Import Duty Exemption and Free Zone Scope under Ley 90

1. Key takeaways

Article 28 of Ley N° 90 provides that devices and biomedical equipment covered by the law are exempt from all import duties (exentos de todo arancel de importación), in order to speed the nationalisation of these products and to guarantee the best possible supply to the population. The same article grants a second and narrower relief: where the Social Security Fund (CSS) and the Ministry of Health and its dependent agencies purchase devices, biomedical equipment and related products covered by the law, they are also exempt from the transfer and services tax on movable property (ITBMS). Separately, Article 1 extends the scope of the law to special fiscal or customs territories, such as free zones, processing zones or similar areas.

• Duty exemption is statutory — it sits in the law rather than in a regulation or a temporary administrative measure, which gives it a higher degree of stability.
• Two different taxes — import duty is exempt for all covered goods; ITBMS relief applies only to defined public purchasers.
• Free zones are inside the scope — Article 1 expressly includes free zones and processing zones, so activity there is not outside the law.
• Intervention is possible but not permanent — Article 3, second paragraph, of DE 490 allows the health authority to intervene in special territories for public health reasons or at the request of a manufacturer or distributor.
• Exemption is not a licence to simplify documents — the twelve-item invoice rule in Article 27 continues to apply to duty-free shipments.
• Colón Free Zone warehousing — operations established there are subject to Ley 90, but that does not mean every domestic-standard facility requirement applies in the same way.

2. Legal basis

Article 28 of Ley N° 90 of 26 December 2017 (Gaceta 28433-B) contains both reliefs. Article 1, first paragraph, defines the territorial scope. In the implementing decree, Article 3, second paragraph, addresses intervention in special territories, and Article 1 describes the activities the decree covers.

3. Expert insights

Insight one: the duty exemption is written into the law rather than into subordinate rules, which makes it relatively stable. Article 28 is a statutory exemption, not a temporary relief granted by administrative measure. Panama’s tariff levels are generally moderate, but a full statutory exemption for medical devices, combined with a dollarised economy in which the balboa is pegged one to one to the US dollar and no exchange controls apply, forms part of the institutional basis for the country’s position as a regional distribution hub. For a supplier deciding where to hold inventory for the region, the combination of zero duty and currency stability matters more than the headline tariff rate.

Insight two: Article 1 brings free zones within scope, which distinguishes Panama from most Central American jurisdictions. In many countries device legislation stops at the customs frontier, whereas Panama expressly names free zones (zonas libres) and processing zones (zonas procesadoras). Read with Article 3, second paragraph, of DE 490, which allows the health authority to intervene in special territories, the result is a model best described as applicable but not resident: the law applies to the activity, without requiring a permanent regulatory presence inside the zone. A company warehousing in the Colón Free Zone is therefore subject to Ley 90, but that is not the same as having to equip the site to the full standard expected of a domestic establishment.

Insight three: duty exemption does not mean exemption from clearance checks. Article 27 requires twelve items of information to be verified on the invoice and related documents, while Article 28 removes the duty. The two run in parallel, which means what is exempt is the tax, not the paperwork. Treating the exemption as a simplified clearance route leads to goods being held because the document set is incomplete, and the hold costs more in time than the duty would have cost in money. The correct reading is that the exemption rewards complete documentation with faster nationalisation rather than replacing the documentation requirement.

Insight four: the ITBMS relief has a limited class of beneficiary. The second paragraph of Article 28 confines the relief to the Social Security Fund and the Ministry of Health and its dependent agencies, in other words public purchasers. A private importer does not obtain ITBMS relief and benefits only from the duty exemption. Distinguishing these two taxes and these two classes of buyer is the foundation of any credible landed-cost model for Panama: the duty line is nil for covered goods, while the ITBMS line depends on who is buying, and collapsing the two produces a cost estimate that is wrong in one direction or the other.

4. Practical recommendations

• Model import duty at zero in the landed-cost calculation, but retain ITBMS as a cost line for private buyers.
• Include warehousing and re-export operations in free zones or processing zones in the compliance assessment rather than treating them as outside the regime.
• Prepare clearance documents in full against the twelve items of Article 27, without simplifying on the ground that the goods are duty free.
• Apply the ITBMS relief only to public purchasers such as CSS and MINSA, and keep their transactions on a separate ledger.
• State the pricing currency in contracts, whether balboa (B/.) or US dollars.
• Where a public health intervention occurs in a free zone, respond through the manufacturer or distributor channel contemplated by Article 3, second paragraph.

5. Verification checklist

• □ Import duty confirmed as fully exempt by statute (Article 28, first paragraph)
• □ ITBMS relief confirmed as limited to CSS and MINSA (Article 28, second paragraph)
• □ Free zone or processing zone operations confirmed as within the scope of Article 1
• □ Clearance documents prepared against the twelve items of Article 27
• □ Duty and ITBMS separated in the cost calculation
• □ Contract currency stated explicitly

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support for the Panamanian market. Our team manages Ministry of Health (MINSA) sanitary registration applications, prepares Spanish-language dossiers, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com