BUSINESS AS USUAL
After establishing itself as a key hub for business and investment, Panama is laying the groundwork for greater growth with the expansion of the Panama Canal.
Largely known for being the hub of the Americas, its canal, and its ease of doing business, Panama continues to go from strength to strength. The country jumped an impressive eight spots in the World Economic Forum's Global Competitiveness Report 2016-2017, moving up from 50 to 42 out of a total of 138 countries. It is second only to Chile in the region (ranked 33rd) and leads Latin America in terms of its macroeconomic environment, the efficiency of its goods market, its financial market development, and level of business sophistication. Among the advantages of doing business in Panama, respondents from the World Bank's Executive Opinion Survey cited its foreign currency regulations, stable government, the lack of inflation, and stable policies as the top factors, while corruption, inefficient government bureaucracy, and an inadequately educated workforce were cited as the top issues facing businesses there. Indeed, Panama has much to do to improve its reputation in the wake of the Panama Papers and Waked scandals.
The country was largely built upon the tenets of international trade and commerce, business-friendly initiatives, and a growing reputation as the region's business hub, and it continues to enhance its global and regional prominence though trade liberalization and free trade agreements (it can also add double taxation treaties to that list thanks to recent efforts). The vast majority of its economic activity—almost 80% of GDP—is based on its services sector, which includes the canal, activities in the Colón Free Trade Zone, banking, container ports, and flagship registry. With the completion of the USD5.25 billion expansion of the canal in 2016, it has become more viable to ship cargo from Asia directly to the east coast of the US instead of the west coast. In addition, Panama has had to introduce better container handling, truck scheduling, and container sequencing to minimize wait times and cost. With the increase in shipping volumes, more and larger cargo will almost certainly jumpstart economic activity in the maritime sectors as well as in logistics, infrastructure, services, energy, and tourism. The expansion of the canal has also benefited the country's Colón Free Zone (CFZ), a key trading and transshipment center serving the region and the world that resells, repackages, and reships imports from around the world to regional markets. It is the second-largest free zone in the world, there are over 2,000 companies either represented or operating in CFZ, and 92% of Panama's exports and 64% of its imports—estimated to be worth USD20 billion—go through the zone annually. Tocumen Airport is Panama's main airport and the largest transfer hub in the region, where major airlines serve 73 destinations in 30 countries, with the number of direct flights growing every day. The main Panamanian airline, Copa Airlines, offers about 355 flights to 69 destinations in North, Central, and South America, and the Caribbean.
Panama is heavily dependent on foreign investment, and the government actively promotes Panama as a first-rate place to do business in, working hard to ensure the investment process is smooth and attractive for investors. There are almost no distinctions between domestic and foreign companies for investment purposes, and there is support and advice provided at all stages of the process of opening an office in the country. Establishing an office in Panama is a straightforward process, as its legal framework is one of the most modern and flexible in Latin America. Laws were also recently enacted to make it easier for foreigners to relocate to Panama. There are numerous tax advantages for international businesses located there, and more than 400,000 companies are registered in Panama. The country's low crime rate, tropical climate, modest personal tax rates, and competitive educational and healthcare systems also make Panama an attractive destination for expatriate executives, particularly those with families.
BUSINESS AS USUAL
TABLE OF CONTENTS
Review
A Huge Foot in Both Worlds
Although Panama's place in the sun is all but guaranteed by the extension of the canal, the isthmus nation will still have to toe a fine line in assuaging the world over the transparency of its financial dealings.Happily, it seems to be making significant progress.
read articleInterview
Saint Malo de Alvarado, Vice President, Republic and Minister of Foreign Affairs
TBY talks to Isabel de Saint Malo de Alvarado, Vice President of the Republic and Minister of Foreign Affairs, on the historic significance of the Summit of the Americas and initiatives to boost Panama's competitiveness.
read articleGuest Speaker
The Most Honourable Andrew Holness, Prime Minister , Jamaica
TBY talks to The Most Honourable Andrew Holness, Prime Minister of Jamaica, on the potential to boost cooperation between the Caribbean and South America, learning from the success story of the Panama Canal, and further areas of growth.
