Panama Internet and Ecommerce | Panama’s Silicon Valley

internet ecommerce

Internationally minded Ecommerce companies or entrepreneurs looking for the ideal center to establish an Epresence need look no further than the “Panama’s Silicon Valley”.

Panama offers many advantages to e-businesses looking to set up offshore, including: 

    • US dollar-based economy.
    • Earthquake-free.
    • No hurricanes.
    • No active volcanoes.
    • No taxes on foreign source income.
    • Excellent living conditions.
    • Fully bilingual certified engineers.
    • Best submarine fibre optic access of the region.
    • No pollution. 

Panama boasts excellent access to multiple high-bandwidth continental fibre optic networks in telecommunications infrastructure.  The extremely low risk of natural disasters such as hurricanes and volcanoes give Panama’s telecom sector security and reliability of service as well as a competitive advantage over other offshore jurisdictions.   

And because of its central location in the heart of the Americas, Panama is extremely easy to access from almost anywhere.  

Panama’s long history as an international banking and services jurisdiction has also resulted in the availability of know-how in Internet technology and information technology, as well as sufficient human resources to install and maintain e-commerce operations.  

And Panama is a zero-tax jurisdiction.  There are no double tax treaties that can be used for commercial activities, and no value-added tax is payable on goods or services exported from Panama. 

Because of these advantages, Panama is an ideal location for:

    • Internet service providers.
    • E-commerce providers.
    • Applications outsourcing ASP.
    • Broadband content providers.
    • New media content providers.
    • Exchange traffic. 

International Technopark of Panama  

Panama’s Technopark is a mixture of commercial space, offices, technical facilities and ancillary residential properties.  The government is supplying 20 hectares of land with complete infrastructure and buildings worth about $50 million.   

The Technopark opened in January 2000 and is located at the former US Army Base at Fort Clayton along the Pacific side of the Panama Canal, five kilometres from downtown Panama City and a few hundred metres from the fibre optic submarine cables crossing the canal.    

Since the Technopark project was unveiled in August 1999, 20 companies have signed up as tenants and over 40 have expressed interest.  Oracle, Cisco, Microsoft and C&W are a few of the big-name companies that have set up in Panama A special Technical Cooperation Agreement has also been negotiated with the European Union.  Under the agreement, the EU has assisted in Technopark project development, strategic plan definition and in identifying niches in which Panama has a “comparative advantage.”   

A growing number of companies are also signing up for the “Hi-Tech Incubator” program that has been established to accommodate and stimulate the creation of technology start-ups.  The Technopark is attracting interest from a diverse group of businesses that may be divided into three separate, but inter-connected areas:

    • Biotechnology, marine resources, reforestation, tropical medicine and     aquaculture.
    • IT, telecommunications, geographic research and data transfer.
    • Multimodal transport, automobile, aviation and marine technology. 

Special legislation applies to all businesses operating within the Technopark and includes significant fiscal benefits, immigration advantages and an established infrastructure requiring reduced start-up investment.  

 The Panamanian Government also granted the Technopark and all entities established within it, the following benefits for an extendible 25-year period:

    • Exemption of all taxes, contributions, duties or import fees on all machinery, equipment, furniture, vehicles, appliances, or materials necessary for the development of the project.
    • Exemption of the movable property transfer tax (VAT) on machinery, equipment, vehicles, appliances and material acquired and necessary for the development of the project.
    • Exemption of any tax duty, or lien imposed on the remittance of money abroad, when such remittance or transfer of funds takes place in relation to the purposes of the project. 

Special immigration rules are also in place to promote the installation of hi-tech business in the Technopark.  And special visas will be granted to expatriates who come to Panama to participate in the development of listed projects. 

Private hi-tech parks 

Under Law 25 of 1992, Panama’s export processing zones were created to promote foreign investment by establishing a special regime to companies exporting goods or services produced or processed within the zones.    EPZs can be created as private hi-tech parks to host a variety of companies.   One important highlight is the granting of exclusive rights to EPZ developers to provide their own telecom and energy allowing the possibility of 24-hour redundancy and related services.  The most important incentives granted to EPZs are: 

    • Exemption of all taxes, contributions, duties or import fees on all machinery, equipment,furniture, vehicles, appliances or materials necessary for the development of the project.
    • Exemption of any national direct tax on capital.
    • Exemption of income taxes.
    • Exemption of any national direct tax on dividends and interests originated from securities issued by the company and traded in local or international markets.
    • Special immigration and labour regime.


Panama is especially attractive to foreign investors for its tax benefits, particularly those involving income tax, which is not applicable to foreign source income.  This concept of territoriality is one of the determining factors that make Panama a center of international operations. It is also an important consideration for e-commerce companies looking for somewhere to set up a permanent establishment for their sales and payments for future tax planning. 

The government motivates potential investors to base their e-commerce operations in Panama as a virtual nation with an environment where international business is welcomed.  Panama continues to encourage foreign capital to enter its domain.

Of course, Panama’s imperviousness to change cannot be attributed to accident or chance.  There are several foundations on which Panama’s extraordinary stability as a base for foreign investment continues to rest.

For example, a company with its headquarters in the US, its manufacturing facility in Mexico, its distribution from Panama’s Colon Free Zone and its e-commerce and payment transactions based in Panama can serve customers in North and South America, Europe and Asia. 

The extraordinary facilities Panama affords to foreign investors for various hi-tech industries complement the country’s investment incentives designed to prevail in a very competitive regional environment.  This, together with the strong growth of Panama’s international maritime and financial centres, can be seen as heralds of a second Singapore in the middle of the Americas, a point of reference not to be ignored in the new economy of the 21st century. 

If you want to set up your Business in Panama, we have licensed real estate agents, investment advisors and we work closely with Pardini & Asociados, a law firm with 40 years of experience for all legal matters to assist you on all your business needs.

The BusinessPanama Group provides a convenient One Stop Shop offering the services of

    • Setting up the company or branch
    • Locating office and living premises in Panama City for the company and its executives
    • Setting up all operations, contracts, permits, etc.
    • Accessing special tax incentives
    • Applying for visas, work and residence permits
    • Relocation services
    • Others

For more information, please contact us.