Panama as a business location

Here you find general information about Panama, the country, the people, economy and infrastructure. For more information go to the web or click on “Panama links”.

General information on Panama

Economy

Panama is a market with guaranteed property by law. Since 100 years Panama offers a very stable basis for economical activities. As a natural bridge between the two American subcontinents and the Atlantic and Pacific Ocean (Canal), Panama is considered as a country of Transit. The service sector is the main sector.

The economical development in Panama is outstanding in comparison to other Latin American countries and the Canal has a main significance for the global economy. The international community has a strong interest in the political and economical stability of the country, especially the geostrategical interests of the US provide a stable basis for investments. In over 100 years of Panamanian history no political events have been reported that could have affected the economy.

Over 100 major banks from all over the world offer their services in Panama. Panama, Switzerland and the United Kingdom signed an investment protection agreement, which secures productive cash flow into the country.

Panama has a high security standard in comparison to other countries and the population that lives under poverty conditions decreased in the last ten years, which also guarantees more political and social stability.

Foreign Business
Panama has traditionally a trade balance that is balanced by service export and capital import, for example by benefits through the usage of the Canal – 2003: 200 Mill. US$ from a total of 690 Mil. US$ went into the treasury – or the Free Trade Zone in Colon, where the re-export of goods in the year 2003 of 4.5 Bill. US$ had a share of nearly 10% on the gross domestic product. On the other hand the service tax recovery goes towards zero. Exports of goods and services in the amount of 6.52 billions US$ were confronted with importations of 7.06 billion US$ in the year 2002. The most important trade partners are the US and the regional neighbours Costa Rica and Nicaragua. Traditionally traded goods like bananas, coffee and fishing products show the greatest percentage.

Reliability/Stability of Currency
The national Panamanian currency „Balboa“ only exists as coins. Since the existence of Panama as a State the US Dollar counts as official and legal currency. Based on the total dependence of the dollar in economy, the Panamanian government has no possibilities to have independent currency and credit policies. The risk of inflation is minimal. Due to the acceptance of the dollar as a legal currency, there are no exchange rate risks. In order to prevent money washing, transactions over 10,000 US$ in cash as well as other liquid payment forms (checks, change, etc.) on the part of the banks and in the entry into the country have to be reported.

Labor forces and salaries
Panama counts with a high potential of well educated, sometimes bilingual employees (Spanish and English). The rate of literacy is 90 % and very high in comparison with other Latin American countries.

Minimum salary:
Countryside US$ 0.85 per hour
Panama and Colon US$ 1.20 per hour

Logistic Infrastructure
The international airport Tocumen connects Panama to nearly all countries in Latin America, the Caribbean, the US and some European countries. The Canal counts with to main ports on each side, Balboa on the Pacific entry and Cristobal on the Atlantic entry. Close to the Free Trading Zone in Colon on the Atlantic coast there are 2 more Cargo ports (Manzanillo International Terminal, 200.000 Containers per year).