read articleInterview
Miguel Ángel Esbrí, National Secretary, Competitiveness & Logistics Secretariat
TBY talks to Miguel Ángel Esbrí, National Secretary of the Competitiveness & Logistics Secretariat, on becoming the best place to do business in Latin America, growing GDP by 50%, and boosting Panama's nascent tech sector.
read articleInterview
Alberto A. Alemán A., Director, PROINVEX
TBY talks to Alberto A. Alemán A., Director of PROINVEX, on the transformation from services to innovation, meeting the needs of an evolving global economy, and honing what makes Panama tick as a unique part of the global commercial food chain.
read articleInterview
Jorge García Icaza, President of the Chamber of Commerce, Industries, and Agriculture , Panama
TBY talks to Jorge García Icaza, President of the Chamber of Commerce, Industries, and Agriculture of Panama, on eliminating bureaucracy, boosting trans-continental and value-adding shipping, and smartening the public sector.
read articleInterview
Roberto Forte Taylor, Director, Panama Green Building Council (PGBC)
TBY talks to Roberto Forte Taylor, Director of the Panama Green Building Council (PGBC), on how to multiply green construction projects, developing a comprehensive eco-protocol, and how to bring a new green Panama into existence.
read articleInterview
Dulcidio de la Guardia, Minister, Economy and Finance
TBY talks to Dulcidio de la Guardia, Minister of Economy and Finance, on increasing transparency, meeting the highest international standards, and supporting the government's commitment to accountability and citizen participation.
read articleInterview
Eli Faskha, General Manager, Soluciones Seguras & President of the Panamanian Chamber of Technology (CAPATEC)
TBY talks to Eli Faskha, General Manager of Soluciones Seguras & President of the Panamanian Chamber of Technology (CAPATEC), on his strategy to expand regionally and areas of opportunity.
read articleInterview
Luis Garuz Berenguer, Business Development Manager, Quality Freight Corp.
TBY talks to Luis Garuz Berenguer, Business Development Manager of Quality Freight Corp., on the benefits of being based in Costa del Este, the impact of the expanded canal, and the company's competitive advantages.
read articleInterview
Jorge Barakat Pitty, Minister, Maritime Affairs of the Panama Maritime Authority (AMP)
TBY talks to Jorge Barakat Pitty, Minister of Maritime Affairs of the Panama Maritime Authority (AMP), on facilitating maritime trade in the country, the importance of developing human resources, and its collaboration with the Port of Hamburg.
read articleInterview
Miguel A. Lohse Muñoz, Operations Manager , Intercoastal Marine Inc. (IMI)
TBY talks to Miguel A. Lohse Muñoz, Operations Manager of Intercoastal Marine Inc. (IMI), on the new development opportunities in the country, developing business in the energy segment, and regional growth potential.
read articleInterview
Paul Wallace, Executive President , Panama Ports Company (PPC), Hutchinson Ports
TBY talks to Paul Wallace, Executive President of Panama Ports Company (PPC), Hutchinson Ports, on the consequences of canal expansion, adding value in logistics, and future priorities for the company.
read articleInterview
Juan Carlos Croston, Vice President Marketing & Corporate Affairs , Manzanillo International Terminal-Panama (MIT-Panama)
TBY talks to Juan Carlos Croston, Vice President Marketing & Corporate Affairs of Manzanillo International Terminal-Panama (MIT-Panama), on creating capacity when volumes are down, its CSR initiatives in Colón, and future goals.
read articleReview
A Watershed Moment
With 50% of Panama's land used for agriculture, it is little wonder the sector is essential to the country's economy. However, in recent years, Panama's farmers have witnessed reduced output and exports of agriculture products. Whether the country can turn its agricultural fate around depends on the state's management of resources and regulations.
read articleInterview
Marcela Paredes de Vásquez, Minister, Education
TBY talks to Marcela Paredes de Vásquez, Minister of Education, on the importance of monitoring and benchmarking the education sector, language exchange partnerships, and creating a new generation of Panamanians qualified to power growth.
read articleInterview
Jennifer Champsaur,, Deputy Director , Tourism Authority of Panama (ATP)
TBY talks to Jennifer Champsaur, Deputy Director of the Tourism Authority of Panama (ATP), on the importance of MICE tourism, opportunities within niche sectors, and the expansion of infrastructure to support further growth.
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