why panama? - Ministerio de Comercio e Industrias

panama
I N V E S T M E N T
O P P O R T U N I T I E S
GENERAL INFORMATION
PRESIDENTIAL MESSAGE
INTRODUCTION
WHY PANAMA?
LOGISTIC AND MULTIMODAL TRANSPORTATION CENTER SECTOR
TOURISM SECTOR
SERVICE SECTOR
INFORMATION TECHNOLOGY AND COMMUNICATIONS SECTOR
ENERGY SECTOR
PRIMARY AND ARTISAN SECTOR
Panama faces great challenges worldwide, and we are preparing for them by
carrying out the improvements necessary to allow us to achieve a unified and
stronger country in a globalized world. The development of our human
resources, as well as promoting new investments, will ensure our advancement
in science and technology that will bring us progress and wealth.
Panama will continue to offer the services that have made it an international
financial center, bringing new technologies to make our country the platform in
Latin America for launching new products and services in the international
marketplace.
Trade will be strengthened by attracting new partners through bilateral free
trade agreements, increasing market coverage and eliminating government
bureaucracy.
Our strategy is based on working jointly with the private sector, improving our
competitiveness, training our human resources, seeking new investors, and
developing those strategies that strengthen our potential as a logistic and
strategic center for the whole continent.
Welcome to Panama.
MINISTRY
OF COMMERCE
AND INDUSTRY
“Facilitating economic development
with a social vision”.
M I N I S T R Y
O F
C O M M E R C E
INFORMATION ABOUT PANAMA
A N D
I N D U S T R Y
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POLÍTICA
M I N DIVISIÓN
I S T R Y
O F
C O MDE
M ELA
R REPÚBLICA
C E
A N D
IDE
N DPANAMÁ
U S T R Y
N
W
E
S
Golfo de San Blas
M A R
Isla
Colón
#S
C A R I B E
Colón
#S
Bocas del Toro
Isla
Bastimento
Isla
RICA
Cristobal
Lago
Isla
PROVINCIA DE
BOCAS DEL TORO
Gatún
Cayo
Isla
Agua
Escudo de
PROVINCIA
DE PANAMÁ
Lago
Bayano
ÊÚ
PROVINCIA
Laguna
DE COLÓN
de Chiriquí
COSTA
Lago
Alajuela
Veraguas
Isla
Popa
Golfo de Los Mosquitos
PROVINCIA
Ciudad de
Panamá
COMARCA
Isla
Chepillo
WARGANDI
Bahía de Panamá
Isla
Taboga
PROVINCIA
DE CHIRIQUÍ
COMARCA
MADUNGANDI
DE COCLÉ
COMARCA NGOBE BUGLE
Isla
Isla
Saboga
Otoque
Isla
Contadora
COMARCA
Penonomé
#S
EMBERA
#S
Isla
Isla
PROVINCIA
Pedro
González
DE VERAGUAS
del
Isla
San Telmo
San
Santiago
#S
Isla
Parida
Palmas
Golfo de
San Miguel
José
Sevilla
N°1
Las
Rey
Isla
Isla
#S
Isla
Bahía de Parita
#S
Chitré
Isla
Islas
Secas
COMARCA
Isla
Bricanco
Isla
WOUNAAN
DE HERRERA
Isla
Ladrones
EMBERA
PROVINCIA
Uvas
Las
Isla del
Canal de
Isla
Afuera
#S
DE DARIÉN
Iguana
Isla
PROVINCIA
Gobernadora
Isla
DE LOS SANTOS
Cébaco
O
L
Isla
Coiba
Isla
PROVINCIA
Isla
O
Coibita
Golfo de Chiriquí
N°2
Golfo de Panamá
Tablas
Leones
Isla
IA
de Burica
M
B
Bahía de
Charco Azul
WOUNAAN
Bayoneta
David
C
Montuosa
Isla
ESCALA
Jicarón
Isla
40
Jicarita
S#
40
80 Kms
Capital de Provincia
Carretera Panamericana
Calles Principales
Limite Provincial
Rios
6
0
LEYENDA
O C É A N O
P A C Í F I C O
1:2200000
Elaborado e Impreso en le SIG del
Isntituto Panameño de Turismo
New promotional policies are being
developed for markets and sectors
such as: agriculture, marine, artisan,
industrial and services, with a calendar of activities coordinated with our
foreign diplomatic representations for
the purpose of evaluating the best
opportunities for presenting our
export offers.
II SOCIAL AND ECONOMIC INDICATORS
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M I N I S T R Y
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C O M M E R C E
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III GROSS DOMESTIC PRODUCT BY SECTORS AND VARIATION
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I N D U S T R Y
Panama, a candidate for one of the most
important logistic centers for transportation
and storage of worldwide cargo, with private
ports on both sides of the republic, connected by the inter-oceanic railroad, highways and international airports, is capable
of offering all kinds of services for handling
cargo and passenger attention.
IV. TECHNOLOGY
V. TRANSPORTATION INFRASTRUCTURE
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VI. MAIN TRADING PARTNERS
Export (2005): United States 43.52%, Spain 8.88%, Sweden 5.64%, Holland 4.88%, Costa Rica 4.02%, Belgium
2.58%, Guatemala 2.22%, Nicaragua 2.22%, Taiwan 2.08%, United Kingdom 1.91%, Mexico 1.78%, Dominican
Republic 1.71%, Honduras 1.62%, Colombia 1.60%, Italy 1.57%, Puerto Rico 1.36%, Colon Free Zone 1.36%, Portugal
1.31%, Republic of China 1.06%, Rest of the World 8.67%.
Imports (2005): United States 27.21%, Colon Free Zone 12.18%, Curacao 11.44%, Costa Rica 4.68%, Japan 4.53%,
Petroleum Free Zone 3.95%, Mexico 3.71%, Colombia 3.46%, Brazil 3.06%, South Korea 2.48%, Republic of China
2.38%, Guatemala 2.01%, Spain 1.52%, El Salvador 1.35%, Germany 1.27%, Venezuela 1.08%, Trinidad and Tobago
1.05%, Argentina 1.00%, Rest of the World 11.65%.
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VII. MAIN EXPORT PRODUCTS
Melon, watermelon, pineapple, fish, shrimps, lobsters, tuna, beef, coffee, sugar, services.
