufacturing coins,
-  Liquors, wines, beers or medicines with labels that 
describe false or deceiving contents, or of any kind of 
harmful preparation,
-  Certain firearms or war materials,
-  Foreign lotteries or raffle tickets,
-  Opium in the form of gum or for smoking,
-  Obscene brochures, books, newspapers, magazines, or 
postcards containing negative portrayals of the country's 
culture, civilization or dignity, and,
-  Plants, seeds, or animals when determined by the Ministry 
of Agriculture.


STANDARDS (E.G. ISO 9000 Usage) 

While the Government of Panama has not designated a domestic 
registering authority for participation in the International 
Standards Organization ISO-9000 program, there is no legal 
limitation in Panama on participation in ISO-9000 by firms 
doing business here.  Panama is a member of the Pan American 
Standards Commission (COPAN), headquartered in Venezuela.


FREE TRADE ZONES/WAREHOUSES

The Colon Free Zone

The Colon Free Zone (CFZ), the largest in the Western 
Hemisphere and second to Hong Kong's, is located in the City 
of Colon, five kilometers from the Port of Cristobal on the 
Atlantic side of Panama and 90 kilometers from Panama City.  
Goods (except firearms or petroleum products) may be 
imported, stored, modified, repacked and re-exported without 
being subject to any customs regulations.

Generally,  most  merchandise  is  transshipped from Panama 
to other parts of the Western Hemisphere and Europe.  
Imports into the CFZ come mainly from the Far East.  The 
largest individual supplier of the CFZ in 1994 was Hong 
Kong, followed by Japan, the United States, Taiwan and South 
Korea.  These five countries supply 67.5 percent of all 
imports through the CFZ.  In descending order of exports 
from the CFZ, Colombia is the largest purchaser of 
merchandise, comprising nearly one quarter of all CFZ 
exports.  Other principal buyers are Ecuador, Panama 
(domestic market), Venezuela, Aruba, the United States, 
Costa Rica and Chile.  These countries buy 60% of all 
exports from the CFZ.

The CFZ is administered as an autonomous institution of the 
Panamanian Government.  It has been in operation since 1953.  
Today it is completely developed, and covers 300 hectares, 
including 45 hectares designated as an industrial zone.

The CFZ offers free movement of goods and complete exemption 
from taxation on imports and re-exports.  There are no taxes 
on the export of capital or the payment of dividends.  In 
addition, there are reduced income tax rates on earnings 
from re-export sales.  Furthermore, firms located in the CFZ 
are exempt from import duties as well as from guarantees, 
licensing, and other requirements and limitations on 
imports.  Due to its geographic location, the CFZ is a major 
factor in facilitating the supply of goods from large 
industrialized countries to the consumer markets in Latin 
America.  Unfortunately, the CFZ is also used by the 
Colombian drug cartels for money laundering and drug 
trafficking.  Other suspicious CFZ transactions include 
trade in pirated intellectual property and stolen vehicles.

The CFZ is operated and managed by its Board of Directors, 
an Executive Committee and the General Manager of the 
institution. Corporations or individuals of any nationality 
may establish operations in the CFZ without requirements of 
a commercial license or a minimum investment of capital.  
Firms interested in operating in the CFZ must file an 
application and provide a copy of its articles of 
incorporation and bank references.

There are four basic ways of doing business in the CFZ:

1.  Leasing lots on which the firm builds a warehouse or 
other facilities as designed by the firm.  The land lease 
arrangements are granted for a 20-year period;
2.  Purchasing an existing facility from the Zone 
Administration;
3.  Reaching an agreement with a company already established 
in the CFZ as the operator's representative.  The cost of 
this service is set by mutual agreement between the parties 
concerned.  Representation agreements shall be subject to 
the approval of the Zone Administration; or, 
4.  Leasing a public warehouse operated by the Zone 
Administration.  The firm receives its goods and stores them 
like any other company there.  There are no fixed costs and 
the payment of services is based according to the weight or 
volume of the goods stored.

Companies operating in the CFZ are engaged in four types of 
sales operations:

1.  Foreign Trade Operation, involving the re-exportation of 
goods from CFZ warehouses;
2.  Internal Trade Operation, consisting of sales to clients 
located within Panama's customs territory;
3.  Direct Sales, those made to foreign clients in which 
goods are shipped from the manufacturing sources without 
physically arriving in the CFZ territory; or,
4.  Transfer Operation, in which sales are made to other CFZ 
firms.

Companies operating from the CFZ enjoy numerous trade 
advantages along with special tax incentives such as tax 
credits, depending on the number of Panamanian employees, 
and special income tax rates on foreign trade operations.  
Companies in the free zone pay a maximum corporate income 
tax rate of 15.0 percent on income derived from export 
sales.  Dividends paid on profits from foreign trade 
operations and from direct sales are not subject to the 
dividend tax.  Merchandise arriving at, stored in, or 
leaving the CFZ destined for a foreign country is exempt 
from taxes, charges or any type of fee.  Also, CFZ companies 
are not subject to any type of federal or municipal tax.

Contact the CFZ Administration and the Users Association for 
more information.  (Refer to Section II of this report for 
key statistical information on the CFZ and to Appendix E for 
contact information).

Export Processing Zones

On November 30, 1992, Panama passed a Law No. 25 allowing 
for the establishment and development of Export Processing 
Zones (EPZ) within the country.

EPZs are well-defined areas for the establishment of 
industrial, commercial and service facilities which operate 
in a free trade system.  All its production is export-
oriented and a range of incentives has been created to 
attract companies into the EPZ.

Companies allowed to establish operations in EPZ are those 
engaged in: manufacturing, assembly (maquila), high 
technology, and specialized and general services, e.g. 
computer data entry, reinsurance.

The EPZ law defines two different parties associated with 
the zone.  The first is as developer of the EPZ. The second 
is as the tenant company located in the EPZ.

The GOP offers the developer the following tax incentives:

   Tax exemption during the life of the contract (the 
maximum is 20 years), from taxes, duties and other charges 
related to the importation of machinery, equipment, 
accessories and material used in the construction of the 
facilities.  Exempt from property and income taxes, and 
taxes on capital or assets for the first ten years of 
operation.  From the 11th year until the end of the 
contract, the developer is exempt from income tax on net 
earnings reinvested in the development and expansion of the 
EPZ, provided that the amount reinvested exceeds 20 percent 
of the net taxable income for the fiscal year the 
reinvestment is made.  Lastly, the developer may carry over 
losses from the year the loss takes place.

The tenant companies exporting from an EPZ are offered the 
following benefits: 

   Exempt from taxes, duties and other charges related to 
the importation of machinery, equipment, raw materials, 
semi-processed goods and other materials such as packaging, 
fuel and lubricants used in the manufacturing  process.  
Exemption from income tax on profits arising from exports, 
and exemption from export sales taxes, as well as from taxes 
on capital and assets of the export industry.

The EPZ law also includes specific labor and migratory 
provisions for employees of EPZ firms which are more 
favorable than the current Panamanian Labor Code.

Presently, there are four EPZs approved by the GOP.  Each is 
in various stages of development.  Contact the Panama Trade 
Development Institute (IPCE) for information on EPZs.  
(Refer to Appendix E for contact information on IPCE).

Petroleum Export Zones

The Government of Panama enacted Decree No. 29 (Executive 
Decree) dated July 14, 1992, allowing the creation of 
Petroleum Export Zones (PEZ) in specially-designated areas 
in Panama.

Decree No. 29 allows any foreign or national company to 
establish operations in a PEZ to produce, refine and export 
petroleum products.  It also permits direct sales to foreign 
vessels transiting the Panama Canal, and to foreign 
airlines.  Companies operating out of these PEZs are exempt 
of any municipal or federal taxes and are not subject to 
government regulations affecting the local market.

The Government of Panama has authorized the following four 
PEZ: Petroterminal de Panama (PTP, the transisthmian 
pipeline), Refineria Panama (TEXACO), Autoridad Portuaria 
Nacional (APN, the Port Authority), and Aeropuerto 
Internacional de Tocumen.  Contact the Ministry of Commerce 
and Industry, Direccion Nacional de Hidrocarburos for more 
information.  (Refer to Appendix E for contact information 
on the Ministry of Commerce and Industry).


SPECIAL IMPORT PROVISIONS

Special import permits are required for all types of 
firearms and ammunitions.  Import permits can be obtained 
from the Ministry of Government and Justice.  Also, certain 
agricultural and agroindustrial products are subject to 
import authorization by the Ministry of Agricultural 
Development (MIDA).  Examples are: wheat, flour, animal 
fats, vegetable and animal oils, soybean protein, and frozen 
corn.  (Refer to Appendix E for contact information on the 
Ministry of Agricultural Development).


MEMBERSHIP IN FREE TRADE ARRANGEMENTS

Panama is not a party to any agreements providing completely 
free trade, but does have bilateral preferential trade 
agreements with Costa Rica, El Salvador, Honduras, 
Guatemala, and Nicaragua; these accords are quota-based and 
deal with a limited number of specific products.  A more 
inclusive preferential agreement has been signed with 
Colombia.  There is also a limited preferential agreement 
with Mexico.  Negotiations are under way to sign a 
preferential agreement with Ecuador.

Panama is a beneficiary of the Caribbean Basin Economic 
Recovery Act, better known as the Caribbean Basin Initiative 
(CBI), which provides for one-way free trade access for 
specific Panamanian exports to the U.S.  Recently the U.S. 
government has been contemplating new legislation (e.g. the 
Crane-Gibbons bill) that would enhance the CBI program.  In 
return for NAFTA-like treatment for textiles and other 
miscellaneous items to the Caribbean Basin nations, the ITP 
would require from the Caribbean Basin Countries, on a 
bilateral basis, to make commitments mainly in the following 
areas:  bilateral investment treaties, intellectual property 
rights, workers rights, and the environment.  The interim 
Trade Program bill, the NAFTA Parity Resolution is still in 
committee in the House of Representatives and the Senate as 
of June, 1995.


