One of Panama’s consistent attractions has been the safety for foreign investors. Its stable, dollar economy with low inflation and consistent growth has been one of the key reasons private investors and multinationals alike have chosen to invest in Panama.
Trade, services, banking, real estate, tourism, manufacturing, transportation logistics, communication technologies, and many other sectors have found Panama offers them the best advantages for business.
Indeed, more than $5.13 billion in Direct Foreign Investment entered the country from 1997-2003, despite the slight economic slump following the 1999 withdrawal of U.S. forces and personnel after handing over control of the Canal.
Beyond a generally positive economic climate, however, there are direct protections for foreign investment, in the form of legislation to safeguard and attract outside capital.
The Panamanian Constitution:
- Guarantees private property, freedom of investment
Real Estate Law 54 of 1998:
- Guarantees equal treatment of foreign and national investors
- Provides stable tax regimes
- Guarantees the repatriation of capital, profits, dividends, etc.
Law 33 of 2000:
- Offers a special tax regime for micro, small and medium businesses
Foreign investors enjoy the same constitutional rights as residents to private, intellectual and industrial property, and with few exceptions, can own property and do business in Panama. There are laws that grant equal treatment for foreign and national investors, provide stable tax regimes, guarantee the repatriation of capital, profits, dividends, etc, and offer tax exemptions and preferential interest rates.
There are also trade agreements in place that govern the benefits and conditions of investing in Panama, such as the Multilateral Investment Guarantee to promote and protect investments.
A Free Trade Agreement is currently under negotiations with the United States, which if approved would provide even greater fairness for U.S. investors in Panama. Currently, U.S. foreign direct investment in Panama totals some $25 billion.
Nearly half of Panama’s total imports come from the United States, and it’s believed a Free Trade Agreement will help to further stimulate Panama’s economic growth and development.