VIII. MAIN IMPORT PRODUCTS
Petroleum and its derivate products, automobiles, heavy equipment, electric and telecommunication devices,
medicines, plastic and its manufacture, paper, cardboard and its manufactures, food, clothing, chemical products,
shoes, furniture.
IX. HEALTH AND EDUCATION INFRASTRUCTURE
Source: Document “Panama en
Cifras 2004”, National Controller’s
Office of the Republic of Panama
* Statistics Department, Education
Ministry of the Republic of Panama
** National Census of Population and
Housing (2000)
(P) Preliminary records
NOTE: In conformity with the actions
and modifications introduced by Law
34, of July 6, 1995 and Law 47 of
1946, starting from the year 2000,
there will be no graduations in
elementary schools.
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IX COSTS AND SERVICES
Source: Direction, Communications
Ministry of Commerce and Industry
Construction Cost: B/. 200.00 per mt2 (Average cost)
Characteristics:
•
15 cms Concrete Flooring
•
6.10 mts High
•
Steel Structure
•
Insulations
•
Electricity for Lighting (non Industrial)
•
Boarding Plant
Source:
Home Survey, Controller General of the Republic
www.ersp.gob.pa
Ministry of Labor and Labor Development
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L A S
G A R Z A S
P R E S I D E N T I A L
P A L A C E
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M I N I S T R Y
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O F
C O M M E R C E
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I N D U S T R Y
INTRODUCTION
From the discovery of America, Panama’s geographic
position has been one of its most valuable assets, facilitating the mobility of men and wealth from the Atlantic to the Pacific. Today, modernization and globalization has allowed us to continue providing this service,
on land, by sea and air, from the most sophisticated
and advantageous logistical platform in the Western
Hemisphere.
The Panama Canal has been in operation since 1914,
making world trade easier, serving 120 maritime routes
to over 80 countries and, in 1948, the Colon Free Zone
was inaugurated, becoming the second most important
free zone in the world offering warehousing and the redistribution of goods worldwide. With these new assets,
in addition to modern highways, an inter-oceanic railroad communicating the terminal cities of Panama and
Colon in only one hour, and modern private ports operated by international firms such as Hutchison Whampoa
Limited, Stevedoring Services of America, and Evergreen Marine Corporation, have made Panama the ideal
location for handling cargo coming from Asia en route
to the east coast of the United States, from the east
coast of the United States to the west coast of South
America, and from Europe to the west coast of the
United States and Canada, among others.
International cargo movement will continue its growth
rate as a result of the participation of countries such as
China, India and others in world trade that have brought
new investment projects to serve this new demand such
as the modernization of the Panama Canal and of the
actual ports, and the construction of a mega-port at the
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Our tropical climate and varied tourist
attractions make Panama a preferred
destination for travelers who will find
picturesque indigenous and colonial
towns, white-sand beaches, coral reefs
of indescribable beauty, cool mountains, tropical rain forests with lush
vegetation, and the home of a myriad
species of flora and fauna.
Pacific entrance of the Panama Canal that will allow us
to handle seven million containers annually. These new
projects provide opportunities for other related services,
such as repairing and cleaning containers, tugboat services, disposition of garbage and waste, handling hazardous materials, and others.
In the last few years, Panama has become the center of attraction for many investors seeking opportunities, not only in port activities and cargo handling, but
in other unrelated areas such as tourism, homes, entertainment, health, education, generating clean energy
and others. The reasons are: Panama is easily accessed; uses the US dollar as legal tender; permits free
currency movement; has an international banking center; worldwide communications; excellent living conditions; free from major natural disasters; the largest and
most efficient maritime hub with seven private ports and
two oceans; an international air transportation hub serving over thirty destinations in America; natural resources; qualified workforce; social security; political
stability and modern legislation that equally protect the
interests of nationals as well as foreigners.
The new strategy for national development designed
by the Ministry of Commerce and Industry seeks to open
new markets, promote exports, prepare offers for the
competitive export of goods and services, and for promoting investments focused on the following economic
sectors: service, tourism, multi-modal transportation and
logistics center, energy, information technology and
communications, and agricultural trade.
For more information, please visit our offices or see
our website at:
www.mici.gob.pa
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M I N I S T E R I O
D E
C O M E R C I O
E
I N D U S T R I A S
WHY PANAMA?
Panama is a country dedicated to service, and enjoys
a privileged geographic position that has allowed it to be
one of the most important logistics centers in the Western Hemisphere for importing, warehousing and distributing worldwide cargo; a bridge for travelers to the entire American Continent, and provider of efficient and
modern communication services. It is a country that promotes trade, national as well as international, and enjoys economic, political and social stability. In fact, even
before America was discovered, Panama had been a
bridge between North and South America for hundreds
of species and a myriad of people. To that extent, many
centuries later, in 1826, when the liberator, Simón Bolívar,
stated: “if the world had to choose its capital, the Isthmus of Panama would be selected for this august destiny, situated as it is at the center of the globe.”
Our nation has gone on to be more than a passage,
and has become a modern logistical platform for sea,
land and air transportation. The Panama Canal is its main
center of activity, transporting over 278 million metric tons
of cargo (containers, grain, petroleum and its derivatives,
among others), and today serves more than 120 maritime routes to over 80 countries worldwide, complemented with container terminal systems in the Pacific
and the Atlantic that serve as transshipment and cargo
redistribution centers moving 2.3 million TEU’s (20'
equivalent units) of containerized cargo annually. Additionally, we have an inter-oceanic railroad that moves
about 100,000 containers yearly from coast to coast. The
Colon Free Zone, the most important in the Western
Hemisphere, with an annual trade surpassing $12 billion, is also located in Panama. The development of the
Panama-Pacific Special Economic Area at the former
Howard Air Force Base will serve as the designated area
for the production of high technology goods and services.
We provide efficient air transportation service at the
Tocumen International Airport, currently undergoing upgrading, in a comfortable and safe environment for all
travelers who visit our country and expeditious and efficient attention to those in transit who do not have to go
through immigration or customs. Copa Airlines operates
its Hub of the Americas at the airport, offering over 36
destinations to 21 countries in America with excellent
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connections, some of them with two flights daily, to
the most important cities in Latin America. Local
airlines with excellent service are also available for
direct flights to the main cities in the interior of the
country.