VII.  INVESTMENT CLIMATE


OPENNESS TO FOREIGN INVESTMENT

On the one hand, taking its cue from Panama's central 
geographic location and its limited manufacturing and 
agricultural sectors, the Government of Panama and the 
business community actively promote this country's long-
standing reputation as an international trading, banking, 
and services center, and as a site for foreign direct 
investment (FDI).  Panamanian business persons and officials 
can point to Panama's dollar-based economy as offering low 
inflation and zero foreign exchange risk.  The Panamanian 
Trade Development Institute (IPCE) provides investors with 
information, expedites specific projects, leads investment-
seeking missions abroad, and supports foreign investment 
missions in Panama.

On the other hand, as the new Minister for Planning and 
Economic Policy has noted, no major foreign investment has 
been made in Panama for at least 10 years.  The Perez 
Balladares government which took office September 1, 1994, 
has embarked upon a vigorous campaign to improve Panama's 
international image (e.g., on money laundering) and its 
infrastructures to attract FDI.  A major test for the new 
government regarding its intention to improve Panama's 
attraction of FDI, will be how it employs the former 
military areas being reverted under the Canal treaties.  
Major properties will revert to Panamanian control in 
September 1995 and September 1996.  The largest U.S. bases 
are scheduled to revert to Panama between 1997 and 1999.

Government inattention to basic public infrastructure and 
public services, combined with slow progress on economic 
reforms that would establish clearer "rules of the game," 
undermine the generally welcoming stance toward foreign 
investment.  Cumbersome legal procedures sometimes delay 
resolution of contract and other business disputes.  Setting 
up shell corporations, however, is not cumbersome.

Colon Free Zone: Official support for investment and 
business activity is especially strong in the Colon Free 
Zone (CFZ).  There are special tax incentives to encourage 
investment in the CFZ and the international banking center.  
Companies in the free zone pay a maximum corporate income 
tax rate of 15.0 percent on income derived from export 
sales; income from purely offshore operations is not 
taxable; there are no taxes on the repatriation of profits 
or the payment of dividends.  Banks in Panama pay no tax on 
interest or other income earned outside Panama and withhold 
no tax on savings or fixed time deposits in Panama.  Several 
locations designated export processing zones (EPZ's) offer 
tax-free status and special immigration privileges, and 
license and customs exemptions to manufacturers who locate 
there.  (Refer to Section VI for more detailed information 
on CFZ).

Privatization: Panama has a program to privatize a number of 
state-owned enterprises. To date there has been 
privatization of the state cement company  and a state owned 
fruit company.  Partial privatization of the state telephone 
company is currently underway.  

Possible medium term privatizations may also occur in refuse 
collection services and some water utility operations.  The 
government is also open to private investment in cellular 
telephone and other high-tech telecom services.  Treatment 
of potential foreign investors in this process has been non-
discriminatory, at least on the surface.

Panama offers all investors (domestic and foreign) tax and 
other financial advantages if they invest in manufacturing 
ventures, export-oriented ventures, or tourism, or if they 
locate in certain regions of Panama.  These advantages 
include tax-exemption of export income, exemption from 
import duties and accelerated depreciation.  Many of these 
subsidies and special incentives are scheduled for 
elimination or modification by virtue of the GATT/WTO 
negotiations.  Investors require substantial legal and 
accounting advice to take advantage of these incentives.  
(Refer to Right to Private Ownership and Establishment in 
Section VII for more information).


POLITICAL VIOLENCE

Political violence in Panama, prevalent during the later 
Noriega years, decreased sharply after Operation Just Cause 
in 1989 and is now rare.  The 1994 national election, which 
international and domestic observers agree was the cleanest 
and fairest in three decades, was a model of the democratic 
political process.  Peaceful elections were followed by a 
calm and coordinated transition as the Endara administration 
stepped aside to let its political rival take over the reins 
of the government.  To date, the Perez Balladares government 
has chosen not to use its "gag law" authority to dampen the 
full and free expression of political ideas.  Street crime, 
which has remained high since Operation Just Cause owing to 
poverty and weak institutions, is on the rise again.  With 
the exception of restrained use of force against indigenous 
rights activists in April 1995, the police force monitored 
but did not interfere with anti-government demonstrations 
and strikes during the spring of 1995.  Organized crime 
score settling and narcotics-related violence are disturbing 
elements of the rising crime trend.  The overloaded and 
cumbersome criminal justice system has been unable to met 
out justice in the face of Panama's rising volume of crime.

In June 1994 a grenade was used to bomb the car of a 
prominent Jewish businessman.  No arrests have been made in 
this first-ever event in Panama.  In July 1994 a Panamanian 
domestic commuter aircraft traveling between Colon and 
Panama City exploded, killing 21 people, including three 
American citizens.  The attack remains under investigation 
by Panamanian and U.S. authorities.  The attack, which 
killed several well-known members of Panama's Jewish 
community, may have been the work of terrorists.  The 
alleged perpetrator, who was apparently carrying a bomb 
(knowingly or unknowingly) was on the plane when it 
exploded; no arrests have been made.  The two incidents 
prompted the government to tighten airport security and to 
promise increased police vigilance against terrorists and 
their alleged support networks.


CONVERSION AND TRANSFER POLICIES

Panama has no legal restrictions on transfer abroad of funds 
associated with, profits deriving from, or capital employed 
in an investment.  Panama uses the U.S. dollar as legal 
tender.  Currency conversion therefore is not an issue.  The 
Government of Panama has repeatedly emphasized its intention 
to retain the U.S. dollar as the national currency 
(denominated as the balboa); the U.S. Government has 
consistently supported Panama's use of the dollar.  There 
is, therefore, no independent monetary policy in Panama.  
Inflation, bound by the dollar, is relatively low and 
predictable, thus enhancing foreign investments.  


EXPROPRIATION AND COMPENSATION

Panama has no current cases of expropriation of property for 
public or any other use.  There are no policy shifts or 
other indications suggesting that expropriation in the near 
future is likely.  Although the Government of Panama did 
decide in 1993 not to sell publicly owned land (in Bocas del 
Toro Province) to U.S. investors, there are no large 
enterprises at special risk of expropriation.  Beyond the 
OPIC insurance prohibition discussed below (Section on OPIC 
Investment Insurance), the Government of Panama does not in 
general discriminate against U.S. or other foreign 
investors.  There is a constitutional prohibition against 
foreign land ownership within ten kilometers of a national 
border or on an island.  Neither Panamanian citizens nor 
foreigners may own beaches or the shores of rivers or lakes.  
Builders and investors generally rent the land for 20-30 
years, via the Ministry of Finance.  The new tourism 
incentives law expands this period for up to 40 years.


DISPUTE SETTLEMENT

Disputes with foreign investors are rare.  Where they have 
occurred, they have involved special circumstances not 
likely to be repeated.  Most notable business complaints 
have involved individuals who have not fully pursued 
remedies available to them via the court system.

Panama has a court and judicial system, like many Latin 
American countries, built around a civil code, rather than 
the Anglo-American system of reliance upon case law and 
judicial precedent.  Fundamental procedural rights in civil 
cases are broadly similar to those available in U.S. civil 
courts, although some notice and discovery rights, 
particularly in administrative matters, may be less 
extensive than in the U.S.; judicial pleadings are not 
always a matter of public record.  Business, corporate, and 
banking laws are relatively modern and sophisticated and in 
general are enforced so as to create a favorable business 
climate, although there is no modern bankruptcy law.  
Mortgages, liens, and other security interests are 
recognized.  There is a public property registry, now 
undergoing expansion and modernization.  The judiciary is 
independent, in law and practice, of the executive branch of 
government.  Unique features of Panamanian law and practice 
in specific areas (including but not limited to banking, 
accounting requirements, formation and functioning of 
corporations, and taxation) make retention of local legal 
counsel advisable in many cases.

In its bilateral investment treaty with the United States, 
Panama recognizes the "additional facility" of the 
International Center for the Settlement of Investment 
Disputes (ICSID) as a potential means of resolving disputes 
with foreign investors, outside of Panamanian courts.


PERFORMANCE REQUIREMENTS/INCENTIVES

There are no performance requirements such as minimum export 
percentages or significant local procurement rules.  There 
are special tax and other incentives for manufacturers to 
locate in an Export Processing Zone (EPZ), the only active 
one of which currently is at Isla Margarita, outside Colon 
(notional but inactive EPZ's exist at Ojo de Agua and 
Telepuerto).  (Refer to Section VI - Export Processing Zones 
for detailed information.)  Tax incentives are available to 
manufacturers, wherever located in Panama, who produce 
wholly or partially for export, in proportion to the 
percentage of product exported.  There may, as a matter of 
administrative practice, be an official preference for local 
procurement of certain types of business insurance.

Several tourism incentives laws provide, among other 
measures, tax exemptions for vehicles and other designated 
goods imported for use in, or to construct infrastructure 
for, the tourist sector.  Tax incentives are still available 
to small businesses (less than 10 employees) and to certain 
types of agricultural production and investment, especially 
where production is for export.


RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT

With the exception of retail trade and certain professions, 
foreign and domestic entities have the right to establish, 
own, and dispose of business interests in virtually all 
forms of remunerative enterprise.  Foreigners need not be 
legally resident or physically present in Panama to 
establish corporations or to obtain local operating licenses 
for a foreign corporation.  Business visas (and even 
Panamanian passports) are readily obtainable for significant 
investors.  Banking, legal and financial services and the 
legal regime are strongly oriented toward attracting foreign 
business and banking activity.

Panama's privatization framework law does not distinguish 
between foreign and domestic investor participation in 
prospective privatizations.  The law calls for pre-screening 
of potential investors or bidders in certain cases to 
establish technical viability, but nationality and 
Panamanian participation are not criteria.  Foreigners have 
participated actively in all privatization to date.

