Countries › Panama › Guide › 3. Investing › Restricted activities for foreign investors in Panama: retail trade, land near the borders, islands, public utilities and gaming

Restricted activities for foreign investors in Panama: retail trade, land near the borders, islands, public utilities and gaming

Last verified: 2026-10-29 · Status: Stable

Panama screens no foreign investment, but its Constitution reserves retail trade to Panamanians by birth and to companies formed by Panamanians or qualifying foreigners, bars foreign owned buyers from land within ten kilometres of the borders and restricts the sale of island territory. Public utility companies must be majority Panamanian owned unless a law makes an exception, games of chance may only be run by the State, and the law may restrict wholesale trade by foreigners to protect Panamanian wholesalers. Foreigners may hold stakes in retailers that sell goods they manufacture themselves.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender (Ley 84 de 1904; see fx/dollarization-and-the-balboa). USD figures therefore equal the balboa figures.

Key facts

Retail trade by foreigners	Reserved to Panamanians and qualifying entities; foreigners may hold stakes in retailers of their own manufactured goods textConstitución art. 293, as of 2026-10-29 · in force
Band near the borders where foreign owned buyers cannot own land	10 kmConstitución art. 291, as of 2026-10-29 · in force
Public utility companies	Majority Panamanian capital unless a law makes an exception textConstitución art. 285, as of 2026-10-29 · in force
Games of chance and betting	Reserved to the State textConstitución art. 297, as of 2026-10-29 · in force

The rule

1. Only the following may engage in retail trade: Panamanians by birth; certain naturalised Panamanians (immediately if married to or with children with a Panamanian national when the Constitution came into force, otherwise three years after their final naturalisation letter); legal entities and foreigners already lawfully in retail trade when the Constitution came into force; and legal entities formed by Panamanians or by foreigners entitled to retail individually. Foreigners not authorised to retail may nonetheless hold stakes in companies that sell products they manufacture themselves.Constitución Política (texto único, Gaceta Oficial 25176 de 15 de noviembre de 2004), art. 293, 2004-11-15 official text · verified 2026-10-29

2. Retail trade means selling to the consumer, or acting as representative or agent of producing or trading companies, or any other activity the law classifies as retail. A farmer or maker of handicrafts selling their own products is excepted, and the law must set up supervision and sanctions to stop excluded persons from retailing through front persons or other fraud.Constitución Política (texto único, Gaceta Oficial 25176 de 15 de noviembre de 2004), art. 293, 2004-11-15 official text · verified 2026-10-29

3. Wholesale trade is everything not covered by the retail definition and anyone may engage in it, but the law may restrict wholesale trade by foreigners where needed to protect wholesale trade carried on by Panamanians, without affecting foreigners already lawfully in wholesale trade.Constitución Política (texto único, Gaceta Oficial 25176 de 15 de noviembre de 2004), art. 294, 2004-11-15 official text · verified 2026-10-29

4. Foreign individuals and companies, and Panamanian companies with any foreign capital, may not acquire ownership of public or private land located less than ten kilometres from the borders. Island territory may be sold only for specific development purposes, when it is not a strategic or reserved area and has been declared a special development area with legislation on its use that guarantees national security; public use property stays with the State.Constitución Política (texto único, Gaceta Oficial 25176 de 15 de noviembre de 2004), art. 291, 2004-11-15 official text · verified 2026-10-29

5. No foreign government or foreign official or semi official entity may acquire ownership of any part of the national territory, except embassy premises.Constitución Política (texto único, Gaceta Oficial 25176 de 15 de noviembre de 2004), art. 290, 2004-11-15 official text · verified 2026-10-29

6. Most of the capital of private public utility companies operating in Panama must be Panamanian, save for exceptions that the law establishes and defines.Constitución Política (texto único, Gaceta Oficial 25176 de 15 de noviembre de 2004), art. 285, 2004-11-15 official text · verified 2026-10-29

7. Games of chance and activities that give rise to betting may be operated only by the State; the law regulates them.Constitución Política (texto único, Gaceta Oficial 25176 de 15 de noviembre de 2004), art. 297, 2004-11-15 official text · verified 2026-10-29

8. The law may, for reasons of work, health, morality, public security and the national economy, subject foreigners to special conditions or deny them certain activities, so specific laws can add nationality conditions.Constitución Política (texto único, Gaceta Oficial 25176 de 15 de noviembre de 2004), art. 20, 2004-11-15 official text · verified 2026-10-29

Activity or asset	Limit	Article
Retail trade	Panamanians by birth, qualifying naturalised Panamanians and entities formed by them; stakes allowed in retailers of own manufactures	293
Wholesale trade	Open, but the law may restrict foreigners to protect Panamanian wholesalers	294
Land within 10 km of the borders	No ownership by foreigners or by companies with any foreign capital	291
Island territory	Sale only for specific development purposes under special legislation	291
Land owned by foreign governments	Prohibited except embassies	290
Public utility companies	Majority Panamanian capital unless a law provides otherwise	285
Games of chance	State only	297

Constitutional limits that matter to foreign investors.

Worked example

A Colombian consumer goods group wants to sell directly to Panamanian shoppers.
Because retail trade, including acting as agent of producing companies, is reserved, it cannot own the store chain outright unless it manufactures the goods it sells; it can wholesale to Panamanian retailers, or hold a stake in a retailer that sells its own manufactured products.
A separate plan to buy a farm 6 km from the Costa Rica border would fail, because foreign owned companies cannot acquire land within ten kilometres of the borders.

Step by step

Classify the business model: retail (sale to consumers, representation or agency), wholesale, manufacturing, services.
If retail is involved, check whether the products are manufactured by the group, which allows a foreign stake, or structure through a Panamanian retailer.
For land deals, map the parcel's distance to the Colombia and Costa Rica borders and check whether it is island territory.
For utilities, telecoms, energy or gaming, read the sector law, which sets the ownership exceptions and licence rules.
Check professional licensing rules before hiring foreign professionals to practise in Panama.

Common traps

Acting as a representative or agent of producing companies counts as retail trade under art. 293, which catches some distribution models.
The border land ban covers Panamanian companies with any foreign capital, not only majority foreign ones.
Using a Panamanian front person to retail is the fraud art. 293 tells the law to sanction.
Island land is sold only for specific development purposes under special legislation; confirm the legal basis for any island title before buying.

Sources

← Ten year legal and tax stability in Panama: registering a B/.2 million investment with MICI under Ley 54 de 1998Multinational headquarters (SEM) licence in Panama: who qualifies, the 5 percent tax regime, substance tests and staff visas under Ley 41 de 2007 →

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