Thanks to our strategic geographic position and
our narrow waist, Panama has become the point of
convergence for the five submarine fiber optics
cables, making it the ideal location for telecommunications companies and data centers because of the
advantage of being connected to North and South
America, Europe, Asia and the Caribbean, benefits
that have been enjoyed by companies such as MCI,
Cable & Wireless, and Telefónica Móviles (Movistar),
all offering first-class cellular phone and internet services, both locally and internationally.
Our prestigious International Banking Center, with
over seventy recognized international banks governed
by the principles of the Basel Convention, registered
during the IV Quarter of 2005 assets in the order of
US$44.915 billion.
From the birth of the Republic in 1903, we have
used the US Dollar as legal tender which has allowed
us to enjoy an inflation rate below 2% for the last forty
years with no risk of devaluation.
Our health and medical services are internationally recognized as mentioned in Strategy+Business
Magazine wherein Panama earned first and second
place by having the two best private hospitals in the
Central American region. Our hospitals are equipped
with state-of-the-art medical technology, and are affiliated to world-famous hospitals such as the Baptist
Hospital in Miami, Florida, and Johns Hopkins Medicine International in Baltimore, Maryland.
Panama has the finest international hotel chains,
such as the Intercontinental, Marriott, Radisson,
Barceló, Meliá, Sheraton and Crowne Plaza, just to
mention a few, all with excellent restaurants and lo-
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cal and international cuisines. Additionally, there are
several large shopping malls offering a wide variety
of products including electrical appliances, perfumes,
jewelry, clothing and art of the finest brands, as well
as entertainment such as casinos, modern movie theatres, concert halls, museums and sporting centers
for all ages.
Our tropical climate and various tourist attractions
place us among the preferred destinations for travelers who will find picturesque native and colonial
towns, white-sand beaches, coral reefs of indescribable beauty, cool climate mountains and tropical forests with lush vegetation, and a myriad of fauna and
flora species. With an excellent roadway network,
you can travel the country in only six hours because
of the short distances.
These advantages are acknowledged by several
prestigious international publications such as Harper’s
Bazaar, National Geographic Traveler and other
magazines that have chosen Panama as “the best
place to live.” Panama City is cosmopolitan, with an
excellent trouble-free quality of life, juridical and personal security, freedom of religion, and the comforts
of the major capitals of the world.
For these reasons, Panama has been chosen by
important multinational enterprises such as Samsung
Electronics, Inc., DHL, DELL, Hutchison Port Holding Group, HSBC, BICSA, Scotia Bank, Assicurazioni
Generali, PanAmerican Life Insurance Company, and
many more as their centers for regional operations.
International organizations have also established
themselves in Panama, including UNICEF, UNDP,
OAS, Spanish International Cooperation Agency
(AECI) and Bladex, among others.
Panama offers goods and services at reasonable
prices, compared to its nearest neighbors, and has
Free Trade Agreements (FTAs) with Taiwan, El Salvador, Singapore and Chile. We are in the final
stages of negotiating FTAs with the United States
and Central America, one with the European Union,
and we are in the process of joining the G-3. We
are vying for being the headquarters of the Free
Trade Area of the Americas (FTAA), and we are
members of the World Trade Organization (WTO).
All these advantages and many others are offered by Panama to enterprises and investors, and
we invite all to strive to strengthen international
trade in a pleasant and safe environment in a
peaceful country that provides quality of life and
tranquility to its residents.
M I N I S T R Y
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C O M M E R C E
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LOGISTIC AND MULTI-MODAL TRANSPORTATION
CENTER SECTOR
Panama, a candidate for one of the most important logistic centers for transportation and storage
of worldwide cargo, with private ports on both sides
of the republic, connected by the inter-oceanic railroad, highways and international airports, is capable of offering all kinds of services for handling
cargo and passenger attention.
In recent years, millionaire investments have
been made in construction and modernizing the
port system by some of the world’s most important
companies, such as Hutchison Port Holdings and
Evergreen Corporation, resulting in the capability
of moving over two million containers in 2005. We
continue with the process of adding new ports, including the project for constructing a mega port at
the Pacific entrance of the Panama Canal that will
permit augmenting port operations.
We are in the process of modernizing and enlarging the Tocúmen International Airport to allow
a greater number of flights to and from Panama by
increasing the modern positions for departures and
arrivals from 14 to 27, as well as larger commercial and circulation areas. New equipment is being obtained for service and support, such as: elevators, a modern incoming, departing, and in transit baggage-handling system, an integrated flight
information system, and for renovating the air conditioning system. Work is also in process for remodeling the cargo terminal and renovating its runways. The new premises should be ready in early
2007.
From time immemorial, Panama’s geographic
position has been a valuable asset facilitating
moving wealth and people through the narrowest
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point of the Central American Isthmus to destinations in North and South America. At the outset,
gold and other riches were shipped to Spain. Then
there were the Portobelo fairs, the California gold
fever and, finally, the construction of the Panama
Canal, completed in 1914, that permitted the passage of thousands of vessels, serving more than
120 maritime routes to more than 80 countries.
The railroad, operated by Kansas City Southern Railways from the U.S., with an investment of
over $60 million, moves cargo and passengers
between the terminal cities of Panama and Colon,
promoting international trade through the Colon
Free Zone, the largest duty free area in the Western Hemisphere.
The Colon Free Zone, created in 1948, now has
over 2,000 companies with import and export operations worth more than $11 billion, and contributes with 7.9% of the Gross National Product. The
new administration, in its effort to strengthen the
international competitiveness of its services, is
implementing new technological services to expedite trade, reduce expenses and increase transportation efficiency.
The Panama-Pacific Special Economic Area
(AAEEPP) located at the former Howard Air Force
Base (former United States Southern Command
military base) that reverted to Panama, covers approximately 2,005 hectares (4,954 acres), has infrastructure ready for use and land available for
construction. The AAEEPP is only 15 minutes from
Panama City, the railroad, and the Port of Balboa,
and one hour from the most important ports on the
Atlantic side, which also has a first class airport.
All this makes the AAEEPP the ideal place for developing the Logistic and Multi-modal Transportation Center of the Americas.
The AAEEPP offers fiscal, labor, and migratory
incentives, special customs regulations, and
single-window (one-stop) service for investors, and
is destined to be a high technology industrial manufacturing center, an air logistics center, and a repair and shopping center in Panama serving the
world.
