Doing business in Panama
Panama, known as the land that represents nature’s most beautiful, with its exotic species of birds, sea life, flowers and fauna that have blessed this country. The lovely climate, location and the inseparable Panama Canal have added to the country’s bounty. Panama is a Spanish speaking, Central American country, situated on the Isthmus that links Central and South America.
Panama’s strategic location, a bridge between two oceans, has ensured that the nation emerges as an ideal maritime and air transport hub and trade, transport, banking and services destination.
Panama is improving on its global standing with trade liberalization and privatization policy. Its increasing participation in free trade agreements makes it a prominent country in the hemisphere. Moreover, Panama’s dollar-based economy means low inflation and zero foreign exchange risk compared to neighboring countries. Panama has a stable and democratic government that actively encourages foreign investment in all sectors. More so in services such as tourism and retirement properties.
Recent trade freedom and privatisation, and the expansion of the Panama Canal are urging Panama to get further into the global spotlight as a potential business and international trade location.
Economic parameters of Panama as of 2014
|GDP (billion USD)||52|
|GDP per capita (USD)||13,680|
|GDP per capita PPP (USD)||23,015|
|Purchasing power per dollar, compared to the USA||175%|
|Surface area (sq km)||75,420|
|% of population living in urban areas||66%|
|Ease of doing business index (1 = best, 189 = lowest)||52|
What is Panama’s business index and trading indicator?
Panama ranks 36th out of 189, for ease in starting a business. In trading, not surprisingly, it ranks 8th.
Business opportunities in Panama
- Maritime industry
- Clean energy
- Maritime industry
- Electricity generation and distribution
What is the most important aspect of Panama’s trade?
The Panama Canal is an integral component in the larger scheme of global trade. Trade activities along the canal contribute almost 10% to Panama’s economy each year and expected to earn more post the reconstruction and expansion.
The Colon Free Trade Zone situated on Panama’s banks is the second largest free port in the world. Plus, there’s the Trans-Panama pipeline that enables the transport of crude oil between the Atlantic and Pacific coasts. This heavy activity has enabled the growth of additional industries in Panama such as logistics, storage, banking and insurance.
Though the official currency of Panama is Balboa, the US Dollar is legally used in Panama in day-to-day transactions. Therefore, Panama is the second dollarized economy in the continent.
Panama’s political framework
The republic of Panama is a constitutional democracy. The President and Vice President are elected as per majority vote for a tenure of 5 years. The next elections will take place in 2019.
Panama welcomes the world to invest and trade!
Panama plays host to a few select trade shows, pertaining mainly to the shipping, auto and port technology divisions.
It boasts of the strongest economy in Latin America. The trade and open market initiatives offer this country a noteworthy spot in the global business scenario.
Panama expresses obvious openness to foreign investment, allowing local rights to investments exceeding US$2 million. Also, the recent influx of multinationals setting up their regional headquarters in Panama is a result of the policy to allow 100 % foreign ownership. Coincidentally, Panama is offering numerous tax incentives for such organisations. These moves and announcements reflect a confident, ambitious and hospitable attitude towards progress and development in export plan, confirming Panama’s position as a key trade partner.