Privatization (in whole or in part) of state-owned entities 
such as the National Power and Light Company (IRHE), and the 
National Water Company (IDAAN) will require separate laws; 
in February 1995 the Legislative Assembly passed separate 
pieces of legislation allowing the partial privatization of 
the national telephone company (INTEL) (with private 
ownership limited to 49 percent) and revoking the monopoly 
of electricity generation held by the state electricity 
utility (IRHE).  Privatization of these high-visibility, 
politically sensitive enterprises has been debated 
vigorously.  There are likely to be limits on foreign 
investor participation if indeed the remaining core 
utilities are ever privatized. (Refer to the Privatization 
portion in this Section for more information).


PROTECTION OF PROPERTY RIGHTS

Intellectual Property Rights

Panama is a member of the World Intellectual Property    
Organization   (WIPO),  the   Geneva Phonograms Convention, 
the Brussels Satellite Convention, and the Universal 
Copyright Convention.  Although Panama is not a member of 
the Bern Convention for the protection of Literary and 
Artistic Works or the Paris Convention for the Protection of 
Industrial Property, the Government of Panama has submitted 
to its Legislative Assembly a bill for Panama to accede to 
the Paris Convention; accession to the Bern and Paris 
Conventions will be necessary if Panama is to join GATT/WTO.

In general, protection for intellectual property rights in 
Panama has in the past been less than adequate in several 
areas.  Panama's adherence to other major international 
conventions on intellectual property rights would offer more 
protection to foreign rights-holders than is available under 
current Panamanian law.  The U.S.-Panama Bilateral 
Investment Treaty, negotiated in 1983 but not put into 
effect until 1992, does not contain an intellectual property 
annex.  In the past, representatives of some U.S. industrial 
sectors have alleged Panama provides inadequate copyright 
and trademark protection.

The National Assembly in August 1994 passed a bill to help 
modernize copyright protection.  Implementing regulations 
for the new copyright law, which took effect January 1, 
1995, are still pending.  The Government of Panama is 
expected to introduce a draft bill to the National Assembly 
in September 1995 to strengthen industrial property 
protection (patents, trademarks, and trade secrets). The 
Government of Panama has stated its intention to improve 
customs controls and enforcement of existing law in the 
Colon Free Zone, where copyright and trademark infringing 
activity have been heaviest.  Some U.S. intellectual 
property owners have experienced significant delays when 
they have sought infringement remedies in the Panamanian 
judicial system.

Patents

The current Panamanian draft law on industrial property is 
modeled after Mexico's new, world-class industrial property 
law.  The Panamanian draft law would provide 20 years of 
patent protection in place of the current period of 5 to 15 
years for foreigners and 5 to 20 years for Panamanians.  The 
bill would grant patent protection from the date of filing.  
Pharmaceutical patents would be granted for only 15 years, 
but could be renewed for an additional ten years, if the 
patent owner licensed a national company (minimum of 30 
percent Panamanian ownership) to exploit the patent.  Other 
important aspects of the current draft law are undergoing 
review by the government of Panama in light of GATT (chapter 
on Trade-Related Aspects of Intellectual Property, or TRIPS) 
standards.  The bill also provides for protection of 
trademarks, simplifying the process of registering 
trademarks and making them renewable for ten-year periods.

Although complaints of inadequate intellectual property laws 
and enforcement have not focused on them, trade secrets 
currently have little formal protection.  The draft 
industrial property law, however, would provide specific 
protection for trade secrets.

Copyrights

The National Assembly in 1994 passed a comprehensive 
copyright bill, based on a World Intellectual Property 
Organization model.  The law modernizes copyright protection 
in Panama, provides for payment of royalties, facilitates 
the prosecution of copyright violators, protects computer 
software, and makes copyright infringement a felony.  There 
is widespread support for the improvement of copyright 
protection in Panama, although some powerful domestic 
interests opposed the new law. Even with the new law, 
however, key implementation issues remain before copyright 
owners will be assured of a modern, completely investment-
friendly copyright regime.  Necessary elements of such a 
regime would include effective enforcement by government 
authorities of the new statute, as well as the ability of 
Panama's judicial system to provide speedy and effective 
remedies for private civil litigants under the law.  
Panama's current copyright registration and patent and 
trademark registration capabilities need to be upgraded in 
any case.


REGULATORY SYSTEM

Transparency

Government regulation and occasional intervention in the 
Panamanian economy have tended to reduce transparency, 
hinder competition and the efficient allocation of 
investment.  The government's economic liberalization 
program is designed to reduce these distortions and increase 
competition and competitiveness.

Pending final conclusion of an agreement for Panama's 
GATT/WTO accession, Government-administered price controls 
remain on a number of agricultural products, such as feed 
grains and poultry, and on a mix of designated food items 
and other staples (the basic shopping basket, or "canasta 
basica").  High nominal tariff protection, and high 
effective protection (non-tariff barriers) keep some product 
prices artificially high for now and discourage the 
development of efficient export-oriented firms.  Incident to 
Panama's pending application to join GATT, Panama's tariff 
structure is being adjusted, and non-tariff barriers are 
being tariffized.

Factors Affecting Investment

Overregulation of hiring and firing practices reduces labor 
mobility and flexibility.  Public enterprises provide high-
cost public services, with no more than partial 
privatization likely in the near future.  The National Labor 
Code ranks with the most pro-labor in the world.  The 
combination of relatively high costs for both utilities and 
labor makes unit costs higher than average for the region.

Although the Panamanian constitution forbids certain kinds 
of monopolistic behavior, Panama has no modern competition 
or anti-trust laws, policy, or regulatory authority now in 
place.  As a result of the GATT/WTO negotiations now 
underway, the Government of Panama has prepared draft 
legislation to establish a competition policy and 
enforcement authority, along with a consumer protection 
regime.  Passage is contingent on the outcome and timing of 
Panama's GATT/WTO negotiations.  Oligopolistic distortions 
in many domestic markets are for now unchecked, and 
contribute to continuing support for food price controls.  
Consumers have few rights under current law, although the 
Ministry of Commerce and Industry has the authority to 
enforce the very limited consumer protection laws which do 
exist.  An accommodating bankruptcy law to facilitate the 
restructuring of firms, such as Chapter 11 in the U.S., does 
not exist in Panama.

Panama's banking sector is regulated by the National Banking 
Commission (CBN), which coordinates government policy with 
bank executives represented by the National Banking 
Association (ABP).  The continued success and vigorous 
growth of the banking sector is directly attributable to the 
very business and depositor-oriented laws, passed in the 
1970's, which govern this sector.  In April 1993, a law was 
passed creating tax incentives for the creation of voluntary 
pension funds (IRA's) by individuals or corporations.

The tax system promotes savings and investment by giving a 
wide variety of incentives and maintaining rates which are 
comparable to those in the U.S.  The maximum personal income 
tax rate is 30 percent and the maximum corporate rate is 34 
percent of domestically produced earnings. Other formal 
legal, regulatory, and accounting systems are relatively 
transparent, but their enforcement is diminished somewhat by 
certain non-transparent aspects of legal practice and the 
judicial process.  Although tax collection methods have been 
strengthened in 1994 and 1995, the overall regulatory and 
supervisory framework is weak.


CAPITAL MARKETS AND PORTFOLIO INVESTMENT

Stock  market  financing is  limited  due  to the small size 
of the national stock exchange, and the limited liquidity 
which is therefore available.  Bank and non-bank financing 
is available on market terms to private domestic and foreign 
investors.  Panamanian interest rates closely follow 
international rates (i.e., the London Interbank Offered Rate 
- LIBOR), plus a country-risk premium.

Traditional bank lending from the well-developed banking 
sector is relatively efficient and is the most common source 
of financing.  Some private companies -- including foreign 
multinational corporations -- have issued bonds on the 
fledgling local securities market.  Companies rarely issue 
stock on the local market.  When they do, investor demand is 
limited because there is a 10 percent withholding tax on 
dividends, although company earnings on the exchange are tax 
exempt (Fixed bank deposits and certain bonds are tax-
exempt.).  A bill currently pending before the National 
Assembly would allow the creation of and trading by mutual 
funds on the Panama Stock Exchange.  

The private sector does have access to a variety of credit 
instruments.  International accounting norms apply.  Cross-
shareholding or stable shareholder arrangements, designed to 
restrict foreign investment through mergers and 
acquisitions, do not exist.  There are no restrictions on or 
customary measures to prevent hostile foreign investor 
takeovers, nor are there regulatory provisions authorizing 
limitations on foreign participation or control, or other 
practices to restrict foreign participation.  The 
constitutional prohibition on foreign ownership of retail 
enterprises is discussed above.  There are no government or 
private sector rules to prevent foreign participation in 
industry standards-setting consortia, such as ISO-9000. 


BILATERAL INVESTMENT AGREEMENTS

Panama has bilateral investment agreements with the United 
States, the United Kingdom, France, Switzerland, Germany and 
Taiwan.  Panama is not a party to any agreements providing 
for completely free trade, but does have bilateral 
preferential trade agreements with Costa Rica, El Salvador, 
Honduras, Guatemala, and Nicaragua; these accords are quota-
based and deal with a limited number of specific products.  
A more inclusive preferential agreement was recently 
concluded with Colombia.


OPIC INVESTMENT INSURANCE PROGRAM

OPIC is supporting several U.S. investments in Panama.  In 
general, modest expansion of OPIC programs is possible.   
Panama has not yet eliminated its requirement that 
Panamanian Government approval be obtained for any OPIC-
insured investment in Panama.  President Endara vetoed a 
bill which would have eliminated this investment barrier in 
June 1994.  Panama thus retains a  major bureaucratic burden 
on investment here, complicating what remains a largely 
favorable national investment climate.  Panama has 
approached the World Bank to join its Multilateral 
Investment Guarantee Agency (MIGA), which provides 
investment guarantees similar to OPIC, but has been unable 
to join to date due to budgetary limitations; a government 
proposal to fund MIGA membership is pending.