Panama has more than 94,000 hectares
(232,274 acres) and 7,000 reverted buildings as a
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The Colon Free Zone, created in
1948, now has over 2,000 companies
with import and export operations
worth more than $11 billion, and
contributes with 7.9% of the Gross
National Product.
Photo: Courtesy of Manzanillo International Terminal
Photo: Courtesy of Tocumen, S.A.
Photo: Courtesy of Tocumen, S.A.
consequence of the Torrijos-Carter Treaties, many
of which are still available to be used for carrying
out transportation, storage and cargo distribution,
tourism, housing and other activities.
We also have a modern highway network that covers the whole country and permits us to reach as far
as Alaska. There are more than 71 airports, and
Copa Airlines’ Hub with daily flights carries cargo
and passengers to 36 different destinations in 21
countries in America. There is also the International
Techno-Park in the City of Knowledge, seeking to
develop new business opportunities by creating new
poles of competition to promote productivity and
competitiveness.
With Law No. 25 of 1992, special regulations
were created for establishing and operating Processing Zones for Export. Defined as tax-free zones
and free enterprise, we are actively inviting new
companies to participate with activities aimed at
producing goods and services for export, benefiting from the available incentives in addition to the
logistic and strategic facilities offered by Panama.
Investment opportunities:
* Expansion and modernizing the Panama Canal.
* Construction of the Mega Port at the Pacific entrance
of the Panama Canal.
* Expanding the ports on both sides of the Isthmus.
* Expanding the Panama-Colon Trans-Isthmian highway.
* Moving containers at the national level.
* Repair and maintenance of containers.
* Shipyards for repairing vessels.
* Supplying fuel.
* Tugboat service.
* Maritime agencies.
* Security and ship inspection services.
* Garbage collection service.
* Handling hazardous materials.
* Cargo movement at airports.
* Establishing companies in the Howard Area
for manufacturing high-technology products.
* Logistic and warehousing services for moving goods
on the Pacific seaboard of Panama.
* Specialized services in information technology,
communications and call centers.
* Housing.
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TOURISM SECTOR
When Law No. 8 of June 14, 1994 went into effect
for promoting tourist activities, it created a series of fiscal incentives and benefits that, in addition to the excellent living conditions, the absence of natural disasters,
the use of the US dollar as legal tender, Copa Airlines’
Hub of the Americas with direct flights to major cities
and capitals in the American Continent with frequencies of up to twice a day to certain destinations, and the
largest port services in Latin America, have increased
attractiveness of investments in various segments of
the tourism industry.
Our privileged geographic position, solid finances,
personal and juridical security, political and social stability, are more reasons that make Panama the perfect
destination for visiting, residing and investing. These
conditions have led to having large hotel chains such
as Sheraton, Radisson, Crowne Plaza, Meliá and
Barceló, among others, to establish themselves here.
Panama has more than 16,700 rooms available in the
country to accommodate our visitors. There are groups
of investors who are developing eco-tourism projects at
beaches, mountains and islands, in addition to sport fishing and underwater projects. Restoring Colonial Panama
and the Casco Antiguo has attracted new and varied
investments in the tourism industry. The large shopping
centers and malls, as well as entertainment centers,
have created new investment niches.
Among the projects being developed is having
Panama designated as the Home Port for cruise ships.
We are negotiating with some cruise lines that have
expressed interest in Panama becoming a departure
and destination port for their ships because of the conveniences and benefits our country offers. This project
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should be ready by 2008. During the 2004-2005 cruise
season that runs from September through May, we received
over 300 cruisers whose passengers were able to see what
Panama has to offer, creating a marked interest in choosing our country as a destination for their next vacations.
When Law No. 9 of June 1987 was promulgated, incentives were created for retirees and pensioners who establish their second home in Panama, offering them new, safe,
and comfortable retirement areas with varied climates and
much lower costs of living. We have also developed mass
tourism programs for beaches and mountains that have
been the mainstay of the Panamanian Tourism Institute’s
(IPAT) offer: “Panama, the route to be discovered.” We
have analyzed the possibility of creating strategic alliances
with countries like Cuba, the Dominican Republic and others to promote multi-destination routes. Eco-Agricultural
Tourism is another interesting program combining sustained
tourism with environmental protection, as well as exploiting Panama’s social and cultural wealth for those seeking
peace and tranquility, and to be in contact with nature.
We are strengthening the traditional destinations with
services, infrastructure and business chains, developing
new and novel tourist destinations such as: Panama City’s
Tourist Route which includes eco-tourism, national parks,
the Panama Canal locks, Chinatown, Colonial Panama;
the Colonial Caribbean Route that leads to shopping at
the Colon Free Zone; Portobelo and Palenque de Esclavos;
the Kuna Yala Caribbean Route and the Gnobe Buglé
Caribbean Route, all offering the opportunity of knowing
the culture and way of life of the most important ethnic
groups in our country, their bright sun and beaches; the
Route of Panamanian Traditions and the Dry Arch to learn
about the folklore, customs and traditions of our people,
and the Recreational Route to the Beaches of Panama.
We continue to strengthen recreational, ecological, business, alternative health and socio-cultural tourism.
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SERVICE SECTOR
From the discovery of the South Sea, Panama has
been considered as a country of excellent service. 76.2%
of the Gross Domestic Product (GDP) has come from the
service sector. Our Financial Center, strengthened by
modern legislation in accordance with the principles of
the Basel Convention, the free movement of capital, the
absence of a Central Bank, the use of the US dollar as
legal tender, along with the banking system’s stability,
have made Panama a trustworthy destination for more
than 70 banks from 45 countries, with assets exceeding
$44 billion.
There are three types of banking licenses: the General License allows banks to carry out local and foreign
operations; the International License only allows foreign
operations, but also permits participation in the local inter-banking market; and the Representative License that
is granted to foreign banks with offices established in
Panama from which they can promote their services and
visit actual and potential customers.
The new banking law maintains the fundamental elements of confidentiality and the identity of its depositors.
However, it does not prevent Panama from having strict
regulations to prevent money laundering.
The Banking Superintendence, the governing banking entity, also supervises fiduciary transactions and
grants the respective licenses for their various activities.
Ninety percent of the existing licenses have been granted
to banks established in Panama.
