New vendor law shuts foreign sellers out of Panama's sidewalks

Panama's first national law for street vendors is now in force, and it draws a clear line by nationality. Law 540 of 2 July 2026, published in the Gaceta Oficial on 3 July (La Prensa, Crítica), sets its entry into force in Article 17, which places its start about 3 October 2026 (three months after promulgation on 3 July). TVN reported on Monday 5 October that the law is entering into force.

The law creates a National Register of Street Vendors run by the Ministry of Commerce and Industries (MICI) with the municipalities, and a new accreditation permit for authorized vendors. To get that permit, an applicant must be a Panamanian citizen, show a cédula, be on the register, file a sworn statement about the activity and describe or sketch the spot where they will work. Food sellers also need valid white and green health cards from Minsa (TVN, La Prensa, Metro Libre).

What happens to foreign vendors

Infobae reports that the law leaves hundreds of foreigners, mostly Central Americans and Venezuelans, without a legal way to keep selling on the street, and that those who continue risk confiscation of goods and fines. Rafael Rodríguez of the Association of Residents and Naturalized Citizens of Panama (Arena) backed the goal of ordering public space, but asked mayors for a transition period until January so foreign vendors can look for other work (TVN, Infobae).

What it gives Panamanian vendors

Vendors working without a permit when the law took effect have up to 120 calendar days, counted from promulgation (3 July 2026), to apply for accreditation at their mayor's office; those with a valid municipal permit can keep working until it expires (Law 540, Articles 13 and 14). Vendors with a valid permit cannot be removed from their spot without a formal relocation proposal, notified at least six months in advance, with a new space that has basic services (La Prensa, TVN). The Executive has up to six months from promulgation to issue the regulations (Law 540, Article 16; La Prensa).

The bigger rule behind it

For anyone thinking of selling to the public in Panama, this is a reminder of an older rule. Article 293 of the Constitution reserves retail trade (selling to the consumer, and acting as agent or representative of producers or merchants) mainly to Panamanians by birth, certain naturalized citizens, and companies formed by people who themselves qualify. Farmers and craft makers selling their own products are exempt, and foreigners may hold stakes in companies that sell products they manufacture. The same article tells lawmakers to penalize anyone who gets around the rule through a front person. Wholesale trade is open to anyone under Article 294.

Bottom line for expats

A residency card, even a permanent one, does not give you the right to sell retail in Panama. If you plan to open a shop, a food stall, a market table or a consumer-facing business, talk to a Panamanian lawyer before you sign a lease, and check separately whether your residency category allows you to work at all. Do not put a business in a Panamanian friend's name to get around Article 293. And if you rely on street vendors near your building, expect more municipal checks in the coming months as the register gets started.

Sources

Infobae - Law 540 in force "this week"; reserves street vending to Panamanian citizens (by birth or naturalization); hundreds of foreigners, mostly Central Americans and Venezuelans; confiscation and fines; Arena's Rafael Rodríguez asks transition to January (via TVN interview) - 5 Oct 2026
TVN (video) - "Ley que regula la buhonería entra en vigencia"; Arena asks opportunity for foreign vendors - 5 Oct 2026
TVN - Law 540 published Gaceta 30560, 3 Jul 2026; in force in three months; MICI register; permit requirements (citizen, cédula, register, sworn statement, sketch); health cards; eviction protection with six-month notice and public-interest exceptions - 3 Jul 2026
La Prensa - In force three months after promulgation (early October 2026); regulations within six months (early January 2027); four vendor categories - 4 Jul 2026
Crítica - Only Panamanian citizens; 120 days for vendors without permit; valid permits continue to expiry; in force in October - 8 Jul 2026
Metro Libre - Permit requires Panamanian nationality; MICI register; deputy Ernesto Cedeño quotes - 7 Jul 2026
vLex - Law 540 record: 2 Jul 2026, Gaceta 30560, published 3 Jul 2026