Strong Points

  • Its political stability. The country is “protected” by the United States.
  • Its economic stability. Inflation level is maintained at 2% and the country does not carry any devaluation since its currency is in parity to USD.
  • Reduced taxes, with a 0% value added tax (VAT) in the real estate sector.
  • Credit facilities: Mortgages up to 30 years; credit can be up to 80% of the real estate’s value.
  • Large development of the real estate sector with new constructions;
  • Easy process to develop tourism projects with significant tax exemptions.
  • Easy process to create and develop manufacturing industries.

Weak Points:

  • Irregularities concerning property rights.
  • Freedom of non guaranteed work.
  • A high level of corruption, notably in the public administration.
  • A slow judicial system.

Government Measures to Motivate or Restrict FDI:

The Panamanian government and the business milieu actively encourage direct foreign investment. In general, the laws do not make any difference between national and foreign companies. In 1998, the government enacted a law of investment stability, which guarantees foreign investors who invest at least two million dollars in Panama, equal treatment by virtue of the law and not by their domestic competitors. By virtue of law No. 41 of 2007, Panama has encouraged multinational companies to open their regional headquarters on its territory through a variety of different tax incentives.