LABOR CODE

The Government of Panama is in the process of revising its 
labor code, which has heretofore been highly pro-labor 
union.  New proposals would create more flexibility in the 
labor market, making termination of workers easier and less 
costly.  Greater labor flexibility on the shop floor also 
would be included in the proposed revisions, along with 
lifting many constraints on productivity-based pay.  A 
revised code is expected to be enacted into law by mid-to-
late summer, 1995.

Even with the proposed changes, the Government would still 
play a major role in the labor market and the Panamanian 
minimum wage will remain the highest in the region.  (Refer 
to Section III for information on the Labor Force.)


FOREIGN DIRECT INVESTMENT

Tables in Appendix D provide data on the value of foreign 
direct investment (FDI) in Panama for the years 1980 - 1992 
(preliminary for 1992), FDI by country of origin for 1992, 
and FDI by industry sector destination for 1979 and 1992.  
The sources are the office of the Comptroller-General and 
the IMF.  There are no comparable data on Panama's direct 
investment abroad.

MAJOR FOREIGN INVESTORS

- Adrian Resources
- American Airlines
- American Hospital Supply Co.
- American Life Insurance Co.
- AOKI Corporation
- AT&T
- Banco Do Brasil
- Banco Exterior, S.A.
- Becton Dickinson & Co.
- Black and Decker International Corp.
- Borden Co.
- Braswell Service Group
- Bristol Laboratories International Corp.
- Challenge Air Cargo
- Chase Manhattan Bank, N.A.
- Cheesebrough Pond's Int. Ltd.
- Chiriqui Land Company (Chiquita)
- Chevron Corp.
- Citibank, N.A.
- Coca-Cola Bottling Co.
- Colgate Palmolive (Central America), Inc.
- Cyprus Minerals Co.
- Del Monte Corporation
- Dole Foods Co.
- Eastman Kodak Company
- Environmental System Research Institute
- Exxon Corp.
- Esso Standard Oil, S.A.
- First National Bank of Boston
- Freeport Exploration Co.
- General Mills Inc.
- Georgia Pacific Corp.
- Glidden - Durkee

- Greenstone Resources
- Griffith Laboratories, Inc.
- Grupo Carvajal
- Goldstar Corp.
- GTE
- Hong Kong Shangai Bank
- Hospital Corporation of America
- IBM
- International Proteins Corp.
- Jenny Manufacturing, Inc.
- Johnson and Johnson
- Kendall Company
- Ketchum Public Relations
- Kimberly-Clark International, S.A.
- Kraft Foods, Inc.
- Lanier Worldwide, Inc.
- Lykes Line
- Marine Midland Bank
- McDonald's Corporation
- Merrill Lynch, Pierce, Fenner & Smith Int'l
- Minnesota, Mining & Manufacturing 
- Nabisco Brands Inc.
- Nestle Company
- Northville Industries Corp.
- Otis Elevator Company
- Chas. Pfizer & Company, Inc.
- Panasonic Latin America
- Phelps Dodge Corp.
- Phillip Morris, Inc.
- PYCSA, S.A.
- Revlon Inc.
- Rubbermaid Inc.
- Samsung Electronics
- Schering Corp. International
- Seaboard Marine Ltd.
- Sherwin Williams
- The Gillette Co.
- Shell Co. (WI) Ltd.
- Sony Corporation
- Sterling Drugs International
- Swift and Company
- Swiss Bank
- Syntex Corporation
- Technoserve Inc.
- Texaco Inc.
- TRT Telecommunications Corp. 
- Twentieth Century Fox
- United Brands
- United Parcel Service
- UNYSIS USA
- Warner Lambert Co.
- Xerox Corp.


VIII.  TRADE AND PROJECT FINANCING


BANKING AND FINANCING

Panama's banking sector is one of the most dynamic areas of 
the economy (Panama's 108 banks registered total deposits in 
1994 of US$ 26 billion, and US$ 32.8 billion in total 
assets, a 25.8 percent increase from 1993).  Panama opened 
its banking sector to foreign competition in 1971 under 
legislation with places high priority on banker-depositor 
confidentiality.  This has permitted the banking system to 
be exploited by drug money launderers.  The banking 
legislation distinguishes between General license banks, 
which operate full service operations in Panama competing 
for domestic deposits and loans, and International License 
or "Offshore" banks, which only accept deposits from persons 
or organizations located overseas.  Foreign and Panamanian 
banks compete on equal terms.  Banks are organized into two 
representative organizations, the Panamanian Banking 
Association (ABP) and the Association of Panamanian Banks 
(APB).  Banks are licensed and regulated by the National 
Banking Commission (CBN), a relatively weak, semi-autonomous 
regulatory/oversight body whose oversight board includes 
private bankers.  Panamanian banks dedicate a significant 
portion of their loan portfolio to finance commerce, 
including imports.


FOREIGN EXCHANGE CONTROLS

Trading is unaffected by foreign exchange controls, since 
the U.S. dollar is used as the national currency and there 
are no restrictions on capital flows in or out of the 
country.  There is therefore, no foreign exchange risk.


GENERAL FINANCING AVAILABILITY 

In mid-1995 the banking sector had a high level of 
liquidity.  Private financing is readily available.  The 
Government of Panama does not maintain statistics on the 
sources or level of privately-financed investment or trade 
and is not itself an important lender.


HOW TO FINANCE EXPORTS/METHODS OF PAYMENT

A number of local banks provide financing for exports.  
Additionally, the Latin American Export Bank (BLADEX) 
provides export financing through the local banking system.  
Being an international banking center there are a number of 
financing options for Panamanian exporters/importers.


TYPES OF AVAILABLE EXPORT FINANCING AND INSURANCE

The Overseas Private Investment Corporation (OPIC), the U.S. 
Export-Import Bank (EXIM), the International Finance 
Corporation(IFC) of the World Bank, and the Inter-American 
Development Bank (IDB) have a number of projects in Panama. 
OPIC in recent years has provided insurance or financing for 
over 30 projects in Panama, 10 of which are still current 
and provide insurance for ventures in manufacturing, 
agriculture, and infrastructure (totalling some US$ 7 
million).  Currently there are no projects in Panama large 
enough to require multi-institutional "bundling" 
arrangements.  The Commodity Credit Corporation's (CCC) GSM 
Credit Guarantee program in Panama for fiscal year 1995 
totalled US$ 20 million for exports of U.S. rice, 
feedgrains, protein meals, wheat, solid wood products and 
barley malt.  Credit from any bank in Panama approved by CCC 
will be guaranteed.  Significant lines of commodity credit 
guarantees were still available at the time of this writing.


PROJECT FINANCING AVAILABLE

Exim in 1993 participated in the financing of the Government 
of Panama's purchase of a Westinghouse aviation radar 
system, and currently is providing financing in excess of 
US$ 121 million in insurance and guarantees (short, medium 
and long-term) in a number of sectors in Panama.  The Inter-
American Development Bank has several major current 
projects, including the financing of a study for GOP 
development of the U.S. military bases reverting to 
Panamanian control under the Panama Canal Treaties, between 
1994 and 1999.  The World Bank (IBRD) has a number of small 
social-sector-oriented projects, and is currently 
cofinancing with IDB and the Government of Panama a USD 406 
million road construction and rehabilitation project.  
Release of further tranches of the  IBRD's economic recovery 
loan for Panama is dependent upon significant  improvements 
in the government's economic liberalization and 
privatization program.  As noted above, Panama has held 
discussions with IBRD about membership in MIGA, but has no 
application to join at present.  The Perez Balladares 
government has pursued financing from the IFI's for a number 
of new infrastructure and social sector investment projects 
(see also Section II, Infrastructure Situation).


LIST OF PANAMANIAN BANKS WITH CORRESPONDENT U.S. BANKS

Banco Comercial de Panama, S.A. (BANCOMER)
P.O. Box 7659
Panama 5, Republic of Panama
Tel:  (507) 63-6800
Fax:  (507) 63-8033
General Manager: Emanuel Gonzalez-Revilla

     U.S. Correspondents:
     Citibank N.A., New York
     The Bank of New York, New York
     The Chase Manhattan Bank, N.A., New York
     Marine Midland Bank, N.A., New York
     Barnett Bank of South Florida, N.A., Miami

Banco Continental de Panama, S.A.
P.O. Box 135
Panama, 9A, Republic of Panama
Tel:  (507) 63-5955
Fax:  (507) 64-3359
General Manager: Paul Smith

     U.S. Correspondents:
     Chemical Bank, New York
     Citibank, New York and Miami
     Credit Suisse, Miami
     Nations Bank, Miami
     Standard Chartered Bank PLC, Miami

Banco de Latinoamerica, S.A. (BANCOLAT)
P.O. Box 4401
Panama 5, Republic of Panama
Tel:  (507) 64-0466
Fax:  (507) 63-7368
General Manager: Ramon Gilberto Perez

     U.S. Correspondents:
     Banco Atlantico, New York
     The Chase Manhattan Bank, New York
     Extebank, New York
     AmTrade Bank International, Miami
     Barclays Bank PLC, Miami
     Capital Bank N.A., Miami
     Hamilton Bank N.A., Miami
     The International Bank of Miami, Miami
     Republic National Bank of Miami, Miami
     Popular Bank of Florida, Miami

Banco del Istmo, S.A.
P.O. Box 6-3823, El Dorado
Panama, Republic of Panama
Tel:  (507) 69-5555
Fax:  (507) 69-5168
General Manager: J. Montague Belanger

     U.S. Correspondents:
     Capital Bank, Miami
     Nations Bank, Miami
     Standard Chartered Bank, Miami
     Banco Atlantico, Miami
     Barclays Bank PLC, Miami
     The Chase Manhattan Bank N.A., New York
     Brown Brothers Hamman & Co., New York

Banco del Pacifico, S.A.
P.O. Box 6-3100, El Dorado
Panama, Republic of Panama
Tel:  (507) 63-5833
Fax:  (507) 63-7481
Operations Manager: Luis E. Hernandez

     U.S. Correspondent:
     First Chicago International Bank, New York

Banco Disa, S.A.
P.O. Box 7201
Panama 1, Republic of Panama
Tel:  (507) 63-5933
Fax:  (507) 64-1084
Manager: Rafael Endara J.

