Randall Castillo Ortega discussing importing and exporting between Panama and the European Union

Randall Castillo Ortega discussing importing and exporting between Panama and the European Union

Although Panama has a relatively small market, with only 3.9 million potential consumers, its strategic geographical location and the Colon Free Zone, a customs territory whose volume of foreign trade accounts for four-fifths of Panamanian trade, make Panama a dynamic economy in which the services sector has a very significant weight. Randall Castillo Ortega, an expert on the import/export business in Panama, discusses the benefits of creating an import business in the country.

The economic relations with Spain at the moment are excellent, our country being one of the top ten suppliers in Panama and a prominent foreign investor. Companies participate assiduously in public tenders for the award of projects.

In recent years, Panama’s economy has grown at an average annual rate higher than the rest of Latin America. Says Castillo, “For this country, the economy that revolves around the activity of the Interocean Channel, a newly expanded infrastructure with outstanding Spanish participation, is of vital importance. This growth has also been accompanied by low levels of inflation and unemployment, and effective control of the fiscal deficit.”

Most of Panama’s economic activity is concentrated in its capital, the main business core (generates 80% of the national GDP), and in the Colon Free Zone. The legal framework for attracting foreign direct investment is quite favorable, as well as for the establishment and operation of company headquarters from other countries.

Spanish imports from Panama are mainly focused on agri-food, fishery and beverage products, such as fish, seafood and fruit. Ships and vessels also have some relevance among the most relevant import sectors. This sector also occupies a prominent position among Spanish exports to Panama, along with perfumery products, metal manufactures, machinery, electrical equipment, pharmaceuticals and textile garments.

Panama has a poorly developed industrial sector, so it has to import almost all kinds of products. Among the sectors with the highest potential demand are industrial technology, fashion, habitat, mechanical auxiliary industry and energy production. Explains Castillo, “The export of equipment and machinery for construction and public works offers good opportunities due to the great expansion of building activity and the development of infrastructure. Opportunities in the health sector, both in medical equipment and medicines, are also relevant; public works and consulting services.”

The Government of Panama is specially promoting some strategic sectors for its economy that may attract foreign companies, including transport, logistics, energy, tourism and commercial distribution.

Whether you want to import from China, find a supplier in the United States, or buy from a wholesaler in Europe, there are many things you need to consider first. No product is profitable by nature and the less you know about a certain product, the harder it will be to avoid fraud and ensure the quality of your products. Generally speaking, the selection of products basically comes down to your own personal interests, as is the case for all companies.

Starting a business requires great commitment, and if you are not motivated to sell a certain product, then it is destined to fail. There are certain things to consider when selecting products for your import business. The first is to try to be better at one or a few products instead of trying to be better at everything. Focus on one or a few suppliers instead of spreading your investment to many vendors. A supplier will consider it more seriously as a buyer of large quantities. Fewer vendors will also limit the time you have to spend managing your supply chain and give you more time to focus on selling and developing your business.

Branding your products is not difficult and perceived value can increase with the printing of a simple logo. Many providers can do this for free or for a small additional fee. A brand doesn’t have to be famous and will certainly increase the value of your business in the future, in case you want to sell it. Says Castillo, “A product is more than its name; it is a system of materials and components and the less you know about your product, the less likely it is to succeed. Nor is “good quality” an international standard nor is good quality based entirely on the quality of the materials and components used to manufacture your product.”

The next step is to find providers. This isn’t too difficult and you can find thousands on the Internet. Finding suppliers in Europe has a large number of benefits, such as lower tariffs and shorter delivery times. There is no B2B portal exclusive to European suppliers, but there are directories of European wholesalers in different European languages.

Transportation is a major cost in import companies and any small mistake can cost a fortune. To begin with, there are two main forms of transport: air transport and maritime transport. Each importing company in the European Union requires requesting an EORI number before its cargo reaches the destination port. That application is free and takes only between 4 and 5 days. This application can be made online on the website of your country’s customs department.

Small businesses must compete with good quality, service and innovation without price. You will never be able to beat large wholesale companies that import large volumes. Especially to get started, it is advisable to use a Shopify online store platform before installing other more complex options like Prestashop.