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Investment Climate in Panama

May 2013

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Panama actively encourages foreign investment, and with few exceptions, the Government of Panama (GOP) makes no distinction between domestic and foreign companies for investment purposes. Panama continues to enjoy the strongest economic growth in Latin America. It benefits from stable and consistent economic policies and a government that consistently supports trade and open markets. In 2013, the economy is expected to continue to be one of the fastest growing in the world with predicted growth of 7.5% following expansion of 10.6% in 2012, and 10.5% in 2011. In 2012, Moody’s raised Panama’s sovereign debt rating to Baa2 and improved their outlook for Panama from “stable” to “positive”. Panama’s sovereign debt is also rated as investment grade by Fitch (BBB rating) and Standard & Poor’s (BBB rating). The October 2012 entry into force of the U.S.-Panama Trade Promotion Agreement (TPA) provides a new set of opportunities for U.S. businesses interested in investing or exporting to Panama.

While international indices generally rate Panama as one of the best countries in Latin America for business and investment, poor rule of law, lack of judicial independence, a shortage of skilled workers, high levels of corruption, and poorly staffed government institutions all add risk and complication to business dealings. The U.S. Government has received numerous reports of fraud and corruption in connection with titles to property purchased by U.S. investors, in addition to complaints from some large investors and potential exporters about inconsistent treatment of their concessions and the lack of transparency in government procurement processes. In addition, upcoming national elections in 2014 have added an element of political uncertainty. For these reasons we encourage U.S. companies interested in investing in Panama to read thoroughly the in-depth report on Investment Climate published here and to contact us for more information.

For More Information

The U.S. Commercial Service in Panama can be contacted via e-mail at: enrique.tellez@trade.gov;

Phone: 011-507-317-5080; or our website: www.export.gov/panama.