Insurance activities go back to the beginning of the
20th century, when US companies began operating in
Panama. For many years, the insurance industry operated in the framework of the Code of Commerce until in
1956 when a new law went into effect regulating this
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Panama has its Conciliation and Arbitration Center,
founded in 1994, sponsored by Panama’s Chamber
of Commerce, Industries and Agriculture and other
business groups to offer the business sector the
services of administering arbitrations and
conciliations as modern alternatives to resolving
commercial controversies.
activity, and finally in 1966, Law No. 59 was passed,
and is in effect today, granting autonomy to the Superintendence of Insurance and Reinsurance to duly supervise and oversee the insurance sector. We now have
18 insurance companies with national and foreign capital, 6 reinsurance companies regulated by Law No. 63
of September 19, 1996, and 2 captive insurers and 5
captive insurance administrators under Law No. 60 of
July 29, 1996, that oversee juridical persons that carry
out insuring and reinsuring particular or specific risks
previously authorized by the Superintendence of Insurance and Reinsurance.
Stock exchange activity began with Cabinet Decree
No. 247 of 1970, but it was not until 1989 that a group of
businessmen founded the Panama Stock Exchange,
seeking to strengthen the financial market and creating
new financing mechanisms. As of 1990, the stock market began to be the scenario for a greater number of stock
market operations, and new actors arose, such as stockbrokers, institutions for payment, transfer and liquidation
of stocks. This brought on Decree Law No. 1 of July 1,
1999, which is the regulating framework in force governing stock exchange operations and all actors in this field.
Panama has its Conciliation and Arbitration Center, founded in 1994, sponsored by Panama’s Chamber of Commerce, Industries and Agriculture and other
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Photo: Courtesy of the Communications Department
of the MInistry of Commerce and Industry
business groups to offer the business sector the
services of administering arbitrations and conciliations as modern alternatives to resolving
commercial controversies.
In 1997, Panama’s Chamber of Commerce, Industries and Agriculture agreed with the InterAmerican Development Bank (IDB) on a project to
improve the use of alternative methods to resolve
Photo: Courtesy of Manzanillo International Terminal
conflicts (arbitration, mediation and conciliation). National legislation regulating this activity is under Decree
Law No. 5 of July 18, 1999.
Today, Panama’s Conciliation and Arbitration Center
is a solid institution, with its own juridical person, offering its many customers comfortable and modern offices, highly qualified personnel, lists of formally trained
and experienced arbiters, mediators and conciliators with
excellent negotiating abilities in diverse business areas.
It is worth mentioning that Panama is also known
for having important law firms, with international offices and correspondents who will assist you in handling all legal and administrative matters. We also provide ship registration, an important segment of the international maritime field, auditing and accounting services, and many others.
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Photo: Courtesy of the Communications Department of the MInistry of Commerce and Industry
INFORMATION TECHNOLOGY
AND COMMUNICATIONS SECTOR
The Republic of Panama is the ideal location for
companies in the field of Information and Communications Technology (ICT) to provide innovative services worldwide. In keeping with its motto “Pro Mundi
Beneficio” (“For World Benefit”), Panama has the potential to become the “Digital Bridge of the Americas.”
Its competitive advantage lies in creating value and
competitiveness for other countries that move forward
by using its developed service platform that includes
a commercial trade and logistics center around the
canal and an international financial center. Additionally, we have an International Technological Park seeking innovative companies that produce, assemble or
process high technology goods or provide services
with similar features destined to be sold in the local
and international market.
In the last decade, Panama has developed a strong
and stable telecommunications infrastructure providing
high quality service through a large network. This ability to offer that service substantially exceeds local demand. The five main submarine fiber optics cables that
converge at the Isthmus of Panama communicate
North and South America with the Caribbean and the
rest of the world (MAYA, ARCOS, SAC, PAC and PanAmerican) provide that service, guaranteeing the
broadband, redundancy and security necessary for
telecommunications and information technology services. It is said that Panama has connections compa-
32
rable to those offered in the largest cities worldwide,
but at much lower costs.
A growth is foreseen in the infrastructure because
of deregulation in the sector, which is in progress at
this time. On the other hand, companies in the electrical transmission field are also investing in telecommunications infrastructure, developing fiber optics networks. These factors, added to Law No. 54 of October
25, 2001, granting benefits to commercial call centers,
has influenced the decision of international companies
to have offices in our country. Likewise, the City of
Knowledge’s Technological Park has a high-technology data storage operation, Internet Data Center, which
has made Panama the doorway for Latin America to
have access to Internet and telecommunications, allowing those companies to have an infrastructure with
servers dedicated to electronic commerce, meeting the
most advanced network safety requirements in the
market. Panama offers a sophisticated telecommunications system operated by renowned and prestigious
companies from the United States and Europe.
The ICT services sector in Panama represents a
healthy industry, with a stable financial record and good
potential growth, expediting business operations creating a world market within the reach of all. Also, engineers and information technologists, mostly university
graduates, are available at very competitive costs.
On the other hand, the “Electronic Government”
Panama is known as a country that is most qualified for developing electronic
commerce directed to Latin American markets, for which reason our goal is to
have a part of these transactions carried out through our territory and that our
logistic and transportation services be used for their distribution.
initiative carried out by the Secretariat of the Presidency
for governmental innovation is moving ahead, providing business opportunities for consultation companies,
data bases, systems integration, televised teaching and
many alternative services that will allow expediting steps
carried out by the government or by the private sector
through said measure.
Through Law No. 43 of July 2001, electronic documents and signatures are legally recognized. This
law provides juridical equality to both traditional and
electronic trade thereby expediting business transactions. Panama’s Ministry of Commerce and Industry, with the help of the Science and Technology Secretariat, developed the Digital Signature Project,
which is a group of characters that accompany a
document or electronic message as a means of formally identifying the author of said document. This
permits a means of fast, secure and trustworthy com-
munications among its users.
Panama’s Chamber of Commerce, Industries and
Agriculture, with the support of the Inter-American Development Bank, is executing the “Development of Electronic Trade in Panama” project to increase the competitiveness of small and medium Panamanian enterprises in the electronic market by means of expanding
the use of information and communications technology.
The Panamanian banking sector follows Agreement
No. 5 of 2003, issued by the Banking Superintendence,
which regulates online banking activity, permitting reduced operation costs and increasing the competitive
level. Panama is known as a country that is most qualified for developing electronic commerce directed to
Latin American markets, for which reason our goal is to
have a part of these transactions carried out through
our territory and that our logistic and transportation
services be used for their distribution.
