Invest in Panama

Courtesy of Republic of Panama - Business, the Economy and the Canal

A Must See Learn about Panama's progressive economy, Panama Canal, Colon Free Trade Zone, Financial Banking Sector, Real Estate, weather, retirement, hotels and much more.

Panama experienced an economic growth of 6.3% in 2006 and the same upward trend for 2007 is forecasted by the International Monetary Fund. Panama has witnesses this continued growth for the past five-year and there is no sign of slowing down.

Panama is in a very privileged position with a historically stable and strong economy in Latin America, low inflation in part due to a currency pegged to the U.S. dollar, a stable democracy, geography, the Panama Canal, and the growing tourism and commercial industries, Panama is set to be the next driving force in the region.

Market Factors

Dollar in Panama

The dollar is the official currency of Panama and it has maintained a constant presence in the banking sector as well. This has propelled the country to integrate and position itself as a key player in Central America and the global financial markets. The dollar, also known as the Balboa in Panama, has helped the country experience an extremely low inflation rate of less than 2 percent for the past 40 years – an extraordinary feat that only a handful of countries in the world could claim.

Business in Panama

Business and commerce is a key partner to the nation. This has led to the integration of laws that promote and encourage growth and development in a stable and legal transparent economy. Panama is known to have one of the most favorable environments for investment.

The Investment Stability Law enacted in 1998, provides the same equal protection to foreign investor as if they are citizens, and it imposes no restrictions on the entry and exit of capital from Panama.

Panamanian assets and its banking sector provide protection against devaluations due to the permanent presence of the dollar. Moody’s and S&P have given Panamanian bonds their highest ratings, and the PRS Group classifies Panama in the top 3 countries in the hemisphere with greatest rating in investment vs. risk.

Tourism in Panama

For a little over a decade now, the tourism industry has represented a significant percentage of Panama’s growth and economy. Tourism has grown at a rate of 150% than the national GDP without showing any future signs of slowing down. For 2005, tourism represented between 15-20% of GDP.  Panama's Tourism has been actively promoted by the Institute of Panamenian Tourism or commonly known as IPAT. 

With over 700,000 visitors arriving annually, tourism in Panama is now the country’s top source of revenue and this influx is having a direct impact on the construction sector ranging from hotels, resorts, and condos to the service-based industries including restaurants and shops.

The Panamanian Government

The political arena is structured very similar to the U.S. with regards to its 3 branches in the executive, legislative and judicial arenas. This has led to a stable democracy and freedom in Panama which over the decades has resulted in a safe country to live and retire. The Pinkerton Global Intelligence categorized Panama with the highest rating for tourist safety.

Since 1997, Panama has been a member of the World trade Organization and Caribbean States Association with multiple bilateral agreements signed promoting investment protection and promotion with thriving economies in the Americas, Europe and Asia. It is a member of other international organizations such as the International Private Investment Corporate of the U.S. and Promotion Andean Corporation.

Panama has been active in the implementation of economic and social development treaties promoting foreign investment and facilitating the development and opening of markets for the progress of commercial trade.

Panama's International Credibility

Due to Panama’s increasing role in international business, prestigious financial firms have given favorable ratings including Standard & Poors, Morgan Stanely, Bear Sterns, and Moody’s. The Fraser Institute classified Panama as the second country in Latin America with the most economic freedom and first in access to solid money. And it has been labeled as “the most globalized country in Latin America” by A.T. Kearney and the Foreign Policy Magazine.

All over the world, Panama is increasingly solidifying its reputation as a key international player.

Free Trade Zone in Colon, Panama

Colon is the main port for the importation and exportation of goods. Established in 1948, it is the principal free trade zone of the Western Hemisphere and it is the second largest in the world after Hong Kong.

Colon is an important distribution center where products from all over the world can be imported, stored, modified, distributed, processed, assembled, repackaged and re-exported without paying custom fees and taxes.

More than 1,800 companies have installed themselves in the Free Zone resulting in approximately 11 billion dollars per year in transactions. In large part, Panama provides a geographical strategic location, storage, infrastructure, financial stability and tax exemptions.

International Financial Center

The International Financial Center is comprised of 74 internationally renowned banks from more than 35 countries providing a complete portfolio of financial and banking services without restrictions on capital transfers.

It is a progressive, modern and prepared financial centers for the continuing globalization occurring today and it is the only one in the region which is why Panama is considered the Switzerland of Latin America.

The openness, privacy and friendly business laws should not be misrepresented as lax. The government has been progressive in enacting laws to prevent financial crises, bankruptcies and money laundering or other illegitimate creation of funds. The financial market is continually adopting banking instruments for continual growth, new mechanisms to reduce systematic risks, and prudent regulation and supervision of banks where all new legal, institutions and administrative arrangement will positively affect the International Financial center in the areas of efficiency, solidity, credibility and reputation.

Infrastructure in Panama

Panama is a progressive maritime nation with ports in the both the Atlantic and Pacific that comprises of International terminals, container terminals, port terminals, cruise terminals and a maritime industrial park.

Since 1999, when the Panama Canal was transferred from U.S. based operations to Panama, 364,000 acres and 4,000 installations were turned over to the nation. The government established the Interoceanic Region Authority (ARI) to devise development strategies for the continued growth of these resources towards economic and social goals. These areas of future development include manufacturing, assembly, tourism, marine services, warehousing, education, research, and energy creation. Currently, the Howard base is being positioned to be an international hub for air cargo, and aircraft repair and maintenance.

Panama has 27 public and 41 private airports. Five airports are equipped with immigration and customs services. These include the Tocumen International Airport (primary international airport) and Marcos A. Gelabert which primarily provides domestic services and international flights in a smaller scale.

Panama plans to further develop and renovate three other airports including the former Howard Air Force base which will a center for international air freight, another airport near the tourist area of Farallon, and a final in the Atlantic area near Colon’s free zone.

The interoceanic railroad that runs parallel to the canal was recently rebuilt by companies from the USA with an investment of $75 million. It mobilizes freight and passengers from the Atlantic and Pacific in 45 minutes.

The Panama Canal has been the epitome of the maritime industry in the Western Hemisphere. With approximately 13,000 vessels transiting every year, Panama has become a first-class commercial center together with its Free Zone. Since 1914, more than 874,000 vessels have transited carrying over 5 billion metric tons of cargo to the world. It generates approximately over half a billion annually.

Currently, the Canal is undergoing an expansion and modernization that is amounting to billions of dollars in investment. Its guaranteed safety and efficient operations ensures that it will stay competitive a global cost-efficient route for decades to come.