Looters ransacked shops and stoned vehicles in Panama City on Friday following protests outside the Congress against a law that permits the sale of public lands in a duty-free zone.
Police used tear gas against protesters who rampaged even though Panama's president has promised to repeal the law.
The violence resulted in more than 200 arrests in Panama City and Colon, the northern city where the duty-free zone is located. Eleven people -- a mix of protesters and police -- were hurt, authorities said.
Protests first started last week when President Ricardo Martinelli signed the law. A total of three people have died in the violence, and around 50 have been hurt.
Dozens of hooded assailants stormed through the streets around the capitol building Friday, attacking congressional guards and smashing store windows and parked vehicles with stones.
Local television showed images of looters making off with television sets, sound equipment, appliances and alcoholic beverages.
The eruption of violence followed a protest by members of a construction union against the new law.
Heavily armed police intervened after a half-hour of chaos, making mass arrests to restore order.
"We are concerned by the turn that this situation is taking," Irving Hallman, head of Panama's chamber of commerce, said in a television interview.
"There is no justification for vandalism by those who are trying to take advantage of the situation."
Protests have flared since 19 October when Martinelli signed a law allowing the sale of public lands in the free trade area in the city of Colon.
Three people were killed in the first eruption of violent protests in Colon immediately after the law was signed, and the city has been paralysed by strikes since then.
Protests have also spread to Panama City and the border area with Costa Rica.
Martinelli, who was flying home from a trip to Asia, promised in a Twitter message Friday to introduce a bill repealing the land sale law in its entirety.
"The law sought the best for Colon but it had little acceptance. We will proceed with its definitive repeal. We want peace and tranquility for all," he wrote.