Photo: Courtesy of the Communications Department of the MInistry of Commerce and Industry
33
Panama also has Law No. 15 of August 8, 1994, that protects authors’ rights on literary, instructive, scientific or artistic works arising
from intellectual creations, which guarantees and safeguards the results of research and development of new technologies.
The above gives advantages for the following operations:
* Commercial Call Centers that serve the regional market thanks to
qualified bilingual personnel.
* Data Centers/VoIP communications services.
* Applied Services providers.
* Bio-Information Technology Application Development Center, thanks
to the existing biodiversity and research institutes such as the
Smithsonian Tropical Research Institute (STRI).
* Regional Training Centers in Telecommunications, Information Technology Security and Free Software.
* Research and Development for new telecommunications technologies, such as third-generation (3G) Universal Mobile Telecommunications System (UMTS) at the campus of the City of Knowledge.
* Local content development for mobile phones: Software for text
messaging and multimedia, Wireless Application Protocols (WAP), Regionalizing melodies and logos, games development, etc.
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ENERGY SECTOR
In August 2005, the National Government implemented
the National Policy on Hydrocarbons and Alternative Energy for the period of 2005-2020, with a series of measures
to deal with the world crisis caused by increasing prices of
petroleum-based products and to counteract the possible
lack of energy due to shortages or exorbitant prices that
could mean a threat to the country’s economic and social
development.
The political energy guidelines are based on short, medium and long-term measures that would eliminate being
dependent on petroleum, create savings and generating
clean energy taking advantage of the benefits granted by
the Kyoto Protocol under the Clean Development Mechanism (CDM) in which the countries may obtain funds to
invest in new energy projects.
An immediate action has been to offer the alternative of
using Liquid Petroleum Gas (LPG) as vehicular fuel that
would mean savings for consumers and the State. We
have signed a memorandum with Colombia for the importation of natural gas, which is a clean high calorific fuel for
home use, vehicles and generating electricity. Corrective
measures will also be implemented in power consumption
in the public sector.
Taking advantage of what Panama has to offer, such as:
its logistic platform that permits connections by land, sea
and air; seven private ports in the Atlantic and the Pacific, a
US dollar economy, and an international financial center,
the government seeks to make the country an “energy hub”,
promoting, among other projects, a regional refinery that
would process heavy crude from South America and Mexico
to supply the demand for petroleum and its byproducts to
Central America and the west coast of the United States.
There is an actual demand in Central America for 370,000
barrels of crude per day, and there is no refinement capability in the region to satisfy that demand which creates a
market that Panama could supply facilitated by legislation
that would permit construction of new refineries, granting
fiscal benefits on earnings resulting from exports of the final
product. Additionally, advantage can be taken of the facilities offered by the existing pipeline, owned by Petro
Terminales, S.A. (a mixed capital enterprise in which
Panama has a major share) that unites the Pacific and Atlantic coasts, the storage tanks and the existing port facilities and adequate depth.
This project will also bring benefits in producing electrical energy as the estimated demand for the coming years
should increase by more than 400 MW for the Central American market, and Panama as part of the Central American
Electrical Interconnection System (SIEPAC) would permit
us to supply the demand of the five Central American countries.
Recently, agreements and memoranda of understanding on energy matters have been signed with the Bolivarian
Republic of Venezuela, among other aspects of the supply
of petroleum, finished products, storage, etc. All of the above
is part of the initiatives taken by the present administration
for the purpose of Panama becoming a center or energy
hub for the region. Additionally, Law No. 8 of 1987 will be
revised, which will regulate activities related to hydrocarbons, and we will promote petroliferous exploration.
35
The guidelines of the National Policy on Hydrocarbons and Alternative Energy cover:
• Diversification of the Energy Balance. Actually, 65% of
our energy consumption comes from petroleum for which
we will diversify our dependency using natural gas and
seeking and promoting other sources of renewable energy (biomass, photovoltaic, solar, wind power, etc.)
• Independence and sustainable energy. We will develop our own sources of energy such as hydro energy,
wind power, solar energy, biomass energy and energy
sourced from peat (fossil fuel formed by an accumulation of partially decomposed vegetable matter, found
usually in bogs).
• Taking advantage of Panama’s geographic position to
set up processing plants for lubricants, establishing a
regional refinery and a liquefied natural gas (LNG) plant,
using the storage capability on a regional level, using
the Panama Canal for tankers transporting crude, and
the only trans-isthmian pipeline in the region, from
Chiriquí to Chiriquí Grande in Bocas del Toro (131 km),
and becoming the Regional Energy Center for redistribution to the Central American region.
• To promote the use of new non-contaminating technology and developing renewable energy sources, such as
solar energy, wind power and biomass to protect the
environment. Also being considered are other projects
for remote communities, such as improved kitchens that
will reduce the use of firewood and consequently eliminating harmful smoke emissions.
• Introducing and promoting new technologies. Using
LPG in vehicles, and other technologies approved in international markets.
• Rationing energy consumption. Designing energy-saving programs.
Law No. 41 of July 1998, the General Environment Law
of the Republic of Panama, creating the National Environment Authority (ANAM), indicates that it is the na-
36
tional environment policy to stimulate and promote sustainable behavior and the use of clean technologies to
reduce the levels of waste and contamination of the environment. Also, it states that it is the government’s responsibility to promote producing and using renewable
energy and the use of clean technologies. The State
promotes the development of renewable energy sources
following the guidelines of the Kyoto Protocol, the savings and efficient use of energy, and supporting viable
alternatives for generating electricity at low costs.
In August of 2004, Law No. 45 was approved, and establishes incentives for promoting Systems for Hydroelectric Generation and Other New Sources, Renewable and Clean, which supports the State’s policy that
seeks to promote producing and using renewable energy as a means of developing a more friendly behavior
with the environment. We are actually promoting this
law through our participation in international fairs where
we present a portfolio of hydroelectric projects and reforestation that employ clean development mechanisms
(CDM) that allow developed countries to comply with
part of their commitments to reduce the emissions of
greenhouse gases under the Kyoto Protocol by investing in these projects.
We have two feasibility studies that brought up the Wind
Power Map and the Geothermic Map of Panama that
reflect the potential in different areas nationwide for generating energy by these means.
Investment opportunities:
* Constructing a regional refinery for processing
and supplying petroleum and its byproducts.
Panama has a great potential for developing
projects for generating energy that involve
using renewable energy sources, such as:
* Solar energy: Approximately five and a half
hours of sunlight daily.
