Panama, a Country of Opportunities and Industrial Growth
Panama has become one of the most attractive destinations for investment in Latin America, combining a dollarized economy, over 60 international banks, a transoceanic canal, ports on both oceans, multiple international airports, and 23 trade agreements.
The country also benefits from free trade zones, double taxation treaties, and has been recognized several times by International Living’s Global Retirement Index as the #1 retirement destination in the world.
Together, these advantages make Panama a strategic hub for manufacturing, logistics, and industrial development, offering both fiscal efficiency and legal stability to local and international investors.
Industrial Investment Incentives: The Industrial Promotion Certificate (CFI)
The Industrial Promotion Certificate (CFI) is one of Panama’s most significant government incentives for industrial and agroindustrial companies that invest or reinvest in their productive capacity.
Over 100 companies have already benefited from this incentive, but many others remain unaware of its potential. With proper planning and guidance, the CFI can significantly improve cash flow, competitiveness, and profitability for industrial operations.
What Does the Industrial Promotion Certificate (CFI) Cover?
The CFI provides companies with a 40% tax credit on qualifying industrial or agroindustrial investments that contribute to innovation, expansion, and efficiency.
Eligible Investment Activities
- Research and development (R&D): improving processes, product quality, or developing new products.
- New production facilities: building or expanding manufacturing plants.
- Quality and environmental management systems.
- Energy efficiency projects: optimizing energy use and reliability.o.
- Reinvestment of profits in production:
- Expanding installed capacity.
- Acquiring new machinery and equipment.
- Human resource training and development.
- Job creation related to production.
This incentive encourages technological innovation, reinvestment, and sustainable industrial growth, strengthening Panama’s position as an industrial hub in Latin America.
How to Apply for the Industrial Promotion Certificate (CFI)
Applications for the CFI must be submitted to the Ministry of Commerce and Industries (MICI) of Panama.
The request must include technical and legal documentation that demonstrates and supports the investment made.
Professional Tip:
Companies should plan their investments strategically, ensuring they generate all required documentation from the beginning to facilitate recognition of the incentive later.
LAC Legal assists clients throughout the process, ensuring that applications meet all legal requirements and maximize approval success.
National Industry Registry — A Prerequisite for the CFI
Before applying for the CFI, companies must be registered in Panama’s National Industry Registry, which provides additional fiscal advantages.
Key Benefits of the National Industry Registry
- 3% import tax rate on raw materials, semi-finished goods, machinery, spare parts, and packaging materials used in production.
- 100% deduction of the Value Added Tax (VAT) paid during the first year on machinery and equipment used in manufacturing.
- Tax loss carryforward for up to five fiscal years, with a 20% annual deduction rate.
These incentives promote industrial modernization, production efficiency, and international competitiveness, while providing strong legal protection for investors.
Eligible Sectors and Opportunities for 2025
The CFI is open to new and existing industrial and agroindustrial companies, particularly those engaged in:
- Food processing and export-oriented agribusiness.
- Manufacturing and assembly.
- Building materials and industrial goods.
- Technological innovation in production processes.
In 2025, Panama’s Industrial Promotion Certificate strengthens the country’s role as a regional hub for sustainable investment and industrial development, fostering both local and international growth.
LAC Legal — Your Strategic Partner for Accessing the CFI
At LAC Legal, we help industrial and agroindustrial companies structure and document their investments to qualify for the Industrial Promotion Certificate (CFI) and National Industry Registry benefits.
Our services include:
- Legal and fiscal evaluation of investment projects.
- Preparation and verification of documentation required by the MICI.
- Advisory on compliance and technical certification standards.
- Guidance and assistance throughout the approval process.
Contact us today to discover how your company can benefit from Panama’s industrial and tax incentives in 2025, ensuring compliance, efficiency, and growth.