Panama has actively sought to attract foreign investment and promote entrepreneurship, leveraging its strategic geographic location, trade openness, and world-class infrastructure. The country’s prolonged investment boom has been underpinned by its geographic location, trade openness, world-class ports and airport, logistics operations, and financial system depth, all of which have benefited from globalization. Panama has expanded and diversified its productive capacity, and the government has actively sought to combat money-laundering and has a stable, democratic administration that actively seeks foreign investment. The government has actively sought to boost productivity and attract high levels of investment by improving the business environment, fostering innovation, and reducing institutional vulnerabilities. Panama’s dollar-based economy, low inflation, and zero foreign exchange risk have further enhanced its appeal as a global financial and trade center.
In recent years, Panama has made significant efforts to attract and mobilize high-quality investment, focusing mainly on boosting participation in the international economy. The country has enacted a list of laws that provide attractive incentives for domestic and foreign investment in various sectors, including the energy sector. Panama is open to foreign investment and does not discriminate against foreign investors, even when there are some restrictions for the exercise of retail activities. The government’s attitude towards foreign investment has been positive, and it has actively sought to create an attractive investment climate by enacting laws that provide incentives for domestic and foreign investment.
Despite its small market, Panama’s strategic location and the presence of the Panama Canal have made it an attractive destination for foreign investment. The country’s economic recovery from the COVID-19 pandemic is outpacing most other countries in the region, with a 10.8 percent GDP growth rate in 2022. However, Panama’s investment climate is weighed down by structural deficiencies, including high levels of corruption, a poorly educated workforce, a weak judicial system, and labor unrest. The government has actively sought to address these challenges and create an attractive investment climate by enacting laws that provide incentives for domestic and foreign investment.