* Hydro resources: We have large rivers in different provinces that can be exploited for hydroelectric power plant projects.
* Wind power resources: Studies made reveal
that we have a substantial potential for generating electricity using wind power in the provinces of Veraguas (Cerro Tute), Los Santos (La
Miel) and Chiriquí (Boquete and Hornitos).
* Peat resources: In Changuinola (Bocas del
Toro province), an 80 Km2 area with an average thickness of 8 meters of peat was found
that could become the second source of energy
generation after the hydroelectric plants.
* Biomass resources: There are projects for
using state-of-the-art technology to produce
ethanol from vegetation and agricultural waste.
Ethanol could be used for fuel, electricity and
organic chemical products.
* Systems for generating biogas and biological fertilizers by processing waste from an
agro-industrial farm (porcine) located in
Veraguas province.
* Pilot plan for solar energy refrigerators for
artisan fishermen.
* Drip irrigation through photovoltaic energy
systems for sustainable agriculture and rural
development in the central provinces.
* Designing, promoting and implementing a national biofuel program.
* Generating biogas and organic fertilizer sourced
from biomass produced by agricultural activities.
* Technical assistance for designing a renewable energy and energy-efficiency plan for the
Republic of Panama.
* Designing and implementing an energy
efficiency program for the commercial, industrial,
residential and government sectors.
* Strengthening the capability of the Inter-institutional Environmental System (SIA) for evaluating the environmental impact and auditing studies for projects and companies in the renewable
energy sector.
37
PRIMARY AND ARTISAN
SECTOR
In 2005, Panama had a sustained growth with a record
11.66% in exports, amounting to $839 million, and it is expected that 2006 will be even closer to one billion dollars.
This is due largely in part to the free trade agreements
with Taiwan and El Salvador that have helped diversify the
portfolio of countries that buy Panamanian products. And
with the coming into effect of the treaties with Singapore
and Chile, and finalizing the negotiations with the United
States, encouraging perspectives will permit the growth of
Panamanian exports.
The Ministry of Commerce and Industry (MICI), through
the EXPORTA program dedicated to promoting exports,
promotes and strengthens the rural sector’s agricultural
exports and industrial agriculture, utilizing new tools such
as financial assistance, technological assistance programs,
and using windows at international fairs and trade missions
as a more direct method of reaching international markets.
The products with the greatest interests in the international markets are those known as “non-traditional products,” such as: pineapples, melons, watermelons, calabash,
yucca, yam, handicrafts, beef and fowl, among others. We
seek to increase growth opportunities for the existing nontraditional products, and to find and develop new products
that meet the demands of international consumers.
The MICI helps investors with means that develop our
export offer. An example would be creating export and strategic alliance consortiums, programs for promoting exports,
training programs, improved access to information and automation of services to the private sector, and strengthening the protection of exports with export insurance programs to motivate and to ensure payment of exports.
New promotional policies are being developed for markets and sectors such as: agriculture, marine, artisan, in-
38
dustrial and services, with a calendar of activities coordinated with our foreign diplomatic representations for
the purpose of evaluating the best opportunities for presenting our export offers.
We seek to attract investors that not only want business opportunities with local partners, but that also bring
new techniques in processing, packing, conservation
and added value that improve the quality of their products, fill the niches in the market, and provide new products with greater benefits.
Business opportunities are arising in the following areas:
* Processing frozen fruits and vegetables.
* Processing vegetables in flour, puff pastries and pastas.
* Processing dehydrated fruits and vegetables.
* Processing chopped fruits and vegetables for salads.
* Animal nutritional supplements with fruits and vegetables as raw material.
* Processing nectars for yogurt, natural cheeses and beverages.
* Processing sausages and special hams.
* Processing fish and seafood.
* Processes for extracting oil from agricultural products.
* Processing alcohol and its byproducts.
* Processing juices, pulp, concentrates and marmalades.
* Designing and producing artisan works for dress purposes.
* Designing and producing artisan products for home use (furniture, decorations, etc.)
39
Photo: Courtesy of Panama Canal Authority
Why invest in Panama?
You will find Panama to be the ideal choice for investments and business
because of the advantages listed below:
• A country dedicated to service that promotes business opportunities.
• Political, social and economic stability.
• Low levels of inflation.
• The US dollar is the legal currency, and prevents devaluation problems.
• Its worldwide renowned International Banking Center with strict international standards.
• The center where worldwide fiber optics telecommunications converge.
• The most important free zone and modern logistics platform in the Western Hemisphere
serving the world.
• Legislation guaranteeing juridical security, fiscal and tax incentives for investors.
• Excellent natural resources, with almost unexploited virgin jungles, beautiful beaches and
immense marine wealth, and the ideal tourist and cruise ship destination.
• Cosmopolitan city, multicultural and multiethnic, with a modern infrastructure, excellent
shopping centers and large hotel chains.
• World-class health and medical services with the most highly rated hospitals in the region.
The Ministry of Commerce and Industry’s National Office for Promoting Investments
offers investors the following services in order to facilitate investing in Panama:
• Provide investors with assistance to expedite investment-related procedures.
• Actively promote investments in various designated economic sectors.
• Attend to actual and potential investors, providing support and continuity in order for them to
successfully achieve their goals and realize growth in their investments.
• Identifying and assisting in evaluating business opportunities in Panama so that investors can
arrive at decisions to establish operations in the country.
• Coordinate interviews for investors with government entities and associations of the private sector.