     U.S. Correspondents:
     The Chase Manhattan Bank N.A., New York and Miami
     Marine Midland Bank, New York
     Nations Bank International, New York
     Dadeland Bank, Miami
     National Westminister USA International, Miami

Banco General, S.A.
P.O. Box 4592
Panama 5, Republic of Panama
Tel:  (507) 27-3200
Fax:  (507) 27-3427
General Manager: Raul Aleman Z.

     U.S. Correspondents:
     Citibank N.A., New York
     The Chase Manhattan Bank N.A., New York
     Marine Midland Bank, New York
     Bank of America N.T. & S.A., San Francisco
     Nations Bank, Atlanta
     Dadeland National Bank, Miami
     First Union Bank, Miami

Banco Internacional de Costa Rica, S.A. (BICSA)
P.O. Box 600
Panama 1, Republic of Panama
Tel:  (507) 63-6822
Fax:  (507) 63-6393
General Manager: Jose Francisco Ulate

     U.S. Correspondents:
     Citibank N.A., New York
     BankAmerica International, New York
     Banco Atlantico, New York
     The Bank of New York, New York

Banco Internacional de Panama, S.A. (BIPAN)
P.O. Box 11181
Panama 6, Republic of Panama
Tel:  (507) 63-9000
Fax:  (507) 63-9514
General Manager: Rene A. Diaz A.

     U.S. Correspondents:
     Nations Bank International, Miami
     Barclays Bank, Miami
     Banco Internacional de Costa Rica, Miami

Banco Latinoamericano de Exportaciones, S.A. (BLADEX)
P.O. Box 6-1497, El Dorado
Panama, Republic of Panama
Tel:  (507) 63-6766
Fax:  (507) 69-6333
Chief Executive Officer: Jose Castaneda

     U.S. Correspondents:
     The Chase Manhattan Bank N.A., New York
     Citibank N.A., New York
     Credit Lyonnais, New York
     Swiss Bank Corporation, New York
     Barclays Bank PLC, Miami

Banco Panamericano, S.A. (PANABANK)
P.O. Box 1828
Panama 1, Panama
Tel:  (507) 62-0881
Fax:  (507) 69-1537
VP of Operations: Ruth B. de Arauz

     U.S. Correspondents:
     American Express Bank, New York
     Marine Midland Bank, New York
     Hong Kong and Shanghai Bank, New York
     Popular Bank of Florida, Miami
     Hamilton Bank N.A., Miami
     Barclays Bank PLC, Miami
     Nations Bank International, Miami

Note: This list is intended to be representative and not 
complete.  Further detailed information on these banks and 
other banks in Panama can be located in the Polk Register or 
by contacting the Asociacion Bancaria de Panama (Panamanian 
Bank Association), P.O. Box 4554, Panama 5, Republic of 
Panama; Tel: (507) 63-7044, Fax: (507) 23-7630 or 63-7783.

(Refer to Appendix E for the three U.S. Banks with 
operations in Panama).


IX.  BUSINESS TRAVEL

Foreign visitors should use the same precautions while 
traveling in Panama as in any metropolitan U.S. city.


BUSINESS CUSTOMS

Business practices and customs in Panama are a unique blend 
of North American methods and traditional Latin style. The 
large number of international banks that operate in Panama 
also bring their business practices and customs, which are 
emulated and assimilated by Panamanian businesspersons.  
Foreign corporations operating in Panama are important 
forces in shaping the style and manner of doing business.

Most private business offices are open from 8:00 a.m. until 
5:00 p.m., Monday through Friday, and Saturdays from 8:00 
a.m. to 12 noon.  Banks are open from 8:00 a.m. to 1:00 
p.m., Monday through Friday.  Most government offices are 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday.


TRAVEL ADVISORY AND VISAS

U.S. Citizens are subject to the laws of the country in 
which they are traveling.  Penalties in Panama for 
possession, use and trafficking in illegal drugs are strict.

Electronic Bulletin Board: In 1987, the State Department's 
Bureau of Consular Affairs established the Consular Affairs 
Bulletin Board or (CABB), as a means to keep the 
international business community informed about security or 
crime problems abroad.  Access to the CABB is free of charge 
to anyone with a computer and a modem.  Callers dial 
202-647-9225 from their modem.  Both Consular Affairs and 
the Bureau of Diplomatic Security update the CABB daily.

Also, the Travel Advisory Service of the Department of State 
can provide information in verbal and fax form for any 
travel warnings on traveling to foreign countries.  For 
verbal information contact tel: (202)647-5225.  To receive a 
facsimile, the interested traveller can call (202)647-3000.

U.S. citizens may enter Panama with a passport or a 
certified copy of a U.S. birth certificate and an official 
picture I.D., (e.g. driver's license) and a Tourist Card 
purchased for US$ 5.00 from an airline serving Panama.  The 
Tourist Card is valid for 30 days and may be extended for 
two more 30-day periods.  The following are three types of 
Visas available to businesspersons wishing to spend extended 
periods of time in Panama:

1.  Inversionista (Investor): A minimum of US$ 50,000 must 
be invested and US$ 600 must be deposited in advance (US$ 
500 with the Ministry of Government and Justice and US$ 100 
with the Ministry of Treasury).  

2.  Visa de Visitante Temporal (Temporary Visitor's Visa): 
For executives or technicians working with a company in 
Panama for a limited time.  The Visa is valid for one year 
and is renewable.

3.  Temporal Especial (Working Permit): For professional or 
skilled personnel transferred from an overseas office to 
work in Panama.  The applicant must prove his earnings will 
come from outside of Panama.  The Visa is valid for one year 
and is renewable.

Further information can be obtained from the Consular 
Section of the U.S. Embassy in Panama, Unit 0945, APO AA 
34002, Tel: (507) 227-1777, Fax: (507) 227-0239. 


HOLIDAYS

All private, government, municipal and U.S. Embassy offices 
are closed during holidays.  In addition the U.S. Mission 
observes all U.S. holidays.

The national holidays for 1996 are:

January   1    New Year's Day
January   9    Mourning Day
February  20   Carnival
April     15   Good Friday
May       1    Labor Day
November  3    Independence
               Day from
               Colombia
November  4    Flag Day
November  10   The Uprising of
               Los Santos
November  28   Independence
               Day from Spain
December   8   Mother's Day
December  25   Christmas Day

There is a large number of Jewish establishments, which 
observe all Jewish holidays. 


BUSINESS INFRASTRUCTURE

Panama's official language is Spanish.  However, English is 
widely  spoken as a second language in the main cities.  
Panama has excellent local and international telephone 
services.  Direct dialing is available to more than 150 
countries worldwide with fast, high density telephone 
communications systems. Other forms of communications 
include 170 radio stations and 27 television channels, five 
of which transmit locally.

Health conditions in Panama are good, especially in the 
urban centers.  Running water is available in almost all 
parts of the country.  Some rural areas and small towns in 
the provinces may require boiling water before drinking.

There are several hotels that maintain international 
standards and facilities.  Facilities usually include: 
swimming pools, tennis courts, fitness centers, clothing and 
souvenir shops, casino, restaurants, coffee shops and bars.  
Furnished apartments are available for longer stays.  A wide 
variety of restaurants offer international cuisine, such as: 
Chinese, Italian, Mexican, Spanish and Japanese.  Several 
specialize in seafood.  All large hotels offer American, 
European, and local cuisine.  There are some hotel coffee 
shops that are open around the clock.

Transportation from the International Airport into Panama 
City is by a special taxi service, and the price ranges from 
as low as US$ 12 per trip for small taxis to US$ 20 for the 
large taxis.  There is no bus service to and from the 
international airport; however, taxis may be shared with 
other passengers.  Car rental companies are also available.

Transportation services within the city are readily 
available by bus or taxi.  Taxi fares are low and may range 
from one to five dollars depending on the trip's length.

The official currency of Panama is the Balboa (symbol B/.) 
which is on par with the U.S. Dollar.  The Balboa exists 
only in coin form of the same denomination and size as U.S. 
coins.  Both U.S. dollar bills and coinage are used for all 
tenders. 

Both the U.S. system of weights and measures and the metric 
system are used in Panama.  Speed limits are posted in miles 
per hour in some places, kilometers per hour in other places 
and some signs have both miles and kilometers per hour 
limits given.



       APPENDIX A
       COUNTRY DATA


Population:               2.58 Million
Population Growth Rate:   1.8 Percent
Religion:                 Predominantly Roman Catholic, 
                          complete religious freedom
Government:               Constitutional Democracy
Language:                 Spanish, English widely spoken
Work Week:                Monday - Friday



        APPENDIX  B
        DOMESTIC ECONOMY
(millions of U.S. Dollars, except as noted)


                  1992     1993    1994    1995   1996
                                  (preli.) (esti.) (proj.)


