Many people are surprised when they arrive in Panama. In the minds of many, Panama is still considered as a developing country. Therefore, it can be quite surprising for some people when they visit Panama City. Once arriving, visitors are met with modern architecture, towering skyscrapers, and state-of-the-art hospitals. The constant construction, shiny new apartment buildings, and bustling business district all suggest that the economic growth of Panama continues to be strong. In fact, Panama’s economy is one of the most competitive in Latin America. The stable growth and stunning skyline have led many to call Panama the next Singapore.
Panama City Skyline
While Panama may be most famous for the Panama Canal, tropical beaches and incredible landscapes, it has also become known as an international business and banking center. Panama is an advantageous location to open a business. Unprecedented economic growth, fair labor costs, stable currency, favorable territorial tax laws, a globally compatible language, and a strategic location have drawn international business owners and investors. Both the public and private investment has led to tremendous expansions in real estate, banking, and tech.
Major Industries and Multinationals
Since the conception of the Panama Canal, Panama has been known for trade and maritime trade. Today, this is as true as ever. The Colon Free Trade Zone is the second largest Free Trade Zone in the world, and the Panama Canal continues to generate approx. $2 billion per year in revenue. However, trade is not Panama´s only industry. The service industry accounts for over half (64.4%) of Panama´s GDP. The country´s growing tourism industry has supported this. The number of visitors to Panama has increased every year since 2002 (except for 2009). The capital´s thriving banking industry contributes heavily to the services industry as well.
The Panama Canal generates $2B yearly in revenue
Other major supporting industries are agriculture and connectivity. Sugar, bananas, and coffee are among the most significant exports. Perhaps most incredible is the Geisha coffee. Grown in volcanic soil, the coffee sold for $661 per pound earlier this year at an auction. Likewise, Copa Airlines has been an active contributor in the airline industry and Panamanian economy. The airline was founded in Panama in the 1940s and recently won an international award for Most Punctual Arline 2018.
Panama´s pro-business atmosphere has also drawn international investment from many multinationals. Multinational companies that have established regional headquarters in Panama include, LG, Boeing, McKinsey & Company Inc., Visa, Nike, Dell, Procter & Gamble, and more.
Choose a legal partner who helps you succeed
Panama´s continued growth seems inevitable. With consumers carrying US dollars, a stable economy, some of the top wages in Latin America, and a business-friendly government, Panama is a prime location for opening a business or investment.
With more than 10 years of experience, Kraemer & Kraemer can recommend an efficient corporate structure and guide you in the process to open the legal entity fitting your needs. Contact Us today.