Investing in Panama - International Credibility

February 16, 2004

Panama has long had a open doors policy towards foreign investment and aggregate foreign direct investments during the period 1996-2001 reached approximately US$3.5 billion, a significant amount, despite the economic crisis experienced during 2000-2002.

Panama has long provided several important incentives for foreign investors, including 

  • US dollar-based economy
  • Low inflation and zero foreign exchange risk
  • Total absence of exchange controls
  • Equal treatment of foreign and local citizens
  • One of the most flexible company laws in the world
  • No restrictions on 100 per cent foreign-owned companies
  • No restrictions on mergers, acquisitions or joint ventures
  • Excellent tax holidays for specific investments in sectors such as tourism, maritime, real estate, mining,
  • Colon Free Zone, exports and others
  • High percentage of labor force is bilingual
  • Panama has been ranked first in the region for low cost of living, operational cost and index of labor by the Tripartite Committee, which consists of the Economic Commission for Latin America and the Caribbean (ECLAC), the Organization of American States (OAS) and the Interamerican Development Bank (IDB).

Panama has full coverage from OPIC, MIGA, IDB and other multilateral entities.

Political Risk Services (PRS) placed Panama in the top three countries of the hemisphere with the best risk-investment qualifications. Moody's and Standard & Poors have both granted high ranking to Panamanian bonds.

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