GDP (current prices)
                  6,001.1  6,561.9  6,958.0  7,222.4  7504
Real GDP Growth Rate
                     8.6%     5.9%     4.7%     2.3%  2.4%
GDP  (1970 dollars)
                  2,214.1  2,345.1  2,441.9    2,498 2,558
GDP per Capita (U.S. Dollars)
                    2,412    2,588    2,697    2,750 2,807
Govt. Spending (as a % of GDP)
                    30.7%    28.0%    22.6%    25.8%   24%
Inflation (%)        1.8%     0.5%     1.3%     1.5%  1.5%
Unemployment (%)    13.1%    12.5%    13.8%    14.5%   15%
Foreign Exchange Reserves*
                    504.4    597.4    704.3    753.5 700**
Average Exchange Rate
 Balboas to U.S. Dollars      1.00     1.00     1.00  1.00
                              1.00
Foreign Debt      5,204.0           5,313.4        5,513.0
                                      5,933         5300**
Debt Service Ratio   28.7%   13.8%    12.8%    18%     18%
 (ratio of principal and interest
 payments on foreign debt to
 foreign income)
U.S. Economic  Assistance   187.0   45.0   4.4   3.0   6.3
U.S. Military Assistance      0.0    0.0   0.0   0.0   0.0



Sources:  Government of Panama, U.S. Embassy projections

*  Corresponds to foreign assets of the National Bank of 
Panama
** Assumes successful closure of Panama's debt reduction 
"("Brady") agreement      with its foreign commercial bank 
creditors, to take effect by February    1996.



      APPENDIX C
      TRADE
      (millions of U.S. Dollars, except as noted)

            1992      1993      1994      1995      1996
                             (prelim.)  (estim.)   (proj.)

Total Country Exports   474.2   507.6   532.5   540    570
Total Country Imports         1,825.5 1,979.6      2,202.6
                                        2,345        2,512
U.S. Exports*    1,150.0      1,298.9   276.3 1,315  1,354
U.S. Imports*      343.0        360.0   354.3   380    386
U.S. Share of Panama
Imports              57%          66%     58%   56%    54%


*  Includes Exports to the Colon Free Zone
Sources:  Panama Comptroller General's Office, U.S. National 
Trade Data Bank, Embassy Projections


      APPENDIX D
      INVESTMENTS STATISTICS


FOREIGN DIRECT INVESTMENT IN PANAMA STOCK AND FLOWS: 1980 - 
1993
(IN US$ MILLIONS AND AS PERCENT OF GDP)


     (A)    (B)    (C)    (A)/    (B)/
Year   Stock   Flow   GDP   (C)    (C)

1980  386  -47   3,559   10.8%   -1.3%
1981  395    6   3,878   10.2%    0.2%
1982  429    3   4,279   10.0%    0.1%
1983  471   72   4,374   10.8%    1.6%
1984  490   10   4,566   10.7%    0.2%
1985  533   59   4,901   10.9%    1.2%
1986  491  -62   5,145    9.5%   -1.2%
1987  534   57   5,310   10.1%    1.1%
1988  501  -52   4,551   11.0%   -1.1%
1989  519   36   4,582   11.3%    0.8%
1990  492  -30   5,009    9.8%   -0.6%
1991  454  -62   5,476    8.3%   -1.1%
1992  469    2   6,001    7.8%    0.0%
1993* 432  -37   6,562    6.6%   -0.6%

* 1993 figures were being revised by GOP at publication.


FOREIGN DIRECT INVESTMENT IN PANAMA BY COUNTRY OF ORIGIN 
1993*


      US$   PERCENT
      MILLIONS   OF TOTAL


TOTAL   432    100%

United States   321   74%
Costa Rica       24    6%
United Kingdom   17    4%
Japan            16    4%
Other            54   13%

* 1993 figures were being revised by GOP at publication.


FOREIGN DIRECT INVESTMENT IN PANAMA BY SECTOR: 1979 AND 1992
1979 1993*


      U$    PERCENT
      MILLIONS   OF TOTAL


TOTAL        342   100%     432   100%
Agriculture/Forestry/
Fishing       55  16.1%      36   8.3%
Manufacturing       175   51.2%    188   43.5%
Commerce      67  19.6%      74  17.1%
Transport/Storage/
Communication         8    2.3%     52   12.0%
Finance/Real
Estate        36  10.5%      60  13.9%
Services       1   0.3%      10   2.3%
Other          0   0.0%      12   2.8%

* 1993 figures were being revised by GOP at publication.


        APPENDIX E
        U.S. AND COUNTRY CONTACTS


U.S. EMBASSY TRADE RELATED CONTACTS

U.S. Embassy Mailing Address in the U.S.:
Unit 0945
APO AA 34002
Tel:  (507) 227-1777
Fax:  (507) 227-1964

The Commercial Service
Senior Commercial Officer, Americo Tadeu
Senior Trade Specialist, J. Enrique Tellez
Commercial Assistant, Jilma A. de Robles
Commercial Secretary, Diana Lozano 
Commercial Clerk, Jeane A. de Zuñiga
Tel:  (507) 227-1777
Fax:  (507) 227-1713

U.S. Embassy, Economic Section (Trade Policy, Industry 
Specialists)
Chief, Economic Section, James M. Roberts
Labor Attache, John Mohanco
Economic Officer, Andrew Ericksen
Economic Officer, Robert C. Ward 
Tel:  (507) 227-1777
Fax:  (507) 227-1964

U.S. Agency for International Development
Director, David E.  Mutchler
Tel:  (507) 263-6011
Fax:  (507) 264-0104


WASHINGTON-BASED USG COUNTRY CONTACTS

U.S. Department of State
Desk Officers, Raymond Baca/Raymond Dalland
ARA (Inter American Affairs)/CEN-PAN
2201 C St. NW
Washington, DC 20520
Tel:  (202) 647-4986
Fax:  (202) 647-2901

U.S. Department of the Treasury
Desk Officer, Dwight Wolkow
1500 Pennsylvania Ave. NW
Washington, D.C. 20220
Tel:  (202) 622-1266
Fax:  (202) 622-1273

U.S. Department of Commerce
International Economic Policy
Panama Desk Officer, Juan Verde
Room 3025
14th & Constitution Ave.
Washington, D.C. 20230	
Tel:  (202)482-5680
Fax:  (202)482-4157

U.S. Department of Commerce
Liaison Office of Inter-American Development Bank
Director, Judith A. Henderson
1250 H Street, NW, 10th Floor
Washington, D.C. 20005
Tel:  (202) 942-8260
Fax:  (202) 942-8275

U.S. Department of Commerce
Liaison Office to the International Bank for
Reconstruction and Development
U.S. Executive Director's Office
1818 H St., NW, Room D-13004
Washington, D.C. 20433
Tel:  (202) 458-0118
Fax:  (202) 477-2967

U.S. Department of Commerce
Office of Multilateral Development Banks
Director, Brenda Ebeling
Room H-1107
Washington, D.C. 20230
Tel:  (202) 482-3399
Fax:  (202) 273-0927

U.S. Department of Agriculture
Foreign Agricultural Service
Trade Policy, Marsha Moke
12th and Jefferson Drive, SW
Washington, DC 20250
Tel:  (202) 720-6010
Fax:  (202) 690-2079

Overseas Private Investment Corporation
1100 New York Avenue, N.W.
Washington, DC 20527
Insurance Officer, Joan Cezarr
Tel:  (202) 336-8472
Fax:  (202) 408-5142
Finance Officer, Adrien Seaton
Tel:  (202) 336-8472, Fax: (202) 408-9866

Export-Import Bank of the U.S.
811 Vermont Avenue, NW
Washington, DC 20571
Business Development, Paula Swain-Priestly
Tel:  (202) 565-3921
Fax:  (202) 565-3931

U.S. Trade and Development Agency
Regional Director for Latin America, Al Angulo
Country Desk Officer, Orlando Velez
Room 309, S.A. - 16
Deaprtment of State
Washington, D.C. 20523-1602
Tel:  (703) 875-4357
Fax:  (703) 875-4009

Office of U.S. Trade Representative
Deputy Assistant USTR for Latin America and the Caribbean,
Ralph Ives
Director for Caribbean Basin Affairs, Sean Murphy
Office of the U.S. Trade Representative
600 17th Street, NW
Washington, D.C. 20506
Tel:  (202) 395-5190
Fax:  (202) 395-3911


U.S. - BASED MULTIPLIER ORGANIZATIONS RELEVANT FOR COUNTRY

Embassy of Panama
Ambassador Dr. Ricardo Alberto Arias
2862 McGill Terrace NW
Washington, DC 20008
Tel:  (202) 483-1407
Fax:  (202) 483-8413

Instituto Panameno de Comercio Exterior
(Panama Trade Development Institute)
Regional Director, Rosalinda Pinilla
1477 South Miami Ave., 2nd Floor
Miami, FL 33130
Tel:  (305) 374-8435
Fax:  (305) 374-1933
Toll Free:    (800) 245-1591


MINISTRIES AND GOVERNMENT OWNED AGENCIES IN PANAMA

Ministerio de Comercio e Industrias
(Ministry of Commerce and Industry)
Minister Nitzia de Villareal
P.O. Box 9658
Panama 4, Republic of Panama
Tel:  (507) 227-4222
Fax:  (507) 227-4134

Ministerio de Comercio e Industrias
Direccion Nacional de Hidrocarburos
(Hydrocarbon Administration) 
Director General, Hugo Tovar
P.O. Box 9658
Panama 4, Republic of Panama
Tel:  (507) 227-5674
Fax:  (507) 227-3927

Ministerio de Comercio e Industrias
Direccion General de Registro de la 
Propiedad Industrial
(Industrial Property Registry Administration)
Director General, Luz Celeste R. de Davis
P.O. Box 9658
Panama 4, Republic of Panama
Tel:  (507) 227-3987
Fax:  (507) 227-2139

Ministerio de Comercio e Industrias
Direccion de Recursos Minerales
(Mineral Resources Department)
Director General, Ing. Francia de Sierra
P.O. Box 3515
Panama 5, Rep. of Panama
Tel:  (507) 236-1823
Fax:  (507) 236-3173

Ministerio de Comercio e Industrias
Oficina de Comercio Interior
(Local Trade Office)
Director General,  Mirta Guevara de Buendia
P.O. Box 9658
Panama, Republic of Panama
Tel:  (507) 227-2161
Fax:  (507) 227-2139

