FDI in figures

Panama enjoys good financial and investment freedom.  Commercial undertakings are generally subject to clear rules.  The rate of taxation for individuals and for companies is moderate.  The law stimulates foreign capital investment and only imposes minor restrictions.  Panama is an important financial player in the Americas region.  There are significant customs and tax advantages in the free-trade zone of Colon (ZLC).

Why you should choose to invest in Panama

Strong points

Panama's strength in the investment area:

1. Political stability - The country represents an economic center protected by the United States.

2) Economic Stability - Annual inflation of 2%. - Growth in 2007 of 11.3% - No devaluation as the currency is the American dollar

3. Reduced taxes - Real estate transfer tax at 0% for a first purchase and up to 2.5% for subsequent purchases. - VAT (IVA) of 0% in the real estate sector.

4. Ease of credit - Mortgages for up to 30 years (proof of confidence in the banking system and the country's future). - Possibility of obtaining credit of up to 80% of the property's value.

5. Significant development in the real estate sector - A big volume of new constructions for all types in the social sectors. - Foreign investor demand growth.

6. Ease of tourism projects creation - Tourism market underdeveloped - Tax exemption

7. Ease of manufacturing industry creation - Tax exemption

Weak points

Panama has some weak points regarding property rights, freedom of work and corruption.  The judicial system is very slow, does not commit itself to the execution of contracts and is subject to political interference.  There is significant corruption in the magistracy and public office.

Government measures to motivate or restrict FDI

The Panamanian government and the business world actively encourages direct foreign investment.  The laws do not generally distinguish between national and foreign companies.  In 1998, the government enacted a law of investement 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 encouraged multinational companies to open their regional head offices in Panama through a variety of tax incentives.

Procedures relative to foreign investment

Freedom of establishment

Guaranteed

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.

Finding assistance for further information

Investment aid agency

Invest in Panama