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flag Panama Panama: Investing

In this page: FDI in Figures | Why You Should Choose to Invest in Panama | Procedures Relative to Foreign Investment | Investment Opportunities


FDI in Figures

In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.

Panama is the first recipient of FDI in Central America with an annual average of USD 1.75 billion of FDI flows between 2004 and 2009. Despite the slowdown observed in 2009 due to the bad international situation, the FDI flows started to rise again in 2010 and they should maintain their dynamic growth. In 2013 FDI influx into the country reached over USD 3 billion. This good performance is due to the advantageous regulations for FDI and the incentive measures that the country has adopted in 2011.

Panama benefits of good financial and investment freedoms; commercial operations are, in general, subject to transparent rules; the tax rates for individuals and for companies are moderate; there are significant customs and tax advantages in the Colon Free-Trade Zone (CFZ).  The strategic geographical location of the country, its dollarized economy and its economic specialization in the strategic sectors (banking, maritime traffic) are some of the many factors that attract FDI.

Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).


Country Comparison For the Protection of Investors

  Panama Latin America & Caribbean United States Germany
Index of Transaction Transparency* 3.0 4.0 7.0 5.0
Index of Manager’s Responsibility** 4.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 6.0 9.0 5.0
Index of Investor Protection**** 5.3 5.0 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 3,1322,8874,651
FDI Stock (million USD) 23,87526,76231,413
Performance Index*, Ranking on 181 Economies 18--
Potential Index**, Ranking on 177 Economies 85--
Number of Greenfield Investments*** 432030
FDI Inwards (in % of GFCF****) 38.328.941.8
FDI Stock (in % of GDP) 76.273.877.9

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Panama

Strong Points
Panama's strong points are:
- Its political stability. The country is "protected" by the United States;
- Its economic stability. Inflation level is maintained at 2% and the country does not carry any devaluation since its currency is in parity to USD;
- Reduced taxes, with a 0% value added tax (VAT) in the real estate sector;
- Credit facilities: Mortgages up to 30 years; credit can be up to 80% of the real estate's value;
- Large development of the real estate sector with new constructions;
- Easy process to develop tourism projects with significant tax exemptions;
- Easy process to create and develop manufacturing industries.
Weak Points
Panama has some weak points, especially:
- Irregularities concerning property rights;
- Freedom of non guaranteed work;
- A high level of corruption, notably in the public administration;
- A slow judicial system.
Government Measures to Motivate or Restrict FDI
The Panamanian government and the business milieu actively encourage direct foreign investment. In general, the laws do not make any difference between national and foreign companies. In 1998, the government enacted a law of investment stability, which guarantees foreign investors who invest at least two million dollars in Panama, equal treatment by virtue of the law and not by their domestic competitors. By virtue of law No. 41 of 2007, Panama has encouraged multinational companies to open their regional headquarters on its territory through a variety of different tax incentives.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Acquisition of Holdings
Majority holding interest in the capital of a company in Panama is legal. However, all foreign investors must obtain a work permit from the Ministry of Employment.
Obligation to Declare
The foreign investment promotion agency in the country enables one to be informed of the authorizations required to set up.
Competent Organization For the Declaration
Panama Chamber of Commerce (Spanish only)
Requests For Specific Authorizations
Some importation conditions (e.g. imports exempt of custom duty) or certain merchandise requires prior authorization from relevant Ministries.  Amongst the merchandise, preliminary formalities specifically relate to equipment for the oil industry, household appliances, cars and naturally, products for human consumption for which one needs to obtain different registrations, in addition to a sanitary registration.

Learn more about Foreign Investment in Panama on, the Directory for International Trade Service Providers.

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Investment Opportunities

Investment Aid Agency
Invest in Panama
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Panama
Inter-American Development Bank, Tenders in South America
Globaltenders, Tenders & Projects from Panama
DgMarket, Tenders Worldwide

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Learn more about Investing in Panama on, the Directory for International Trade Service Providers.

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Last Updates: October 2014