Ministerio de Desarrollo Agropecuario
(Ministry of Agricultural Development)
Minister, Carlos Sousa Lennox
P.O. Box 5390 
Panama 5, Republic of Panama
Tel:  (507) 232-5043
Fax:  (507) 232-5044

Ministerio de Gobierno y Justicia
(Ministry of Government and Justice)
Direccion de Seguridad Publica
(Public Security Administration)
Director General, Jerry Wilson Navarro
P.O. Box 1628
Panama 1, Republic of Panama
Tel:  (507) 262-2929
Fax:  (507) 262-3511

Ministerio de Hacienda y Tesoro
(Ministry of Treasury)
Minister Olmedo Miranda, Jr.
P.O. Box 7304
Panama 5, Republic of Panama
Tel:  (507) 227-4998
Fax:  (507) 227-2357

Ministerio de Hacienda y Tesoro
Direccion Nacional de Aduanas
(Customs Service) 
Director General, Ing. Fernando Mendizabal
P.O. Box 1671 Balboa, Ancon
Panama, Republic of Panama
Tel:  (507) 232-5355
Fax:  (507) 232-6494

Ministerio de Hacienda y Tesoro
Direccion de Proveeduria y Gastos
Departamento de Proponentes
(Procurement Office)
Chief - Neyra de Perez
P.O. Box 1671 Balboa
Panama, Republic of Panama
Tel:  (507) 227-4372
Fax:  (507) 225-1620 

Ministerio de Salud
(Ministry of Health)
Minister, Dr. Aida M. de Rivera
P.O. Box 2048
Panama 1, Republic of Panama
Tel:  (507) 225-6080
Fax:  (507) 227-5276

Ministerio de Salud
Direccion de Control de Alimentos y Vigilancia Veterinaria
(Food Control and Veterinary Control Administration)
Director General, Rogelio Sinan Dominguez
P.O. Box 2048
Panama 1, Republic of Panama
Tel:  (507) 262-1619
Fax:  (507) 262-5443

Ministerio de Obras Publicas
(Ministry of Public Works)
Minister,  Luis Blanco
P.O. Box 1632
Panama 1, Republic of Panama
Tel:  (507) 232-5572
Fax:  (507) 232-5776

Autoridad de la Region Interoceanica
(Interoceanic Regional Authority)
Administrator, Nicolas Ardito Barletta
P.O. Box 2097, Balboa
Panama, Republic of Panama
Tel:  (507) 228-8044
Fax:  (507) 228-8988

Autoridad Portuaria Nacional
(National Port Authority)
Director General, Hugo Torrijos
P.O. Box 8062
Panama 7, Rep. of Panama
Tel:  (507) 269-7597
Fax:  (507) 264-2727

Administracion de la Zona Libre de Colon
(Colon Free Zone Administration)
General Manager, Victoria Figge
P.O. Box 1118
Colon, Republic of Panama
Tel:  (507) 445-1033 or 445-1559
Fax:  (507) 445-2165

Direccion de Aeronautica Civil (DAC)
(National Aeronautics Authority)
Director General, Eustacio Fabrega
P.O. Box 7615
Panama 5, Republic of Panama
Tel:  (507) 226-1142
Fax:  (507) 226-3860

Instituto Panameno de Turismo (IPAT)
(Tourism Institute of Panama)
Director General, Pedro Campagnani
P.O. Box 4421
Panama 5, Republic of Panama
Tel:  (507) 226-7414 or 226-3751
Fax:  (507) 226-3483

Instituto Panameno de Comercio Exterior (IPCE)
(Panama Trade Development Institute)
Director General,  Roy Rivera
P.O. Box 6-1897
Panama 6, Republic of Panama
Tel:  (507) 225-7244
Fax:  (507) 225-2193

Instituto de Recursos Hidraulicos y Electrificacion (IRHE)
(National Power and Light Company)
Director General,  Ramon Argote
P.O. Box 5285
Panama 5, Republic of Panama
Tel:  (507) 227-2240
Fax:  (507) 262-9294

Instituto Nacional de Telecomunicaciones (INTEL)
(National Telephone Company)
Director General, Juan Ramon Porras
P.O. Box 659
Panama 9A, Republic of Panama
Tel:  (507) 223-8620
Fax:  (507) 264-5743

Instituto de Acueductos y Alcantarillados Nacionales (IDAAN)
(National Water Works Company)
Director General, Jose Fierro
P.O. Box 5234
Panama 5, Republic of Panama
Tel:  (507) 223-8640
Fax:  (507) 264-0034

Inter-American Development Bank
(In-country office and representative)
Representative, Bolivar Santa Cruz
Avenida Samuel Lewis, Edif. Banco Union, Piso 14
Apartado Postal 7297
Panama 5, Rep. of Panama
Tel:  (507) 263-6944
Fax:  (507) 263-6183


TRADE ASSOCIATIONS

American Chamber of Commerce and Industry
Executive Director - Fred Denton
P.O. Box 168, Balboa
Panama, Republic of Panama
Tel:  (507) 269-3881
Fax:  (507) 223-3508

Asociacion de Comerciantes y Distribuidores de Viveres y 
Similares de Panama (ACOVIPA)
(Food Retailers and Distributors Association of Panama)
Executive Director - Jose Ma. Espino
P.O. Box 6-3594
Panama 6, Republic of Panama
Tel:  (507) 261-4304
Fax:  (507) 261-2346

Asociacion de Distribuidores de Automoviles de Panama (ADAP)
(Automobile Distributors Association)
Executive Director - Simon de la Rosa 
P.O. Box 476
Panama 9A, Republic of Panama
Tel:  (507) 261-1264
Fax:  (507) 261-0906

Asociacion de Usuarios de la Zona Libre de Colon
(Colon Free Zone Users Association)
Executive Director - Galo Pinto de la Ossa
P.O. Box 3118, Zona Libre de Colon
Colon, Republic of Panama
Tel:  (507) 441-4244
Fax:  (507) 441-4347

Asociacion Nacional de Desarrollo Economico (Fundacion ANDE)
(National Association of Economic Development)
Executive Director - Carlos G. de Obaldia
P.O. Box 6-3390, El Dorado
Panama, Republic of Panama
Tel:  (507) 227-7979
Fax:  (507) 264-9280

Asociacion Nacional de la Industria Pesquera Panamena 
(ANDELAIPP)
(National Fisheries Association)
Executive Director - Gustavo Justines
P.O. Box 5062
Panama 5, Republic of Panama
Tel:  (507) 251-0317
Fax:  (507) 251-1995

Asociacion Nacional de Ganaderos (ANAGAN)
(National Cattlemen's Association)
President - Boabdil Bernal
P.O. Box 6494
Panama 5, Republic of Panama
Tel:  (507) 225-1236 or 225-1337
Fax:  (507) 225-1337

Asociacion Panamena de Ejecutivos de Empresa (APEDE)
(Panamanian Association of Business Executives) 
Executive Director - Domingo de Obaldia
P.O. Box 1331
Panama 1, Republic of Panama
Tel:  (507) 227-3511 or 227-4085
Fax:  (507) 227-1872

Asociacion Panamena de Exportadores (APEX)
(Exporters Association of Panama)
Executive Director - Daniel Vega
P.O. Box 6-6527
Panama 6, Republic of Panama
Tel:  (507) 230-0284 or 230-0169
Fax:  (507) 230-0805

Camara de Comercio, Industria y Agricultura de Panama
(Chamber of Commerce, Industry and Agriculture of Panama)
Executive Director - Jose Ramon Varela
P.O. Box 74
Panama 1, Republic of Panama
Tel:  (507) 227-1285 or 227-1445
Fax:  (507) 227-4186 or 225-3653

Camara Panamena de la Construccion (CAPAC) 
(Construction Chamber of Panama)
Executive Director - Eduardo Rodriguez
Apartado 6793
Panama 5, Republic of Panama
Tel:  (507) 264-2255
Fax:  (507) 264-2384

Camara Minera de Panama
(Mining Chamber of Panama)
President, Julio C. Bennedetti
P.O. Box 55-2646 Paitilla
Panama, Rep. of Panama
Tel:  (507) 226-1769
Fax:  (507) 226-3967

Sindicato de Industriales de Panama (SIP)
(Industrialists Association of Panama)
Executive Director - Daniel Vega
P.O. Box 6-4798
Panama 6, Republic of Panama
Tel:  (507) 230-0284 or 230-0169
Fax:  (507) 230-0805

Union Nacional de Pequeñas y Medianas Empresas (UMPYME) 
(National Association of Small and Medium Sized Businesses)
Executive Director - Xiomara de Hall
P.O. Box 6-10027, El Dorado
Panama, Republic of Panama
Tel:  (507) 225-6040 or 225-6050
Fax:  (507) 225-4325

World Trade Center of Panama
Executive Director - Guillermo Ronderos
P.O. Box 6-2432
Panama 6, Republic of Panama
Tel:  (507) 269-6124
Fax:  (507) 269-6126


COUNTRY COMMERCIAL BANKS

Asociacion Bancaria de Panama
(Banking Association of Panama)
Executive Director, Ricardo Alba
P.O. Box 4554
Panama 5, Republic of Panama
Tel:  (507) 263-7044
Fax:  (507) 263-7783

Banco del Istmo
General Manager, L.J. Montague Belanger
P.O. Box 6-3823, El Dorado
Panama 6A, Republic of Panama
Tel:  (507) 269-5555
Fax:  (507) 263-5869

Banco General
General Manager, Raul Aleman
P.O. Box 4592
Panama 5, Republic of Panama
Tel:  (507) 227-0150
Fax:  (507) 227-3427

Banco Comercial de Panama
General Manager, Emanuel Gonzalez Revilla
P.O. Box 7659
Panama 5, Republic of Panama
Tel:  (507) 263-6800 or 263-4433
Fax:  (507) 263-8033