40
DIRECTORIO DE INFORMACIÓN / DIRECTORY OF INFORMATION
Ministry of Commerce and Industry
Ministerio de Comercio e Industrias
Apartado 0815-01119
Panamá, República de Panamá
Tel. (507) 560-0600/0700
Fax (507) 560-0656
Web http://www.mici.gob.pa
Reverted Areas
Unidad Administrativa de Bienes
Revertido
Apartado 0816-02886
Panamá, República de Panamá
Tel. (507) 211-9600
Fax (507) 211-9700
Web http://www.ari.gob.pa
Ministry of Economy and Finance
Ministerio de Economía y Finanzas
Apartado 0816-02886
Panamá, República de Panamá
Tel. (507) 507-7008/507-7600
Fax (507) 507-7053
Web http://www.mef.gob.pa
Presidency of the Republic of Panama
Presidencia de la República de Panamá
Zona1, Ministerio de la Presidencia
Panamá, República de Panamá
Tel. (507) 527-9600
Fax (507) 527-4622
Web http://www.presidencia.gob.pa
Ministry of Agricultural Development
Ministerio de Desarrollo Agropecuario
Apartado 0816-0111
Panamá, República de Panamá
Tel. (507) 507-0600
Fax (507) 507-0952/0954
Web http://www.mida.gob.pa
General Comptrollership
of the Republic of Panama
Contraloría General de la
República de Panamá
Apartado 0816-01521
Panamá, República de Panamá
Tel. (507) 510-4777
Tel (507) 510-4100
Web http://www.contraloria.gob.pa
General Customs Office
Dirección General de Aduanas
Apartado 0816-02886
Panamá, República de Panamá
Tel. (507) 506-6202
Fax (507) 506-6210
Web http://www.aduanas.gob.pa
City of Knowledge
Ciudad del Saber
Apartado 0816-03991
Panamá, República de Panamá
Tel. (507) 507-0111
Fax (507) 507-0118
Web http://www.cdspanama.org
Ministry of Health
Ministerio de Salud
Apartado 0816-06812
Panamá, República de Panamá
Tel. (507) 512-9100
Fax (507) 512-9229
Web http://www.minsa.gob.pa
Panamanian Industrial Guild
Sindicato de Industriales de Panamá
Apartado 0819-05411
Panamá, República de Panamá
Tel. (507) 230-0169
Fax (507) 230-0805
Web http://www.industriales.org
National Secretary of Science,
Technology and Innovation
Secretaría Nacional de Ciencia,
Tecnología e Innovación
Apartado 0816-02852
Panamá, República de Panamá
Tel. (507) 507-0000
Fax (507) 507-0007
Web http://www.senacyt.gob.pa
Ministry of Public Works
Ministerio de Obras Públicas
Apartado 0816-06734
Panamá, República de Panamá
Tel. (507) 507-9400
Fax (507) 507-9419
Web http://www.mop.gob.pa
National Bank of Panama
Banco Nacional de Panamá
Apartado 0816-05220
Panamá, República de Panamá
Tel. (507) 505-2000
Fax (507) 505-2150
Web http://www.banconal.com.pa
Ministry of Foreign Affairs
Ministerio de Relaciones Exteriores
Apartado Panamá 4, República de Panamá
Tel. (507) 511-4100/4200
Fax (507) 511-0416
Web http://www.mire.gob.pa
Superintendency of Insurance
& Reinsurance
Superintendencia de Seguros
y Reaseguros
Apartado 0832-1653
World Trade Center
Panamá, República de Panamá
Tel. (507) 560-0512
Fax (507) 560-0518
Web http://www.mici.gob.pa/sector_seguros/
Superintendency of Banks
Superintendencia de Bancos
Apartado 0832-2397
World Trade Center
Panamá, República de Panamá
Tel. (507) 506-7800/7900
Fax (507) 506-7700/7989
Web http://www.superbancos.gob.pa
National Migration
& Naturalization Office
Dirección Nacional de Migración
y Naturalización
Apartado 0830-00147
Panamá, República de Panamá
Tel. (507) 507-1826
Fax (507) 507-1830
Web http://www.panamatramita.gob.pa
Civil Aeronautical Office
Dirección de Aeronáutica Civil
Apartado 0816-03073
Panamá, República de Panamá
Tel. (507) 501-9000/9099
Fax (507) 501-9214
Web http://www.aeronautica.gob.pa
Administration of Colon Free Zone
Administración de la Zona Libre de Colón
Apartado 0302-00512
Colón, República de Panamá
Tel. (507) 475-9500/9524
Fax (507) 475-9592
Web http://www.zonalibredecolon.com.pa
National Environmental Authority
Autoridad Nacional del Ambiente (ANAM)
Apartado 0843-00793
Panamá, República de Panamá
Tel. (507) 500-0855
Fax (507) 500-0822
Web http://www.anam.gob.pa
Panamanian Tourism Bureau
Instituto Panameño de Turismo (IPAT)
Apartado 0816-00672
Panamá, República de Panamá
Tel. (507) 501-7000
Web http://www.ipat.gob.pa
Social Security Administration
Caja del Seguro Social
Apartado 0816-06608
Panamá, República de Panamá
Tel. (507) 503-0623/0627
Fax (507) 503-0621
Web http://www.css.org.pa
National Institute of Aqueducts and Sewers
Instituto de Acueductos y Alcantarillados
Nacionales (IDAAN)
Apartado 0816-01535
Panamá, República de Panamá
Tel. (507) 523-8640
Fax (507) 523-8502
Web http://www.idaan.gob.pa
Ministry of Government and Justice
Ministerio de Gobierno y Justicia
Apartado 0816-06715
Panamá, República de Panamá
Tel. (507) 512-2000
Fax (507) 512-2032
Web http://www.gobiernoyjusticia.gob.pa
Maritime Authority of Panama
Autoridad Marítima de Panamá
Apartado 0843-00533
Panamá, República de Panamá
Tel. (507) 501-5101/501-5183
Web http://www.amp.gob.pa
Panama Canal Authority
Autoridad del Canal de Panamá
P. O. Box 526725
Miami, Florida 33152-6725
Tel. (507) 272-1111
Web http://www.pancanal.com
Chamber of Commerce, Industry
and Agriculture of Panama
Cámara de Comercio, Industrias
y Agricultura de Panamá
Apartado 0816-07517
Panamá, República de Panamá
Tel. (507) 207-3400
Fax (507) 207-3422
Web http://www.panacamara.com/
National Security Council
Consejo Nacional de Seguridad
Apartado 0816-06764
Panamá, República de Panamá
Tel. (507) 514-0001/0000
Fax 514-0063
Panama-Pacific Special Economic
Area Agency
Agencia del Área Económica
Especial Panamá-Pacífico
Apartado 0843-05522
Panamá, República de Panamá
Tel. (507) 316-0000
Fax (507) 316-0003
Web http://www.aaeepp.gob.pa
MINISTRY OF COMMERCE AND INDUSTRY
Edison Plaza, Third Floor, Ricardo J. Alfaro Avenue & El Paical. P.O. Box 0815-01119 Paitilla, Panama.
Phones: (507) 560-0600 / 560-0700 Fax: (507) 560-0656
www.mici.gob.pa