Panama, Invesment Grade

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The Republic of Panama was recently awarded the "investment grade rating on its debt" by the rating agency Standard & Poor's, which adds to that previously awarded by Fitch, thus becoming a stable and growing country and generating a lot of confidence among investors.

The country has a sound growth record with a promising outlook for investments. The benefits and level of development that Panama offers to multinational corporations are more than encouraging.

Among other aspects, there are laws that provide immigration, labor and tax incentives, such as special arrangements and provisions for the establishment of Multinational Companies’ Regional
Headquarters (SEM) that perform operations for its subsidiaries and handle operation, logistics and financial management services.

The special regime for the establishment and operation of Export Processing Zones (EPZs) is focused on companies whose business is the production of goods and services for export. The Special Economic Area Panama-Pacifico has been designed as a high-tech manufacturing, logistics and service center for world trade.

Simple and quick processes have been put in place to promote the development of tourism activities in the country by adopting mechanisms to coordinate activities between the public and private sector in the area of tourism.

The Colon Free Zone, focused on the global distribution of goods with high levels of efficiency and competitiveness, is the most important one in the Western Hemisphere. The national government plans to develop public infrastructure projects such as the Metro system in the City of Panama and the expansion of the Tocumen International Airport and other airports in the cities of Colon and David.

In addition to the incentives provided by this legislation, macroeconomic and social stability with a solid performance of public finances and a dynamic international financial center provide excellent connectivity thanks to the country’s privileged geographical position on which a unique logistics platform is being developed. The Canal is a gateway to 144 maritime routes and 80 countries, and its expansion project will enhance trade capacity, making Panama a solid country for investment.

One system that manages information about marketing, linking available supply and aggregate demand, and that makes it easier for exporters by providing the necessary tools to conduct business successfully in the global market is the "One Stop Shop", designed to identify and turn to account various tools available for attracting Foreign Direct Investments. It also allows you to leverage the advantages of free trade agreements signed or negotiated with our major trading partners. It also acts as a “Concierge” service for investors, with a professional and experienced team that handles the language of business and follows up on each investment project at all stages.

Some of the Public Infrastructure projects in Panama include building a governmental city, which involves the physical centralization of key government institutions in a specific geographical area, the construction of a cold chain throughout the country that will allow to enhance production and transport products to final destinations with the highest quality and minimal shrinkage, and the construction of an irrigation system to maximize the use of land and reduce the production costs.

ABOUT THE AUTHOR: Rodrigo Julio Molina Ortega
The law firm MOLINA & Co., offers services relating to civil, administrative, maritime, commercial, banking, general and corporation matters within and outside of Panama, serving customers with honesty and top efficiency and professionalism.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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