Banco Nacional de Panama
General Manager, Lic. Jose Antonio de la Ossa
P.O. Box 5220
Panama 5, Republic of Panama
Tel:  (507) 269-2966
Fax:  (507) 264-7155

The Chase Manhattan Bank, N.A.
General Manager, Olegario Barrelier
P.O. Box 9A-76
Panama 9A, Republic of Panama
Tel:  (507) 263-5855 or 263-5877
Fax:  (507) 263-6009

Citibank, N.A.
General Manager, Dionisio Koo
P.O. Box 555
Panama 9A, Republic of Panama
Tel:  (507) 236-4044
Fax:  (507) 236-1025

PRIBANCO, Primer Banco de Ahorros
General Manager, Joaquin De La Guardia
P.O. Box 7322
Panama 5, Republic of Panama
Tel:  (507) 227-2225
Fax:  (507) 227-4037

The First National Bank of Boston
General Manager, Luis Navarro
P.O. Box 5368
Panama 5, Republic of Panama
Tel:  (507) 264-2244 or 64-2146
Fax:  (507) 223-4089


COUNTRY MARKET RESEARCH FIRMS

Ditcher & Neira - Marketing Consultant
Director General, Leopoldo Neira
P.O. Box 6-7373, El Dorado
Panama, Republic of Panama
Tel:  (507) 264-3466
Fax:  (507) 223-1174

Data Market - Marketing Consultant
President, Albino De Leon
P.O. Box 6-86, El Dorado
Panama, Republic of Panama
Tel:  (507) 223-3974
Fax:  (507) 223-3936

Jaime Porcell & Asociados
President, Jaime A. Porcell
P.O. Box 4760
Panama 5, Rep. of Panama
Tel:  (507) 226-0438
Fax:  (507) 226-7390


MAJOR ADVERTISING AGENCIES

APCU de Panama, associated to James Walter Thompson
Manager, Ricardo Mendez
P.O. Box 6-7291, El Dorado
Panama, Republic of Panama
Tel:  (507) 263-9288
Fax:  (507) 263-9698

Boyd, Barcenas, S.A., associated to LINTA
Manager, Rafael Barcenas
P.O. Box 11373
Panama 6, Republic of Panama
Tel:  (507) 263-9300
Fax:  (507) 263-9692

FERGO, associated to Saatchi & Saatchi Advertising
President, Tony Fergo
P.O. Box 6-6249, El Dorado
Panama, Republic of Panama
Tel:  (507) 263-8811
Fax:  (507) 263-8892

DDB Needham Worldwide
President, Maria del Carmen Campagnani de Navarro
P.O. Box 5187
Panama, Rep. of Panama
Tel:  (507) 269-7622
Fax:  (507) 264-9622

Conte/McCann-Erickson
Manager, Norberto Esposito
P.O. Box 7025
Panama 5, Rep. of Panama
Tel:  (507) 263-5155
Fax:  (507) 263-7578

Cerebro/Young & Rubican
General Manager, Stuart Svenson
P.O. Box 7188
Panama 5, Rep. de Panama
Tel:  (507) 263-7355
Fax:  (507) 264-1689



      APPENDIX F
      MARKET RESEARCH


Non-Agricultural Market Research

      Industry Sector Analyses (ISA) - U.S. Department of 
Commerce

      FY-1995
      -     Automotive: Engine Parts/Suspension Parts (December 1994)
      -     Building Products: Non-Lumber (January 1995)
      -     Medical Equipment: Disposables (April 1995)
      -     Food Processing Equipment: 
Beverages/Diary/Poultry/Meat
            (June 1995)
      -     Security and Safety Equipment (July 1995)
      -     Refrigeration Equipment: Industrial (September 1995)

      FY-1996
      -     Automotive Parts & Services Equipment (Nov. 1995)
      -     Medical Equipment (January 1996)
      -     Financial Services (April 1996)
      -     Telecommunications Equipment (May 1996)
      -     Computer and Peripherals (July 1996)
      -     Electrical Power Systems (September 1996)



Agricultural Market Research 

      U.S. Department of Agriculture
      -    1995 Agricultural Situation, Panama (March 1995)
      -    1996 Agricultural Situation, Panama (March 1996)


NOTE:  A complete list of market research reports is 
available fron the National Trade Data Bank (NTDB).



      APPENDIX G
      TRADE EVENT SCHEDULE



BOBBIN SHOW/AAMA CONVENTION
U.S. Department of Commerce, International Buyer Program, 
Atlanta, GA.  Jilma A. de Robles of the Commercial Service 
in Panama will recruit a delegation of Panamanian 
businesspersons to travel to this event.
September 12 - 15, 1995
Sandra Perry
Bobbin Blenheim, Inc.
P.O. Box 1986
1110 Shop Road
Tel:  (803) 771-7500
Columbia, SC 29202
Fax:  (803) 799-1461


MEDICAL AND HEALTHCARE CATALOG SHOW
Approximately 70 companies from all over the United States 
will exhibit their company catalogs at this event, to be 
held in conjunction with EXPOMEDICA 95.  The Panamanian 
Chamber of Commerce is the organizer of Expomedica 95, an 
international medical and health equipment and supplies 
trade show.
October 4 - 8, 1995
J. Enrique Tellez, Commercial Specialist
US&FCS Panama
Unit 0945
Tel:  507-227-1777
APO AA 34002
Fax:  507-227-1713


MULTI-STATE CATALOG EXHIBITION (ID 96000439)
U.S. Department of Commerce sponsored delegation and catalog 
exhibition that will visit four cities, Santiago, Buenos 
Aires, Tegucigalpa, San Salvador and Panama.  FCS Offices 
will arrange commercial events for this mission.
October 22 - 24, 1995
Louis Quay
U.S. Department of Commerce
Tel: (202) 482-3973
Washington, D.C.
Fax:  (202) 482-0115
Jilma A. de Robles, Commercial Assistant
Unit 0945
Tel: (202) 227-1777
APO AA
Fax:  (202) 227-1713


AUTOMOTIVE AFTERMARKET INDUSTRY WEEK '95
U.S. Department of Commerce, International Buyer Program, 
Las Vegas, NV.  Jilma de Robles of the Commercial Service in 
Panama will recruit a delegation of Panamanian 
businesspersons to travel to this event.  U.S. companies 
interested in meeting members of the delegation may contact 
the International Visitors Center at the show for 
appointments.
October 24 -27, 1995
Ms. Judy Novak
William T. Glasgow, Inc.
16066 South Park 
Tel:  (708) 333-9292
South Holland, IL 60473
Fax:  (708) 333-4086

EXPOCOMER 96
Organized by the Chamber of Commerce, Industry and 
Agriculture, Panama City, Panama.  Expocomer is the largest, 
annual, horizontal, international exhibition in Panama.  
There are 650 booths, 28 country pavilions and 13,000 buyers 
at this event.  The U.S. recruiter/organizer of the USA 
Pavillion is DCCI International of Washington D.C.
March 6 - 11, 1996
Daniel Chambers, President
D.C. Commerce International, Ltd.
3021 South Hill Street
Tel:  (703) 941-3460
Arlington, VA 22202
Fax:  (703) 941-2642


GOLD KEY MISSION, MIAMI FOREIGN TRADE ASSOCIATION
Sponsored by the Miami Foreign Trade Association, 
approximately 15 Florida companies will visit Panama to 
participate in Expocomer 95 and to identify potential 
commercial partners.  The Commercial Service in Panama will 
schedule business appointments.
March 6 - 11, 1996
Ralph Puga, President
Miami Foreign Trade Association
3555 Northwest 74th Ave.
Tel:  305-592-4893
Miami, FLA 33122 
Fax:  305-594-7862

DAVID INTERNATIONAL TRADE FAIR
Patronato de la Feria de David, David, Chiriqui, Panama.  
Annual agricultural horizontal international fair.  The 
trade fair exhibits cattle, horses, fruit and vegetable,
leather goods, handicrafts and other miscellaneous goods.
March 13 -24, 1996
Rigoberto Martinez
Patronato de la Feria de David
P.O. Box 206, David
Tel:  (507) 775-3532
Chiriqui, Rep. of Panama
Fax:  (507) 775-5428

AUTOMOTIVE MATCHMAKER TRADE MISSION
U.S. Department of Commerce.  Central American Matchmaker to 
Guatemala, Costa Rica and Panama.  Automotive parts and 
accessory manufacturer and supplies to visit Central 
America.  Trade mission will include an exhibition and 
business appointments.
April, 1996
Molly Costa
U.S. Department of Commerce
Tel: (202) 482-0692
Washington, DC 20230
Fax:  (202) 482-0115
Jilma A. de Robles, Commercial Assistant
Unit 0945
Tel:  (202) 227-1777
APO AA 34002
Fax:  (202) 227-1713

POWER-GEN AMERICAS'95
U.S. Department of Commerce, International Buyer Program,
Anaheim, CA.  J. Enrique Tellez of the Commercial Service in
Panama will promote and recruit a delegation of Panamanian 
businesspersons to travel to this event.
December 5-7, 1995
PennWell Conference and Exhibition
3050 Post Oak Blvd., Suite 205
Tel:  (713) 621-8833
Houston, TX 77056
Fax:  (713) 963-6283

COMDEX FALL'95
U.S. Department of Commerce, International Buyer Program, 
Las Vegas, NV.  J. Enrique Tellez of the Commercial Service 
in Panama will promote and recruit a delegation of 
Panamanian businesspersons to travel to this event.
November 13-17, 1995.
Richard L. Schwab, Vice- President
The Interface Group
300 First Ave.                                       
Tel:  (617) 449-6600
Needham, MA 02194                                    
Fax:  (617) 444-3322



This Trade Event Schedule is subject to change.  Interested 
firms should consult the Export Promotion Calendar on the NTDB, or 
contact The Commercial Service Panama for the latest information.

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