Panama Investments

Panama City

Panama is an excellent place to invest in. Historically, the country has been a crossroad of trade for the Americas due to its strategic location at that links of two oceans. Panama is currently not only maritime shipping and air transport hub, but also an international trading, banking, and services center.

Trade liberalization and privatization over the last several years, along with the regional movement toward Free Trade Agreements, while still in progress, will inevitably increase Panama's global, regional and sub-regional prominence. Panama's dollar-based economy offers low inflation and zero foreign exchange risk. Its legal and regulatory regimes are business friendly. Its government is stable, democratic, reform minded and actively seeks foreign investment in all sectors, especially services, tourism and retirement properties.

Panama's economy is based primarily on a well-developed services sector, accounting for about 80% of its GDP. Services include the Panama Canal, banking, the Colón Free Zone, insurance, container ports, and flagship registry. Manufacturing and mining account for roughly 14 % of the GDP. In a national referendum in 2006, Panamanians approved the $5.25 billion project to expand the capacity of the Panama Canal to accommodate the new mega ships. This project, in conjunction with the expansion of its port capacities on both the Atlantic and Pacific coasts, will solidify Panama’s unique global logistical advantage. All of these initiatives will generate enormous requirements for technology, goods and services. Participation is expected to be global and competition fierce. Panama has potential for substantial growth in the areas of electric power generation, health care services, port services, land development, road construction, water distribution and purification, telecommunications, tourism, and many others.

The Colon Free Zone (CFZ) is the second world largest free trade zone, importing and re-exporting over $14 billion worth of goods annually. It is a vital trading and transshipment center serving the region and the world. Goods arrive from all over the globe to be resold, repackaged, and reshipped. The CFZ offers U.S. exporters a unique entry point for the entire region. Firms sell their products to “traders” in the CFZ who then ship the products to a variety of other countries via their developed network of distributors.

Consumer attitudes and many brand preferences are similar to the U.S. American television, radio and U.S. magazines are all available and popular in Panama. Panamanians frequently travel to the U.S. for vacation, medical treatment, study and business. 

U.S. goods and services enjoy a reputation for high quality and are highly competitive. Panama boasts the highest per capita GDP in the region at around US$ 4,300 (2006).

Panama is on record as being in favor of free trade agreements, and recently signed a bilateral Trade Promotion Agreement (TPA) with the U.S. Due to its open economy; Panama has no market access problems. One of the most common market entry options is to appoint an agent or distributor. Another option is to find a local partner who can provide market knowledge and contacts. Other businesses have been successful via licenses or franchises.

Panama has recorded one of the highest economic growth rates in the region (above 8% during the last two years). Major projects expected to continue fueling the growth of the economy during the next 15 years.